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Commission Structures for Shopify Apps
Revenue share, fixed per-install, first-year vs lifetime, tiers — how to pick a structure that motivates partners without wrecking your margins.
Program Design · ~6 min read
Your commission structure decides who promotes you and whether the channel is profitable. There's no universally correct answer, but there is a right answer for your margins and your partner type.
The core models
- •Revenue share — a percentage of what the referred merchant pays you (e.g. 20–40%). Aligns partner and app: they earn more when they bring better merchants who stay longer.
- •Fixed per-install — a flat amount per qualified install (e.g. $50). Simple, predictable, and good when your plans are cheap or usage-based, but it doesn't reward partners for merchant quality.
- •Fixed first-month / first-year — pay on early revenue only. Caps your cost and still motivates the referral.
- •Hybrid — a small fixed bonus on install plus a smaller recurring share. Rewards both the referral and retention.
First-year vs lifetime
Lifetime revenue share is the most attractive to partners and the most expensive to you. First-year (or a fixed number of months) caps your exposure while still being generous. A common middle ground: revenue share for 12 months. Decide based on your gross margin and churn — if merchants stay for years, lifetime can quietly become your largest cost line.
Gross vs net revenue
Be explicit about whether the percentage is on gross (what the merchant pays) or net (after Shopify's cut and refunds). For most apps under Shopify's revenue thresholds the difference is small, but partners read the terms — say which one you mean and stick to it.
Tiers
As the program grows, tiers let you pay your best partners more without raising everyone's rate. A standard tier at 20%, a premium tier at 30% for partners past a threshold, and custom terms for a few strategic agencies. Tiers reward performance and give partners something to climb toward.
How to pick
Start simple: one revenue-share rate you can afford, applied program-wide. Add per-partner custom terms for the handful of agencies worth negotiating with. Introduce tiers only once you have enough partners for a tier to mean something. Don't design a five-tier system for a program with four partners.
Practical checklist
- ✓Chosen a base model (revenue share is the most common starting point)
- ✓Decided duration: lifetime, first-year, or a fixed number of months
- ✓Stated gross vs net explicitly in your terms
- ✓Confirmed the rate is survivable against your gross margin and churn
- ✓A plan to add custom terms or tiers for standout partners later
Common mistakes
- ✕Offering lifetime revenue share without modelling it against churn
- ✕Leaving gross vs net ambiguous in your terms
- ✕Building elaborate tiers before you have partners to fill them
How this works in PartnerDock
In PartnerDock you set one program-wide commission (revenue share, fixed per-install, first-month, or recurring-for-N-months), then override terms for individual partners when you negotiate a special rate. Commissions compute on the real revenue the Partner API reports, so payouts always match what the merchant actually paid.
Try PartnerDock FreeFAQ
What's a normal revenue-share rate for a Shopify app?+
Most programs land between 20% and 40%. Higher rates recruit faster but need healthy margins and retention to sustain. Pick a number you'd be happy paying forever on your best merchants.
Should I pay on trials?+
No — pay on real charges. Show partners projected value during a trial if you like, but only pay commission once the merchant is actually billed.
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Payout Models
Recurring, one-time, hybrid, and bonus payouts — choosing how and when you pay partners.
The Shopify App Partnership Framework
A simple end-to-end model: recruit, onboard, attribute, reward, retain. The backbone of everything else in this handbook.
Why Most Shopify App Partner Programs Fail
The real reasons app partner programs stall — and the few things that separate the ones that work.