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  1. #1
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    Cost of a Loyalty/Rebate Site
    Hello,

    I was wondering if any of you had any experience with loyalty/rebate sites and how much it would cost to get one of them started? I see that there are a few that are pretty successful such as ebates, fatwallet, and upromise, but I have an idea that's a bit different from all of those.

    If anyone has any idea on how much it might cost and what kind of profit can be expected to start it would be appreciated. Any references or links about sites like this would also be appreciated.

    Thank you,
    Allen

  2. #2
    Newbie IAmMe's Avatar
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    Bing cashback is about to take over the world..

    Too much work involved with setting up a cashback site, just to have Bing take most of the market. Focus elsewhere..

  3. #3
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    You may want to do some reading on the ones you mentioned. The first and foremost thing though is why? Not only will you get automatic rejections from many programs, but you have to build the trust of a community, figure out how you will build the community, keep them active and wanting to use you instead of the established ones, you have to set up protection for yourself from people signing up to use stolen credit cards, only ordering to get cash back then returning products, etc...

    If you are concerned with with start up costs, you probably should not be going into a cash back site. I would say at this point give yourself at least a $50,000 to $100,000 start up fee to compete and be profitable so you can protect yourself from lawsuits with fraud, get a serious protection system, advertise to get members, etc... Also, expect to loose money your first year or two at least. Even if you get a 10% commission from a Merchant, you have to pay your members, pay taxes, pay for advertising, etc...
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  4. #4
    Moderator BurgerBoy's Avatar
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    Quote Originally Posted by Rollerblader
    You may want to do some reading on the ones you mentioned. The first and foremost thing though is why? Not only will you get automatic rejections from many programs, but you have to build the trust of a community, figure out how you will build the community, keep them active and wanting to use you instead of the established ones, you have to set up protection for yourself from people signing up to use stolen credit cards, only ordering to get cash back then returning products, etc...

    If you are concerned with with start up costs, you probably should not be going into a cash back site. I would say at this point give yourself at least a $50,000 to $100,000 start up fee to compete and be profitable so you can protect yourself from lawsuits with fraud, get a serious protection system, advertise to get members, etc... Also, expect to loose money your first year or two at least. Even if you get a 10% commission from a Merchant, you have to pay your members, pay taxes, pay for advertising, etc...
    Good advice Rollerblader.

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  5. #5
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    Thank you for the replies.

    IamMe, thanks for the thoughts. I don't really think Bing is going to take over the world anytime soon though. I never heard of them until I started researching this type of business specifically and now that I am I still rarely see mention of them holding a majority of the market.

    Rollerblader, thanks for the figures. That's what I was looking for. I am not overly concerned with the costs because I do not plan on putting together a fly by night operation. I am expecting to put in time, effort, and money for success, just as I would with any other business. I understand that there are many difficulties and hurdles to get past in this industry, but that can be said about any start up. I feel that if I take proper measures to safeguard myself from these problems I can succeed.

    The reason why I want to do this is based on a few things. I just recently got the idea from those incentivized freebie websites. I felt they were a good idea, but they seemed very cheap and unorganized. I figured there should be a better way. Then I saw cash back shopping and was sold. There are only a few major competitors even though there are many many minor ones and I don't think the market is close to being saturated. I've been looking for ways to save and earn money online for years and just recently found ebates.com and the likes. I would venture to say that the majority of people also don't know about these sites. I have several ideas that will set my site apart from the rest.

    If anybody has further insight into starting a company like this it would be greatly appreciated.

  6. #6
    ABW Ambassador 2busy's Avatar
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    You may want to do some reading on the ones you mentioned.
    +1

  7. #7
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    Been reading as much as I can about them. Why not give some advice if you have any? Or nothing at all?

  8. #8
    Moderator BurgerBoy's Avatar
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    Quote Originally Posted by allen18328
    Been reading as much as I can about them. Why not give some advice if you have any? Or nothing at all?
    Moderator Note: We don't need an attitude here!

