Glossary

Affiliate marketing, defined

40 terms you will meet running or joining an affiliate program, explained plainly. Where a topic needs more than a paragraph, the definition links to a full guide.

Affiliate

A person or company that promotes another business’s product and earns a commission on the sales or sign-ups they bring in. Affiliates are independent: they are not employees, and they are usually paid only for results. In SaaS programs they are often bloggers, agencies, consultants or existing customers.

Affiliate link

A URL unique to one affiliate, usually the merchant’s site with a tracking parameter or a short redirect path. When a visitor clicks it, the tracking system records the click and remembers which affiliate sent them, typically with a cookie. Any sale that visitor makes inside the attribution window is credited to that affiliate.

See also: Cookie, Attribution window, Sub-ID

Affiliate network

A marketplace that sits between many merchants and many affiliates, handling tracking, discovery and payments for all of them. Networks help merchants reach publishers they would not find alone, but they usually charge a fee on top of commissions. A merchant running its own in-house program deals with its affiliates directly instead.

Attribution window

The length of time after a click during which a purchase still counts toward the affiliate who sent it, often 30, 60 or 90 days. It is usually enforced by the lifetime of the tracking cookie. A longer window credits affiliates for slower buying decisions, which matters for B2B software with long trials. See the attribution and cookie duration guide.

Bounty

A fixed, one-time payment for a specific action, such as a new paying customer or a completed trial sign-up, instead of a percentage of revenue. Bounties are simple to explain and budget for. They do not grow with the customer’s value, so programs often pair them with a revenue share for larger plans.

Brand bidding

Buying paid search ads on a merchant’s own brand name, such as their company or product name, and pointing them at an affiliate link. It lets an affiliate collect commission on customers who were already searching for the merchant. Most programs prohibit it or restrict it in their program terms.

Chargeback

A reversal of a card payment that the customer’s bank forces after the customer disputes the charge. The merchant loses the payment and usually pays a dispute fee, so programs reverse the matching commission as well. Stripe calls these disputes.

Churn

Customers who cancel a subscription, or the revenue lost when they do, usually measured per month. Under a recurring commission, an affiliate’s earnings from a customer stop when that customer churns. High early churn from one affiliate’s referrals can be a sign of low-quality or incentivised sign-ups.

Clawback

Taking back a commission after it was earned because the sale behind it was refunded, charged back or found to be fraudulent. If the commission has not been paid yet, it is simply voided; if it has, the amount is usually deducted from the affiliate’s next payout. The refunds and clawbacks guide covers how to set this up fairly.

Click-through rate (CTR)

The share of people who saw a link or ad and clicked it: clicks divided by impressions. Affiliates use it to judge which placements and wording get attention. A high CTR with few conversions usually points to a mismatch between the promotion and the product.

Commission

The amount a merchant pays an affiliate for a referred sale or action, set as a percentage of revenue, a fixed amount, or both. It can be paid once or on every renewal. Typical SaaS rates and how to choose one are in the commission rates guide.

Commission hold period

A waiting period after a sale before its commission becomes payable, often matched to the refund window. While a commission is held, a refund or chargeback can void it without any money changing hands. Holds are the main defence against paying for sales that are later reversed; see refunds and clawbacks.

Conversion

The action a program pays for, such as a purchase, a paid subscription or a sign-up, completed by a referred visitor. Conversion rate is conversions divided by clicks. Programs should define exactly which event counts, since a free trial start and a first paid invoice are very different outcomes.

Coupon code attribution

Crediting a sale to an affiliate because the customer used a discount code assigned to that affiliate, with or without a tracked click. It works where links do not, such as podcasts, videos and word of mouth. The risk is code leakage: codes posted on coupon sites can earn commission on sales the affiliate did not drive.

CPA (cost per acquisition)

What a merchant pays, on average, to gain one new customer through a channel, or a payment model where the affiliate earns a fixed amount per acquired customer. In an affiliate program, CPA is the total commission paid divided by the customers it produced. Comparing it with customer lifetime value shows whether the program is profitable.

EPC (earnings per click)

The average commission an affiliate earns for each click they send: total commission divided by total clicks, often quoted per 100 clicks. Affiliates use it to compare programs that pay differently. It combines the merchant’s conversion rate and commission size into one number. The commission calculator shows how rate and price affect earnings.

First-click attribution

A rule that credits a sale to the first affiliate who referred the customer, even if another affiliate’s link was clicked later. It rewards affiliates who introduce a product, such as review sites and educational content. Programs using it typically ignore new referral cookies once one is set; see the attribution guide.

Last-click attribution

A rule that credits a sale to the affiliate whose link the customer clicked most recently before buying. It is the most common default in affiliate software. It favours affiliates close to the purchase, such as coupon and comparison sites, over those who introduced the product.

