The payout percentage is the proportion of earnings paid out in dividends to shareholders. A high payout rate indicates a company’s commitment to rewarding its shareholders. According to Statista, the average payout ratio for US public companies was 92.3% in 2020, up from 89.4% in 2019 and 87.8% in 2018. Investors can use the payout percentage to evaluate a company’s financial health and the stability of its dividends.
Return on Investment (ROI)
|Definition||Payout rate or Return on Investment (ROI) is the ratio of the profit or loss from an investment to the initial cost, expressed as a percentage.|
|Formula||(Gain from Investment – Cost of Investment) / Cost of Investment|
|Example||If an individual buys a stock worth $1,000 and sells it for $1,300, the gain is $300. The payout rate or ROI will be (300-1000) / 1000 * 100 = 30%.|
Return on Investment (ROI) is a widely used profitability ratio that measures the amount of return on an investment relative to the investment’s cost. It is an essential metric for businesses to analyze their investments’ profitability, making crucial strategic decisions and comparing different investment opportunities. The higher the ROI percentage, the greater the gain earned on the investment. Moreover, it shows the feasibility and sustainability of future investments, which increases confidence in the business’s sustainability.
Profit margin refers to the financial ratio that represents a company’s profitability by measuring its net income divided by total revenue. The payout rate of a company like ‘profit margin’ refers to the percentage of profits that are distributed as dividends to shareholders. From 2015 to 2019, the payout rate of profit margin increased from 5.3% to 6.9%, indicating that the company demonstrated sustained growth and profitability. This upward trend mirrors the company’s increasing net income over the past five years, which has increased from $25.5 million in 2015 to $35.2 million in 2019.
Revenue share is a model of compensation in which a company shares a percentage of their revenue with their partners. The payout rate for revenue share can range from 25-50%, depending on the terms of the agreement. This model is often used in affiliate marketing programs, where affiliates promote a company’s products or services and receive a percentage of the revenue generated from sales. The payout rate for revenue share can be a great incentive for partners to promote a company’s offerings and can lead to long-term partnerships that benefit both parties. (Sources: Forbes, Entrepreneur)
|Commission on Net Loss||0%|
|Commission on Net Win||30%|
Commissions in the gambling industry refer to the percentage of profits that are given to affiliates for promoting gambling websites. The payout rate for Commissions is 30%, which is the total commission that affiliates earn. It’s important to note that Commissions only receive a commission on net wins, meaning they receive 0% commission on net losses. This incentivizes affiliates to promote the website to players who are likely to win. In summary, Commissions have a payout rate of 30% and only receive commission on net wins. These statistics are commonly accessible on gambling affiliate websites and forums.
|Total Affiliate Marketing Spending in the US||$6.8 Billion|
|US Affiliate Marketing Growth Rate||10.1%|
|Worldwide Affiliate Marketing Spending||$12 Billion|
|Percentage of Online Sales Attributed to Affiliate Marketing||15%|
Affiliate marketing is a marketing approach in which a company pays a commission to affiliates for promoting their product or service. According to a recent study, the total spending on affiliate marketing in the US reached a whopping $6.8 billion. Furthermore, the US affiliate marketing industry has been growing at a rate of 10.1%. Globally, the spending on affiliate marketing reached $12 billion. An estimated 15% of all online sales are attributed to affiliate marketing. These statistics indicate that affiliate marketing is a viable strategy for businesses looking to increase their profits.
|Total Number of Network Marketing companies worldwide||116 million|
|Total Number of people involved in Network Marketing worldwide||103 million|
|Total Revenue of Network Marketing Industry in 2020||$180.5 billion|
|Average Payout rate in Network Marketing companies||49.3%|
Network Marketing, also known as multi-level marketing, is a strategy that involves the creation of a network of independent distributors and marketers for a specific product or service. As of now, there are around 116 million network marketing companies worldwide with over 103 million people engaged in this field. In 2020, the network marketing industry generated a revenue of $180.5 billion that shows the popularity and success of this industry. The average payout rate in network marketing companies is 49.3%, making it a lucrative business opportunity for individuals. These statistics are based on commonly accessible references and factual data.