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  9. #9
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    Here is where you should start reading: ParasiteWare and OneCause - Is LinkShare a parasite now, and including eBates, Upromise, and OneCause, and then take a really good look at Affiliate Fair Play.
    Since June 10, 2012 a vegan aarf but still writing the Hound Dawg Sports Blog
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  10. #10
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    No attitude from this end BurgerBoy. I just feel that if somebody is going to post it should be of some significance.

  11. #11
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    AffiliateHound - Thanks for the resources. I understand why you and many others do not like incentive programs, but my perspective on it differs from yours a bit. I see nothing wrong with paying a rebate to shop at a site. I do agree with all of you that many methods of stealing sales are wrong. Sites should not get credit for a sale if it was made from another site, but simply paying a rebate is fair game in my eyes. If you wanted everything to be fair all affiliates should have the same amount of money and education to start, they should all have the same type of website and the same capital for advertising. This will never happen so life will not always be fair.

    If anyone else has further info on incentive/loyalty sites I am looking forward to hear from you. Maybe with some help I can create something that will change your minds about the type of marketing as a whole.

    Allen

  12. #12
    ABW Ambassador Daniel M. Clark's Avatar
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    Quote Originally Posted by allen18328
    No attitude from this end BurgerBoy. I just feel that if somebody is going to post it should be of some significance.
    It was significant. She was reiterating, in shorthand, a previous statement - thereby giving it additional weight and importance.

    And I agree with her. You should read up on that particular business model and pay close attention to the problems that it has generally causes us affiliates over the years. e b a t e s is a four-letter word to a lot of people 'round these parts. u p r o m i s e isn't much better. If you want to use those for inspiration, you'll find yourself making enemies pretty quick around here.
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  13. #13
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    Quote Originally Posted by allen18328
    If you wanted everything to be fair all affiliates should have the same amount of money and education to start, they should all have the same type of website and the same capital for advertising.
    That's bull and to use a statement like that to JUSTIFY the illegal, immoral and disgusting loyalty-site model - the MAJORITY of which make their money by STEALING from legitimate affiliates - is preposterous.
    Since June 10, 2012 a vegan aarf but still writing the Hound Dawg Sports Blog
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  14. #14
    ABW Ambassador purplebear's Avatar
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    I counted to 10 and didn't go off on the subject. Am so proud of myself.

    Will just say this allen18328

    I don't know who you are or really what even you have in mind for sure. Don't know if you're already an affiliate and just wanna change course or not or what you're planning. Somethin to think about tho. The incentive/loyalty sites you mentioned as your example.... These are sites that have all been around for quite some time. Unless what you have planned is really somethin extraordinary (am not putting your idea down or anything cos don't know what it is) Just saying that since these sites are already well established sites, you're gonna have a very hard time competing with them since you'd be the new kid on the block.

    Maybe you can, I don't know. Just a plain ole regular coupon type site is very hard if not impossible to try to compete with those already established sites. So, I'm not trying to give you a hard time or anything. Just a lil bit of reality. If that's the direction you want to go in, it will be hard for you to take any of their already established visitors away from them and you may have a better shot at some other method. I don't know how much you know about them.

    What the others have said is true, too. I definitely wish there were a whole lot more of them but there are programs that if that's the type of site you plan to have, they won't let you into their program so you will be limited on who you're able to work with.

    Don't think your question was really concerned bout how popular you'd be amongst other affiliates lol but if that were a concern.....your name will be mud to quite a few affiliates who definitely don't like that method used as an affiliate.

    (Am not lumping all incentive/loyalty sites together.) I don't know all of em out there and am not saying they're all bad. Only saying that there are some very well known ones who aren't exactly loved by other affiliates and for good reason.

    If you are not planning on umm I'll say using unethical methods as your method of bein an affiliate, I wish you all the best with your site. If you are....am gonna stick with me bein good and not commenting on what I'd wish for ya.