Lifetime commission

A recurring commission with no end date: the affiliate earns on every payment the referred customer makes for as long as they stay subscribed. It gives affiliates a strong reason to refer customers who will stick around. Merchants often cap it at a fixed number of months instead, to keep the long-term cost predictable.

LTV (customer lifetime value)

The total revenue, or gross profit, a business expects from one customer over the whole relationship. A simple estimate for subscriptions is average monthly revenue per customer divided by the monthly churn rate. LTV sets the ceiling on what a program can afford to pay per referred customer.

Merchant

The business that runs an affiliate program and pays commissions, also called the advertiser, brand or vendor. The merchant sets the commission terms, approves affiliates and decides which sales count. In Affiliatops, the merchant is the SaaS company connecting its Stripe account.

Minimum payout threshold

The smallest balance an affiliate must reach before a payout is sent; smaller balances roll over to the next payout run. It keeps transfer fees from eating into small payments. The threshold should be stated in the program terms; see how to pay affiliates.

MRR (monthly recurring revenue)

The predictable subscription revenue a business collects each month, with annual plans counted at one twelfth of their price. Affiliate programs often report referred MRR to show how much ongoing revenue partners have brought in. One-off charges and usage fees are usually left out.

Net-30

A payment term meaning money is due 30 days after a set point, such as the end of the month or the date a commission was approved. In affiliate programs it usually describes when commissions are paid, and it doubles as a window for refunds to surface. Net-45 and net-60 work the same way with longer delays.

Partner portal

The dashboard where affiliates sign in to get their links, see clicks, referrals and commissions, and manage payout details. A clear portal cuts down on support email, because affiliates can check their own numbers. Some portals carry the merchant’s branding rather than the software vendor’s.

Payout

A payment from the merchant to an affiliate covering their approved commissions for a period. Payouts are usually batched monthly and sent by PayPal, bank transfer or a payment platform. The guide to paying affiliates compares the options.

Promotion code

The customer-facing discount code a shopper types at checkout, such as SPRING20. In Stripe, a promotion code is a shareable code that applies an underlying coupon, and one coupon can have many codes. Giving each affiliate their own promotion code lets sales be attributed by code as well as by link.

Recurring commission

A commission paid on every renewal of a referred customer’s subscription, not just the first payment. It may run for a fixed number of months or for the customer’s lifetime. It is the standard model for SaaS programs; see recurring affiliate commissions.

Referral code

A short identifier tied to one affiliate or customer, used in a referral link or entered by hand at sign-up. It lets a program credit referrals where clicking a link is impractical. Unlike a promotion code, a referral code does not have to give the customer a discount.

Referral program

A program that rewards existing customers for bringing in new ones, often with account credit or a discount for both sides. Affiliate programs are aimed at outside promoters paid in cash, while referral programs are aimed at users, though many businesses run both in one system. See how to start a SaaS affiliate program.

Self-referral

An affiliate buying through their own link to collect commission on their own purchase, effectively giving themselves a discount. Most programs forbid it, and tracking tools flag it by matching the customer’s email, payment details or IP address to the affiliate. It is covered in affiliate fraud prevention.

Server-side tracking

Recording referrals and conversions from the merchant’s backend or payment provider rather than only from scripts in the visitor’s browser. It is not affected by ad blockers or cleared cookies once the referral is tied to a customer, and it sees renewals and refunds that happen without the customer visiting the site. Stripe affiliate tracking explains the setup.

Sub-ID

An extra tag an affiliate adds to their link to label where a click came from, such as a particular article, email or ad campaign. The tag is passed through to reports, so the affiliate can see which placements convert. It does not change who gets credit for the sale.

Tiered commission

A structure where the commission rate rises once an affiliate passes set volume levels, for example more referred customers in a month or more total revenue. It rewards the partners who drive the most sales without raising costs for everyone. The tiers and the period they reset over should be written into the program terms.

Two-tier affiliate program

A program where affiliates also earn a smaller commission on sales made by other affiliates they recruited. Programs with more than two levels are called multi-level. They can grow a partner base quickly, but they need close watching, because rewards for recruitment can outweigh rewards for real sales.

W-8BEN and W-9

US tax forms that payers commonly collect before paying affiliates. A W-9 gives a US person’s taxpayer identification number, which a US business may need in order to report payments to the IRS. A W-8BEN is completed by a non-US individual to certify foreign status, and entities use the W-8BEN-E instead. Which forms apply depends on your situation, so check with a tax adviser; this is not tax advice. See how to pay affiliates.

Webhook

An HTTP request one system sends to another when something happens, such as Stripe notifying an app that an invoice was paid or a charge was refunded. Affiliate software listens to these events to create commissions and reverse them automatically. Webhooks are what make server-side tracking work without polling.