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  1. #1
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    Higher Prices Through Affiliate Links
    Hi had a question about a client of mine. I have seen other sites in the past like ebags.com charging customers more for products if they came through an affiliate link. Is this practice accepted?

    The reason I ask is because I have a client who is the low price leader in their industry and it's hard for them to give a competitive percentage to affiliates because of their low prices. I thought about this as I have seen other merchants increase prices based on coming in through an affiliate link. But before we really started discussing this, I want to get some feedback from the experts...which is why I am here.

    If we didn't go this route, I would put together something that would hopefully help affiliates choose us, lower prices can help conversion rates for the affiliates.

    Thanks!

  2. #2
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    I have never heard of merchants charging a higher price if a customer arrived through an affiliate link. That makes no sense

  3. #3
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    I saw it with a few companies in the past. Basically it's a way to cover the costs of the affiliate percentage.

  4. #4
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    Customers would get REALLY pissed if they saw this happening. And yes they would figure it out.
    Deborah Carney
    TeamLoxly.com BookGoodies.com ABCsPlus.com

  5. #5
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    I've been told GoDaddy does this...

    Under $10 + fees directly, but over $10 + fees via affiliate link.

    ...though, really, I've seen prices all over the board from them for my own domains, even when purchasing or renewing multiple domains, it can vary.
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  6. #6
    Affiliate Manager David S.'s Avatar
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    I've never seen this personally, but I've got to believe this cannot be acceptable. Somebody will find out sooner or later and it's just not worth it.

    We consider ourselves the low price leader in our industry and I'd be interested to see what you come up with, thanks for posting this .

  7. #7
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    Quote Originally Posted by vetofunk
    I have seen other sites in the past like ebags.com charging customers more for products if they came through an affiliate link.
    I do a lot of business with ebags.com and have never noticed this happening. I would really doubt they are doing this and maintain as successful an affiliate program as they do. (If it were happening, I would drop them in a second.) Can you verify this?
    Since June 10, 2012 a vegan aarf but still writing the Hound Dawg Sports Blog
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  8. #8
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    Didn't Amazon get in trouble for something similar many years ago. If I remember right, they were hit for showing different prices in different states/cities but I could be wrong.

    I assume doing the affiliates vs. non-affiliates thing is considered the same.

    I wouldn't worry about your commission rate too much if you can stay some what competitive. You'll clean up in conversion rates on "true" price comparison sites and most good affiliates will see the benefits of lower prices/higher conversions vs. the opposite.

    Bob

  9. #9
    ABW Ambassador Boom or Bust's Avatar
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    I would not work with a merchant who does this. The practice effectively gives the merchant the edge in competition over the affiliate and we've got enough competition already.



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  10. #10
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    Completely unacceptable practice to me.. are you saying the landing page reached through an affiliate link states a different price?

    I would drop a merchant if I found this to be the case.

  11. #11
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    Showing different prices for different people would probably backfire.

    Your client might consider making a separate store (with a different domain). To maintain the integrity of the affiliate site, you could exclude the search engines in robots.txt.

  12. #12
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    I wouldn't recommend it, but it's absolutely something that some merchants play with. How is this "substantively different" from merchants who offer non-commissionable coupon codes (so that if the consumer uses the coupon, the affiliate is not paid)?

    There was an "affiliate/payment technology" company in 1998 or 1999 that actually allowed affiliates to choose the pricing of the product. I actually used this when promoting my second "Adbility Brainstorming Session" in 1999. There was a 'base price' (I think mine was $89) which provided a nominal commission; the affiliate could select any higher price and would receive the excess as extra commission. It actually made sense for "one-time deals," like my seminar or a single-SKU merchant (ebooks). There was also a 'default price' if someone entered the page without any affiliate code (I believe I set mine to $149).

    We're all used to people paying different rates for airline seats. And hopefully you realize that you pay $5 or $10 more if you rent a car from an "airport branch" of a car-rental agency, instead of taking a cab 2 miles to a non-airport branch. No, it's not a perfect analogy.

    FYI, there is some very interesting psychology surrounding consumers' perceptions of a product or service, based on the price they pay. In general, a group of consumers who pay more for an item are more satisfied with the item. And consumers who pay for a product or service are more likely to actually use it and be satisfied with it (after acquisition) than those who are offered the same product or service for free.

    When I was practicing as an estate-planning attorney, I found that people who paid $10 to reserve a space at a seminar were MUCH more likely to actually attend than those who were offered the seminar for free -- and among attendees, those who paid were more likely to value my advice and move forward and hire me to assist them with their estate planning. (My practice was to charge $10 per couple to attend the seminar, but I'd send "free seminar" coupons to certain professionals [accountants, financial planners, etc] to use or share with their clients.)

    In general, I wouldn't want to send customers to an e-commerce business that charged "my referrals" more than it charges folks who find the site through Google. But I understand the business issues involved, and wouldn't consider it unethical IF it were properly disclosed to affiliates.
    Last edited by markwelch; September 16th, 2008 at 03:16 PM.

  13. #13
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    I agree with you about factors that determine variable pricing, it exists everywhere. Technically a merchant can change the sticker price - this is called price customization. It can exist if "there is some recognized legal justification for different treatment", and under many other circumstances.

