A compensation model where the revenue generated from a deal is shared between a business and a partner. In a revenue share model, the business gives a percentage of the revenue generated from a sale or transaction to the partner who facilitated the sale.

For example, if a $50,000 deal is closed, the business may keep 75 per cent and give the partner 25 per cent for a payout of $12,500.

Revenue share commissions can vary depending on the agreement however, ranging from a fixed percentage of the deal value to a tiered structure that increases with higher sales volumes. This structure incentivizes partners to drive high-value customers so that they earn a larger percentage of commission.

For businesses, it offers a financial safety net as they aren’t required to pay out partners unless they’ve succeeded in the agreed upon transaction.

A revenue share commission structure, while promoting collaboration, can introduce complexities like potential conflicts over earning distribution, intricate payout requirements and potentially diluted revenues for stakeholders.