You pay your agency every month. Some months sales go up, some months they don’t, and the invoice stays exactly the same.
If that’s ever felt a bit off, you’re not imagining it. The way an agency gets paid shapes the work it does. This post explains how a revenue-share model differs from a retainer, where it helps, where it doesn’t, and what to ask before you sign anything.
How most agencies get paid
The usual setup is a monthly retainer. You pay a fixed fee for a set amount of work, like a set number of ads or hours.
Some agencies running paid ads charge a percentage of your ad spend instead, or as well.
Neither model is dishonest. Plenty of good agencies work on retainers. But think about what each one rewards:
- A retainer rewards keeping you as a client. The agency earns the same whether your revenue doubles or drops, as long as you don’t cancel.
- A percentage of ad spend rewards spending more. The agency earns more when your budget goes up, whether or not the extra spend is profitable.
That’s why so many founders end up paying for activity. Reports full of tasks completed, and no clear link to sales.
What revenue share means
In a revenue-share model, the agency earns from the growth it helps create. If your revenue doesn’t grow, neither does their income.
The exact terms vary a lot. Some agencies combine a smaller base fee with a share of revenue. Some take a share of all sales from a channel. Others only take a share of growth above a starting point. There’s no single standard, so always read the details.
The core idea stays the same. The agency’s income moves with yours.
It also means the agency carries some of the risk. If they back the wrong channel or run weak campaigns, they feel it in their own income. That tends to focus the mind.
What actually changes day to day
The payment model sounds like a finance detail. In practice, it changes how the work gets done.
Priorities shift toward revenue. An agency paid on growth will usually start with whatever is closest to a sale. Fixing an abandoned cart flow before redesigning a newsletter template. Improving best-selling product pages before writing blog posts.
Reporting gets more honest. When both sides care about the same number, there’s less reason to dress up results. A good partner will tell you when something isn’t working, because pretending costs them money too.
Ad spend gets questioned. Instead of pushing budgets up, a revenue-share partner should want each extra pound or dollar to pay for itself before scaling.
Channels get connected. Email, ads, search and marketplaces affect each other. An agency paid on total growth has a reason to look at the whole picture, not just one channel in isolation.
Where revenue share isn’t the right fit
Revenue share isn’t the answer to everything, and it’s worth being honest about that.
Some work doesn’t link neatly to revenue. Social media posting, store maintenance, customer service and sourcing all matter, but it’s hard to say how much a single month of that work added to sales.
For that kind of work, a fixed fee is often fairer to both sides. You know what you’re paying, and the agency knows what it’s delivering.
Revenue share also needs a business with something to build on. You need a product people want and enough sales history to measure growth against. A brand still finding product-market fit might be better served by a different setup.
Questions to ask before you sign
Whatever model you choose, these questions will tell you a lot:
- How exactly is the share calculated? Is it on total revenue or only growth? From which channels? Over what period?
- How is revenue tracked? Which tool is the source of truth, Shopify, Klaviyo, the ad platforms? Agree on this before starting.
- Is there a base fee as well? If so, what does it cover?
- What’s the minimum term? And what happens if either side wants to stop?
- Which work is revenue share and which is fixed fee? Get it in writing.
- What do you need from us? Access, approvals, stock levels, product decisions. A partner can’t grow a store if they’re waiting weeks for sign-off.
Common mistakes
- Choosing on price alone. The cheapest retainer can be the most expensive if nothing grows.
- Vague tracking. Not agreeing how revenue is measured leads to arguments later.
- Expecting overnight results. Revenue share doesn’t make growth faster. It makes the incentives line up.
- Handing over everything and disappearing. You still know your product and customers best. Stay involved.
- Assuming every service should be revenue share. Some work suits a fixed fee better, and that’s fine.
How Kreso does it
Kreso is built on this model. Our growth services, retention marketing, influencer marketing, wholesale, SEO, media buying and marketplaces, are revenue share. Our support services, like social media and Shopify management, run on a fixed monthly fee.
We don’t publish a standard percentage, because every brand is different. Terms are worked out with each brand on a call, based on the channels and the starting point.
We’re part of the NoRisk Digitals family, a performance-based outbound agency, so getting paid on results is how we’ve always thought about this work.
Kreso doesn’t grow unless you grow too. That’s not a slogan, it’s how we get paid.
Choose the model that matches what you want
If you need a fixed amount of work done each month, a retainer is simple and predictable. If you want a partner whose income depends on your growth, revenue share is worth a serious look.
Either way, ask the questions above, get the terms in writing, and agree on how you’ll measure success before any work starts.
If you’d like to see how revenue share would work for your brand, we’re happy to walk you through it. Book a free strategy call and we’ll talk about where you are and what we’d do first.
