Thoughts on branding, design, writing and life by Kevin Potts. Established 2003.

Commission-Based Payment for Web Design

I an effort to smooth out the monthly income stream, I have forgone the traditional lump payment in favor of a long-term, commission-based income based on ad performance.

Lately I have been reevaluating the “me create, you pay” arrangement. Perhaps by accident, perhaps by subconscious intention, I am trying to gently alter the course of my design business.

As any freelancer will attest, too often it’s feast or famine. Checks seem to come in waves, with uncomfortable dry spells between. We work hard every day but only get paid when the client’s accounts payable department gets around to it. I’m not complaining—it’s the nature of any business in any industry.

As an experiment to help smooth out the income stream, I’ve taken on a project where payment has bucked the following traditional structure:

  • Initial payment, before work is done (25%)
  • Landmark point (25%)
  • Delivery of final files (50%)

Instead, I’m working straight commission, forgoing the “paycheck” in favor of performance-based income from advertising sales. The site in question has a mixture of Adsense and affiliate links that make some money now, but I have enough faith in my SEO and Adsense optimization skills that I believe I can boost the income of the site by 200% or more. The client has enough faith in me that he is willing to take a short-term cut from his advertisement income in order to achieve a higher rate of return down the road.

It’s easy to focus on the legitimate risks of this arrangement. If I can’t boost the performance of the ads, or if the SEO techniques don’t return an increase in organic traffic, or if the advertiser’s rates drop, or if the internet explodes, I am screwed.

However, those are risks I am willing to take. For the next twelve months, I will get paid. Not a once or twice deal, but a monthly check. Smoothing out the income stream, remember? And the amount I get paid (and whether the contract gets renewed) hinges on how hard I work. The deal is potentially lucrative for both parties—it’s far more than I would make through a normal contract.

This is a new venture for me, so I can’t recommend it to any other freelancer. Obviously, the arrangement wouldn’t work on all sites—the best situation would be a client with a great idea but little startup capital who is willing to share profits. I imagine some (if not most) clients will simply not be interested—they just want to pay you once and that’s it. And I would imagine there are an equal number of uninterested designers who just want the lump sum up front.

The arrangement is actually more of a symbiotic partnership than a traditional client-designer relationship. The client trusts you to convert ad space into cash, and you trust the client to keep the site updated with new content that will bring in traffic.

I will report back on how it is going around the six month mark. (Obviously I’m under NDA to not reveal the client or the details of the contract, but I will tell you what I can.) Has anyone else worked out a deal like this?

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commentary + criticism


wrote the following on Thursday April 13, 2006

I worked on a project for a small startup that was looking to give me a percent of their profits instead of paying for the work I was doing. They thought their business was a sure bet and had grand plans of world domination.

In the end I opted for payment as usual instead of promises of cash rolling in later becuase I wasn’t comfortable that would actually happen. That turned out to be a good choice because the business is still not as much a smashing success and they had hoped.

Of course, my situation was different. I didn’t have the confidence in my client that you do. In the end, I think that’s the key in building a partnership like this.

Mohodin Rageh

wrote the following on Friday April 14, 2006

I am starting a similar project. The client is basically broke and is desperate to get online extention of his business. I am willing to take the risk of pinning my hopes on income yet to come from that project.

The project is certain to make money with clever SEO and other marketing ploy. What tempting more than anything is that my take would be quite hefty. If and only if things get lucrative. Hopefully they will. So I understand what you are talking about. One needs to evaluate the potential of the project involved before they take the jump. It is not therefore for all projects.

One good question is how would you know if the project is generating money? This question arises if the developer hands over the project to the client and wish it will be profitable. Goodwill comes into play. But I am not taking that chance. And YOU should not my friend.


wrote the following on Saturday April 15, 2006

I actually have access to the client’s Adsense and affiliate accounts. This not only gives me access to ad code for HTML placement, but to see how the ads are performing and to make adjustments as necessary. Again, it’s more of a partnership than a traditional client-designer relationship.

Mayhem Studios

wrote the following on Sunday April 16, 2006

Wouldn’t this be considered Spec Work?

Mohodin Rageh

wrote the following on Sunday April 16, 2006

Exactly kevin. The developer has to be the boss in a way, doing things his own way to make sure that the project is generating money as was intended initially and , more importantly, the developer is not left behind financial-wise as this is a partnership.


wrote the following on Monday April 17, 2006

I would not consider this spec work. I have a signed contract stipulating the nuances of the agreement as well as payment terms. Spec work is doing free work in the hopes of securing a contract, which is something I am very opposed to.

Daniel Schutzsmith

wrote the following on Tuesday April 25, 2006

Kevin, I think this model is terrific. I can’t remember where I read it, but recently I saw an article discussing many of the more daring ad agencies (R/GA, CP+B, etc.) following a similar model that is based on the performance of an ad campaign. From what I remember, their model was focusing more on the overall sales of a product rather than ancillary revenues such as what you are following. If I were you, I’d also look in to tapping your client’s sales rewards as well.

George Morris

wrote the following on Thursday April 19, 2007

I just wrote a post about our experiences with commission based payments.
Pay-For-Performance Based Web Design & Marketing


wrote the following on Monday February 4, 2008

How’s this working out for you? I recently missed the opportunity to multiply my salary 6X if I had been working free-lance for my employer, instead of under salaried contract. Someone tried to undercut my position by offering a commissioned build and my boss went for it at 30% commission. As such, I would have rather taken a similar deal at 30% commission, so I was just wondering how this scheme has done.


wrote the following on Tuesday November 18, 2008

I’m not a developer but we have been in business for 9 years. We did the same scheme for a developer from Belgium.
What we did is a good financial forecast but also we have included the % commission payment base on factual numbers. We did start very conservative to keep the cash flow “alive “and to increase the success of the project. What I strongly suggest is not to get involve with a complete start up with virtually no income. It’s not your business and it created a real danger zone.If the “client “do have revenue from another business or other web business, you may include a minimum among on easy payment to secure your revenues.
I’m French and did my study in the art academy; today I’m a marketing analyst. Think at your girl friend or your boy friend!! You need to bring that money base on your work. If you decide to take a risk make sure that you have the money for your rent, vacation and presents for your love one in Xmas. Self confidence instead of insecurity (common for creative people) should not take place and perhaps you should all together revise your business plan and strategy. Not a day by day “will see!!”But a secure careful road to success. Success do not mean a big car or a big house, in the contrary, your bills pay on time, food at the table, and security for yourself and your love one. Do not act lie a student, you have a business so act upon it.
If you are good at what you do, customers will been doing business with your company.

Regards from Amsterdam


wrote the following on Wednesday January 9, 2013

I need your help in designing a professional website, in which people could subscribe to open information that would help them lose weight and gain access to my blog. I have done so, but it is not as professional as I would like. You could ad as many related ads as you would like, as long as it did not appear cluttered. I have a friend who is involved heavily in Internet marketing who will help drive customers to the sight. He is one of the masterminds behind the empower network, which I will use to bring customers to the sight as well.