What is a Revenue Share Partnership?
Understanding the partnership model that aligns incentives between product creators and growth partners.
A revenue share partnership is a business arrangement where one party (typically a marketer or promoter) earns a percentage of revenue generated from customers they help acquire. Unlike one-time affiliate commissions, revenue share continues for the lifetime of the customer relationship, creating aligned incentives between the product owner and the growth partner.
Key Characteristics
| Characteristic | Description |
|---|---|
| Performance-based | Payment tied to actual results, not promises |
| Ongoing | Revenue shared for customer lifetime, not one-time |
| Aligned incentives | Both parties succeed when customers stay and pay |
| Low risk | No upfront cost for the business owner |
Revenue Share vs Similar Models
| Model | Payment Type | Timeline | Risk Level |
|---|---|---|---|
| Revenue Share | % of ongoing revenue | Continuous | Low |
| Affiliate | One-time commission | Per sale | Low |
| Retainer | Fixed monthly fee | Monthly | High |
| Equity | Ownership stake | Long-term | Very High |
When Revenue Share Makes Sense
- - Your product has recurring revenue (subscriptions, SaaS, memberships)
- - Customer lifetime value exceeds acquisition cost significantly
- - You want partners invested in retention, not just acquisition
- - You prefer zero upfront marketing costs with shared upside
- - You can accurately track attribution to individual partners
- - Your margins support 10-30% revenue share while remaining profitable
How to Structure a Deal
Define Attribution Window
Set how long after a referral click/touch a conversion is credited. Common: 30-90 days for first purchase attribution.
Set Revenue Share Percentage
Typical range: 10-30% of attributed revenue. Higher margins = higher share possible. Consider tiered rates for volume.
Define Revenue Scope
Clarify what counts: subscription fees only? Upsells? Add-ons? Exclude refunds, chargebacks, and failed payments.
Establish Duration
Options: customer lifetime, 12-24 months, or first N payments. Lifetime aligns incentives best but requires trust.
Set Payment Terms
Monthly or quarterly payouts. Include minimum threshold (e.g., $100) and payment method. Net-30 is standard.
Implement Tracking
Use unique referral links, UTM parameters, or promo codes. Ensure transparent reporting dashboard for partners.
Frequently Asked Questions
What is a typical revenue share percentage?
Typical revenue share percentages range from 10% to 30% of attributed revenue. The exact percentage depends on factors like the product's profit margins, the partner's contribution level, and industry norms. SaaS products often offer 20-30%, while lower-margin products may offer 10-15%.
How is revenue share different from affiliate marketing?
Revenue share provides ongoing payments tied to customer lifetime value, while affiliate marketing typically offers one-time commissions per sale. Revenue share aligns long-term incentives between parties, whereas affiliate focuses on transaction volume.
When should I use a revenue share model?
Revenue share works best for subscription-based products, SaaS businesses, or any model with recurring revenue. It's ideal when you want partners invested in customer retention, not just acquisition. Avoid it for one-time purchase products where affiliate makes more sense.
How do I track revenue share accurately?
Use unique referral links with UTM parameters, dedicated promo codes, or first-party cookies. Integrate tracking with your payment processor to automatically calculate attributed revenue. Provide partners with real-time dashboards showing their referred customers and earnings.
Ready to find revenue share partners?
Prexvo connects developers with growth partners for performance-based partnerships.
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