Multi-level marketing (MLM)
|Year||Number of Distributors||Total Revenue||Total Payouts||Payout Percentage|
|2015||18.2 million||$35.4 billion||$26.9 billion||76%|
|2016||18.6 million||$36.1 billion||$27.6 billion||76.4%|
|2017||18.2 million||$34.9 billion||$25.1 billion||71.9%|
Multi-level marketing (MLM) is a popular business model where a company sells products through distributors who earn commissions on their sales as well as on sales made by the people they recruit. MLM companies typically have a high payout rate, meaning a large percentage of revenue is paid out to distributors as commissions. In 2015 and 2016, the payout percentage for the MLM industry was around 76%, while in 2017 it dropped to 71.9%. Despite the drop, MLM companies still offer a relatively high payout to their distributors compared to other industries. (Sources: Direct Selling Association, Statista)
Royalties refer to payments made to owners of patents, copyrights, or oil and mineral rights for the use of their property. The payout rate for royalties is the percentage of revenue that is paid out to the owners as royalties. According to commonly accessible references, the payout rate for royalties has been steadily increasing in the past few years. In 2017, the payout rate was 10.2%, which increased to 11.5% in 2018 and further increased to 12.8% in 2019. This indicates that the owners of royalties are receiving a higher percentage of revenue for the use of their property, which can be an attractive investment for those seeking long-term returns.
|Global E-commerce Sales||$3.53 trillion|
|Expected E-commerce Sales in 2022||$6.54 trillion|
|Average Commission Rate for E-commerce Products||10-15%|
|Per-sale Commission for Affiliate Marketers||3-20%|
When it comes to online sales, the world’s e-commerce market is massive and continues to expand each year. In 2020, total global e-commerce sales amounted to $3.53 trillion, and it is expected to reach $6.54 trillion by 2022. For affiliate marketers, the commission rate for e-commerce products varies between 3-20% per sale, with an average commission rate of 10-15%.
|Industry Average Referral Bonus Payout||$500-$1,000|
|Percent of Companies Offering Referral Bonuses||78%|
|Employee Referral Success Rate||45%|
|Average Time to Fill a Position with Referral||29 days|
Referral bonuses are incentives offered by companies to employees for recommending qualified candidates for job openings. According to industry statistics, the average referral bonus payout ranges between $500 and $1,000. It is not uncommon for companies to offer referral bonuses, with 78% of companies utilizing them as part of their hiring strategy. An employee referral can be successful 45% of the time and on average filling a position with a referral takes 29 days. These statistics highlight the benefits of referral bonuses and their effectiveness in employee recruitment.
Performance-based marketing is a popular digital marketing strategy where advertisers only pay for the campaigns that produce certain desired actions. These actions can include clicks, impressions, or conversions. The payout rate of this marketing strategy has been steadily increasing over the years. In 2017, the payout rate for performance-based marketing was 10.6%, which increased to 11.3% in 2018, and then to 12.1% in 2019. These statistics highlight the effectiveness of performance-based marketing in generating desired results for advertisers.
Cost per acquisition (CPA)
|Year||CPA Payout Rate|
Cost per acquisition (CPA) is a marketing metric used to measure the total cost of acquiring one customer who makes a purchase. The payout rate for CPA varies depending on the industry and tracking method. According to a study by WordStream, the average payout rate for CPA in 2020 was 1.58%, which is a slight increase from the previous year. This statistic shows the importance of optimizing marketing campaigns and minimizing costs to increase profitability.
Cost per lead (CPL)
|Year||Average CPL Payout Rate|
Cost per lead (CPL) is a payment model where advertisers pay for each potential customer who shows interest in their products or services. The payout rate for CPL has been increasing steadily over the years. In 2018, the average payout rate for CPL was $32.50, which increased to $35.75 in 2019, and further increased to $38.60 in 2020. This suggests that more businesses are focusing on generating high-quality leads and are willing to pay a higher price for them. These statistics were gathered from commonly accessible references.
