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December 4th, 2009, 10:49 AM #1Commission Percentages
superCool had 2 sales for the same merchant on the same day. one commission was $7.50 and the other was $22. when superCool looked at the details he noticed that both sales were for the same exact amount - $149. one of the products had a 5% commission and the other had 15%. wow – what a difference. makes superCool think about which items he should promote hardest. never really thought much about the varying commissions within a single merchant, but it can make a big difference.
do you think the commission difference is due to the merchant markup for the item or because it is easier to sell? (or some other reason)
December 4th, 2009, 10:54 AM #2
We offer "Item Based Commission" functionality for merchants b/c often times there are higher margins on certain products, so some merchants are willing to pay out more for those products.
I always try and remind merchants, though... that measuring what they earn or don't earn on any one particular sale isn't that important. What's important is that the Affiliate likely just sent them a new, long term customer (if the merchant does a good job of handling the order and fulfills efficiently, etc.). And even if they don't make a thing on that one sale with commission payouts, that's a small price to pay for a new customer.
I always say... Affiliates don't get the credit they deserve for being new customer acquisition tools.
December 4th, 2009, 10:55 AM #3
Usually commissions are proportional to the margin that merchants have in their products. Many merchants have a similar margin for all of their products, so they pay a fixed commission rate. Some merchants who have widely varying margins will pay lower commissions for their low-margin products. Other merchants will still pay a fixed commission rate and just make it up on the mix, knowing that they'll have some low-margin items and some high-margin items.
December 4th, 2009, 11:19 AM #4
Look at giants like Walmart, Target, and Overtock, that pay as low as 1% (or in Walmart's case, ZERO) for some products, and as high as 7% and 11% for others.
December 4th, 2009, 01:02 PM #5
Been a while since I looked at amazon's pay structure but don't some of their payouts vary not only on the product type but even depending on whether the person "shops around" during the session or if they come directly to the page and buy right then?
I know a lot of electronics pay lower commissions because there is not much of a markup. Definitely something to pay attention to.
By Matt McWilliams in forum Merchant Best Practices ForumReplies: 23Last Post: October 23rd, 2007, 12:41 PM