In the UGC industry, we often hear of the five-figure deals. I don’t know about you, but I look around and it can feel like everyone is shouting about their $$$$ retainers, whilst the subject lines in my inbox are reading a little differently. Commission. Commission. Commission.
Today, we’re diving headfirst into the debate surrounding commission-only deals for UGC creators.
While the allure of potential earnings may seem enticing, we’ll unravel the hidden pitfalls and chat through why accepting commission-based arrangements might not be the best use of your time.
TABLE OF CONTENTS
WHAT IS COMMISSION ONLY?
PERKS OF COMMISSION ONLY
WHY WE SHOULDN’T BE ACCEPTING COMMISSION ONLY
WHEN TO GO FOR IT
What Is Commission Only?
Commission-only is a payment structure where creators receive compensation solely based on the sales or revenue generated by their content. In this arrangement, you won’t receive upfront payment or guaranteed fee for your work; instead, it’ll be a percentage or commission from the sales resulting from the content.
It can be alluring to some creators, especially those just starting, as it offers the potential for higher earnings if their content drives substantial sales. One viral piece of content, and your earnings are off to the moon.
Perks Of Commission Only
✅ Earning In Perpetuity
Keep that money train chugging! With commission-only gigs, your bank account can keep on growing long after you drop that killer content. Imagine getting paid again and again for your work. Cha-ching.
✅ Uncapped Possibility
Sky’s the limit, creators! Unlike fixed payments, commission-based setups let you earn without any limits holding you back. Create amazing content, crush conversions, and watch your earnings soar.
✅ Brand Experience
Embracing commission-only deals can offer UGC creators a chance to gain valuable brand experience and build strong partnerships. Collaborating with diverse brands on a performance-based model allows creators to immerse themselves in various industries, products, and marketing strategies. This exposure can enhance their portfolio and reputation, opening doors to more opportunities and collaborations in the future.
But, the reality doesn’t often line up. This model is often employed by brands and companies looking to minimize upfront costs and shift the financial risk onto the creators.
Commission-only arrangements come with their own inherent challenges and risks.
Why We Shouldn’t Be Accepting Commission Only
You can invest considerable time and effort into creating content that may not lead to significant sales — due to no fault of your own, leaving you without compensation for your work.
This is specifically relevant when we’re talking about paid media, meaning that the content is launched as an advertisement. If you do your part correctly, you can get the viewer to stop scrolling, watch your video long enough to click the link and go to the landing page. What they do from there is out of your hands.
Some factors out of your control that can leave you with a high CTR but low conversion rate include (but is not limited to):
❌ The website is buggy and hard to navigate
❌ They require the customer to manually put in their credit card info as opposed to Apple Pay or PayPal.
❌ The landing page isn’t congruent to your overall ad narrative/topic(s) discussed.
Additionally, calculating and tracking commissions can be complex and time-consuming, leading to uncertainty about the final earnings.
Before accepting commission-only deals, UGC creators must carefully assess the potential benefits and drawbacks. Evaluating the brand’s reputation, product demand, and the likelihood of successful conversions is crucial to making an informed decision.
Remember, fair compensation should always reflect the value and effort you bring to the table as a skilled content creator.
🚀 When To Accept Commission
With that being said, there are still occasions when commission based deals make sense.
You can have partial pay be performance based if you think it aligns with your business. This means asking for a base rate and commission for every new customer that converts from your content. If you’re confident in your ability to convert customers (and in the brands landing page) then this can be a way to tap into the lucrative potential of commission, while covering your time.
If it’s a high ticket product, accepting a gifted collaboration with commission can also make sense.
As creators, we invest time, energy, and talent into crafting compelling content, and it’s crucial to explore fair and rewarding compensation structures that align with the value we bring to brands and audiences alike. Ultimately, you know what works for you, and you’ll quickly learn what you feel comfortable with.