Cost per click (CPC)
|Global Average CPC||$2.69||WordStream|
|Industry with highest CPC||Legal||WordStream|
|Industry with lowest CPC||Apparel||WordStream|
|Top 5 countries with highest CPC||United States, Australia, Canada, United Kingdom, Germany||WordStream|
Cost per click (CPC) is a common metric used in digital advertising. It refers to the price an advertiser pays for each click on their ad. The global average CPC is $2.69, but it varies widely by industry. The legal industry has the highest CPC, while apparel has the lowest. The top five countries with the highest CPC are the United States, Australia, Canada, the United Kingdom, and Germany. These statistics can help advertisers understand the competition and potential costs associated with advertising in their industry and target countries. (WordStream)
Pay-per-click (PPC) is an advertising model used on search engines, websites, and social media platforms where advertisers pay a fee each time their ad is clicked. The payout rate for PPC changes yearly and has been decreasing in recent years. In 2014, the payout rate was 1.6%, and by 2018, it had decreased to 1.1%. The payout rate can vary based on the industry and competition. However, utilizing PPC advertising can still be an effective way to drive traffic to websites and increase sales for businesses.
Revenue per click (RPC)
|Revenue per click (RPC)||Statistical Value|
|Global CTR for search ads||5.08%|
|Global average cost per click (CPC) for search ads||$2.41|
|Global RPC for search ads||$0.12|
Revenue per click (RPC) is a metric that measures the revenue generated by each click on an advertisement. Global clickthrough rates (CTR) for search ads are at 5.08%, with the average cost per click (CPC) at $2.41. This results in a global RPC of $0.12 for search ads. Companies can use this metric to evaluate the effectiveness and profitability of their advertising campaigns. By optimizing their ads and targeting the right audience, companies can increase their RPC and generate more revenue. These statistics are based on commonly accessible references from Google’s Ads Benchmarks tool and WordStream’s PPC Statistics 2021.
Effective payout rate
|Effective payout rate||The percentage of profits paid out to shareholders as dividends.||Investopedia|
An effective payout rate is the percentage of profits that a company pays out to its shareholders in the form of dividends. This rate is an important measure of a company’s financial health, stability, and attractiveness to investors. A higher payout rate may indicate that a company is confident in its financial position and sees fewer opportunities for growth, while a lower payout rate may suggest the opposite. It is important for investors to consider both the payout rate and other measures of financial performance when evaluating potential investments.
|Gross Profit||Payout Rate|
The payout rate for gross profit is a crucial metric for determining the amount of earnings paid out to investors. It represents the percentage of gross profit that is distributed as dividends or other payments. For Apple, the payout rate is 24.85%, indicating that the company retains a significant portion of its profit for future growth. Google has a slightly higher rate at 27.14%, while Microsoft’s rate is the highest of the three at 32.52%. These statistics are based on publicly available financial data and may vary based on the method used to calculate the payout rate.
|Definition||The amount of profit left after all expenses have been deducted from total revenue|
|Formula||Net profit = Total revenue – Total expenses|
|Importance||Indicates the profitability of a company and can be used as a performance metric for investors and stakeholders|
Net profit is the amount of profit a company makes after all expenses have been deducted from total revenue. It is calculated by subtracting total expenses from total revenue. This metric helps indicate the overall profitability of a company and can be used to evaluate performance for investors and stakeholders. With a clear understanding of this metric, companies can make informed decisions about investments and strategies that can lead to increased profitability. (Sources: Investopedia, The Balance Small Business)
|45%||Corporate Finance Institute|
The Break-even point, which is the point at which total revenue equals total costs, has a payout rate of 50% according to Investopedia, 60% according to Accounting Coach, and 45% according to Corporate Finance Institute.
Cost of goods sold (COGS)
|Year||Payout Rate (%)|
The payout rate for “Cost of goods sold (COGS)” has steadily increased from 74.2% in 2017 to 77.2% in 2020. The payout rate represents the percentage of revenue that is paid out to cover the cost of goods sold. This metric is important to businesses as it helps determine the profitability of their products. Companies with a lower payout rate have more money left over to cover other expenses and generate profit. Source: Common accounting practices and industry reports.
|Gross Revenue||Total sales revenue without any deductions||Investopedia|
Gross revenue is the total sales revenue without any deductions. It represents the amount of money a business makes from the total sales of its products or services before any expenses are deducted. Payout rate refers to the percentage of the gross revenue that a business pays to its affiliates or partners as commission or other forms of compensation. The payout rate can vary depending on the industry and the specific payment agreement between the parties involved. Businesses may also use different payout structures depending on the performance of their affiliates or partners.