    The difference for me is that I only promote traditional products - a book, pair of shoes, candles (all examples). Items with sticker prices.

    It would carry very little weight if a merchant tried to justify premium-charging my traffic simply to cover the cost of commission back to me. I feel responsible for my visitors, and don't feel good about that.

    If any of my merchants adopt this practice, I would drop them immediately.

    Going back to original question, however, I think affiliates are more than willing to accommodate thinner margins if sales are steady. The "big ticket" sales are harder to come by, and I like to have steady performers on my sites, even if they don't pay the best commission.

  14. #14
    ABW Ambassador simcat's Avatar
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    There was a thread last year about a merchant who was showing 'inferior' coupons thru the affiliate channel. The non-affiliate traffic got offered a better coupon.

    People know plane passengers all pay different fares, but I think it still p**ses some people off when they find out the guy sitting next to them paid half what they did.

  15. #15
    Full Member Jim Guinn's Avatar
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    I know from experience that GoDaddy's affiliate program (Wild West Domains) does not always provide affiliates, or should I say resellers, with the same best prices as GoDaddy. That is why I dropped them when I was doing affiliate marketing/reselling.

    Jim
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  16. #16
    Life is Supposed to be Fun! Rexanne's Avatar
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    I don't care how it's spun, it would make me run like a mad woman from promoting a merchant who charged MY customers more. Doesn't do a thing for your visitors and you'd be doing your traffic a disservice promoting that merchant.
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  17. #17
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    some airlines -and hotels- used (and still do?) to do that and when asked they said is the cost of acquisition intergrated within the price, "showing" either in terms of the flight ticket cost (more expensive) and/or as a "service fee"

  18. #18
    Shimmy Shimmy Bang Bang shimmy's Avatar
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    Quote Originally Posted by Robert Drumm
    Didn't Amazon get in trouble for something similar many years ago. If I remember right, they were hit for showing different prices in different states/cities but I could be wrong.
    Amazon still doesn't when it comes to their Amazon Prime shipping service. When I log into my account they raise the price on some items just because I already prepaid for the free shipping

  19. #19
    ABW Ambassador Boom or Bust's Avatar
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    Quote Originally Posted by shimmy
    Amazon still doesn't when it comes to their Amazon Prime shipping service. When I log into my account they raise the price on some items just because I already prepaid for the free shipping
    Now this WOULD be unethical and perhaps illegal.

    However, raising prices for affiliate sales would be like some businesses that charge a higher price if you pay with a credit card to cover their transaction fees/processing. I don't believe there's anything wrong with that. But as an affiliate, the pricing advantage the merchant would have automatically eliminates them from my services. Price is everything in this business!



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  20. #20
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    Mark, promoting items as more of a "drop shipper" (meaning cobranded site where you set your own prices, I remember those as well) can have variable pricing, I don't consider most of that to even be "affiliate marketing". It is quasi drop shipping even though the final checkout is with the merchant.

    Services, airlines, hotels and eBooks can have various prices depending on multiple factors and most consumers are used to that and are ok with it.

    But if you are in the retail space, and have worked in Customer Service even for a day, you will understand quickly that the prices on your site better be consistent or all h*ll will break loose. Any merchant that shows higher prices from an affiliate click will quickly find themselves losing instead of gaining sales through not only the affiliate channel, but from the traditional marketing as well when people start posting to message boards that they got x price today and y price tomorrow and x price again the next day. Joe Consumer doesn't know if they clicked an affiliate link or not, they will just see prices jumping around.

    And it would give Joe Consumer another reason to not click links to go shopping. And not to trust online stores and go back to shopping locally even if they can't get what they really wanted.
    Deborah Carney
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  21. #21
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    Quote Originally Posted by Boomers
    Now this WOULD be unethical and perhaps illegal.

    However, raising prices for affiliate sales would be like some businesses that charge a higher price if you pay with a credit card to cover their transaction fees/processing. I don't believe there's anything wrong with that. But as an affiliate, the pricing advantage the merchant would have automatically eliminates them from my services. Price is everything in this business!

    Actually, it's been covered on Consumerist.com quite a bit... it's against the merchant agreement retailers have with credit card companies to charge a fee.
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  22. #22
    ABW Ambassador Boom or Bust's Avatar
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    Quote Originally Posted by Celicaphile
    Actually, it's been covered on Consumerist.com quite a bit... it's against the merchant agreement retailers have with credit card companies to charge a fee.
    Ahhh...



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  23. #23
    ABW Ambassador Joshua's Avatar
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    Quote Originally Posted by Celicaphile
    Actually, it's been covered on Consumerist.com quite a bit... it's against the merchant agreement retailers have with credit card companies to charge a fee.
    Actually, the terms state that you can't charge more for credit card transactions, but you can charge less for cash transactions. This is how some gas stations can charge different prices for cash and credit, while technically not violating the agreement. It's a fine line, for sure .

    The end-result is the same, but it can't be positioned as a surcharge, per se.


    As for the Amazon.com issue mentioned by Robert Drumm (not affiliate related), here's an article for those who are interested - http://news.cnet.com/2100-1017-245326.html . Is it illegal? No. Is it a good PR move? Absolutely not. Was it good for market research? Probably the best pricing testing they could ever run.

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