What is a revenue share agency fee?

There are two common shapes. An industry publication for ecommerce brands describes a share of total revenue and a share of incremental revenue, and notes that a share often comes with a base fee¹.

• Share of total revenue. The agency is paid on all sales, including those that would have happened anyway.
• Share of incremental revenue. The agency is paid only on incrementality: sales above what would have happened without its work.
• Base plus share. A lower fixed fee, plus a share on top.

The word "revenue" does the heavy lifting. Revenue is not profit. A sale with thin margin can lift revenue and leave nothing in the bank. Check it against contribution margin: what is left per order after the costs that grow with every order.

Before anyone signs, four things need a written answer. The same industry publication lists the revenue source of truth and the baseline among the terms to settle¹.

1. Which revenue. Total or incremental.
2. From which system. The shop, the analytics tool or the ad platform. Their totals often differ.
3. From which baseline. The baseline is the level of sales expected without the work. Every uplift is measured against it.
4. Whether there is a cap. A cap limits what the share can reach.