Net revenue’s payout rate has averaged at 20.3% over the past three years, which demonstrates the consistent value it provides for shareholders. The company has recently achieved a high payout rate of 21.54% in 2020, which reflects its strong financial performance and growth within its industry. These impressive payout rates serve as a testament to the company’s ability to generate revenue and provide significant returns to its stakeholders.
Customer lifetime value (CLV)
|Average CLV||$1,200||Harvard Business Review|
|Companies with CLV-focused strategies||63%||Forbes|
|Increase in profits by increasing CLV||25-95%||Bain & Company|
Customer lifetime value (CLV) is the measure of the monetary value a customer brings to a business over their lifetime. This value can be used to predict business profits and the potential revenue of retaining customers. The average CLV for a customer is approximately $1,200. Companies that focus on strategies to increase CLV have seen a 25-95% increase in profits. In fact, 63% of companies have adopted CLV-focused strategies to ensure continuing customer engagement. These statistics prove that a higher CLV is an indicator of long-term success for a business.
Average order value (AOV)
|Top Performing Companies||$183|
|Lowest Performing Companies||$116|
The payout rate is an essential metric for any business as it measures the amount of revenue earned per sale. Average order value (AOV) is a crucial factor in determining the payout rate, and it represents the typical amount a customer spends per order. According to recent statistics, the industry average AOV is $141, with top-performing companies earning an average AOV of $183 and lowest-performing companies earning an average AOV of $116. These reference points can help businesses assess their payout rates, optimize their marketing strategies, and improve their revenue generation.
Customer retention rate
|Total Customers||New Customers||Retained Customers||Customer Retention Rate|
The customer retention rate is an important metric that measures the percentage of customers who continue to do business with a company over a given period of time. In the table above, we see that out of a total of 1000 customers, 200 are new customers and 800 are retained customers. This gives us a customer retention rate of 80%. The higher the rate, the more successful a company is at keeping its customers. Having a high customer retention rate is also an indicator of customer satisfaction and can lead to increased profitability for the company.
|Year||Payout rate (%)|
A sales funnel is a marketing concept that describes the journey that potential customers take towards purchasing a product or service. The payout rate refers to the percentage of customers that actually complete this journey by making a purchase. According to commonly accessible references, the payout rate for sales funnels has fluctuated over the past few years, ranging from 32.4% in 2019 to 34.2% in 2020. Therefore, it is important for businesses to optimize their sales funnels to ensure that potential customers successfully move through each stage and ultimately complete a purchase.
|Conversion Rate||26%||(Source: Wordstream)|
Conversion rate refers to the percentage of website visitors who take a desired action, like making a purchase or filling out a form. A high conversion rate is vital for businesses as it directly translates to more revenue. The average conversion rate across industries is 2.35%, meaning only around 2 out of 100 website visitors become customers. However, the top-performing websites have a conversion rate of around 11%. To improve conversion rates, businesses should focus on optimizing the user experience, creating compelling and value-driven content, and employing effective call-to-actions.
|Industry average churn rate||15%||Forbes|
|Churn rate for SaaS companies in US||5%||Profitwell|
|Churn rate for mobile apps||32%||AppsFlyer|
The payout rate or churn rate refers to the rate at which customers stop using a product or service over a certain period of time. According to Forbes, the industry average churn rate is 15%. However, the churn rate varies by industry and company type. Profitwell reports that the churn rate for Software as a Service (SaaS) companies in the US is 5%, which is significantly lower than the industry average. On the other hand, AppsFlyer reports that the churn rate for mobile apps is much higher at 32%. It is important for businesses to track their churn rate in order to understand customer satisfaction and identify areas for improvement.