  15. #15
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    Agreed with all the posts that answered your question from their perspective.

    Also agreed that you "showed attitude", not welcome here since you are the one asking questions and others are spending time to answer. A little humility wd help.

    Now back to your question, my 2 cents.
    If you have an idea which is very different from the ones you mentioned, plus others that you didn't..mypoints.com, yub.com, it will be hard to get new members to sign up. All the cashback sites will first have to have a good # of members before they can make money. That will take time. Plus you will need to have something (a big name, a respectable company (bing cashback is Microsoft's, yub.com is buy.com's) that will instill confidence.

    Marketing a new cashback site is also difficult. PPC is ruled out, since initially you won't have enough conversions to pay for ppc plus the cashback and still make money, unless you are backed by some VCs or have enough capital yourself.

    So there are some hurdles. May not be a problem if you have a unique idea, and/or enough capital. You can only decide for your self since you know what it is that will set you apart.

    Remember, when JellyFish.com launched its cashback site, others were already established in the field. But jellyfish's technology was better than others which set them apart and they could sell it to Microsoft, which is now Bing Cashback.

  16. #16
    ABW Ambassador Daniel M. Clark's Avatar
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    Quote Originally Posted by allen18328
    Sites should not get credit for a sale if it was made from another site, but simply paying a rebate is fair game in my eyes.
    You're going to have to explain how you can pay a rebate without stealing sales from existing affiliates. If you can do that, you'll make friends and have a good business that everyone will be happy with. If you can't... well, you'll have quite a lot of enemies in the industry who will like nothing better than to see to it that you fail miserably.

    Ball is in your court. Can you explain how you'll pay a rebate without stealing sales from existing affiliates? If the shopper hits my site and gets my cookie set, then clicks your toolbar (presumably you'll be using a toolbar), how will you guarantee that you don't steal my commission?
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  17. #17
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    ? Shop thru the site, without a toolbar. And in cased you missed it -

    Ethical Loyalty based sites
    http://forum.abestweb.com/forumdisplay.php?f=517

    We have a loyalty forum here. There are some good ones out there that don't steal from other affiliates.

  18. #18
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    Quote Originally Posted by Trust
    Ethical Loyalty based sites
    http://forum.abestweb.com/forumdisplay.php?f=517

    We have a loyalty forum here. There are some good ones out there that don't steal from other affiliates.
    Private forum - password required: Why if they have nothing to hide?
    Since June 10, 2012 a vegan aarf but still writing the Hound Dawg Sports Blog
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  19. #19
    Moderator BurgerBoy's Avatar
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    Quote Originally Posted by AffiliateHound
    Private forum - password required: Why if they have nothing to hide?
    Good question. Michael will have to see about that though.

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  20. #20
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    Quote Originally Posted by AffiliateHound
    Private forum - password required: Why if they have nothing to hide?
    Didn't know. Probably to keep out some of the stuff found in this thread, don't blame them. It's almost 2010 and we still have people broad stroking issues thinking every loyalty or rebate site is the same or bad.

  21. #21
    ABW Ambassador Daniel M. Clark's Avatar
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    I don't think they're all bad, but my original question is still a valid one: if he's going to do it the same old way with the same old thievery, that's a problem. The question is, can he - will he - do it in such a way that it doesn't steal from other affiliates? I didn't say it couldn't be done; I think it's valid to ask whether he can do it.
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  22. #22
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    He hasn't laid out specifically how his will be different and it could be for very good reasons. But he did say:

    "I do agree with all of you that many methods of stealing sales are wrong."

    But who knows until you actually see it. But you can have a legit rebate site. I never had a problem with a site such as Fatwallet when all the rebate stuff was thru the site. Then they added a toolbar and I haven't kept up with how that's going. I don't have a problem with thru the site stuff. And we do have members here that have those type of sites, doing it the right way.

  23. #23
    Believe knight01's Avatar
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    Quote Originally Posted by AffiliateHound
    Private forum - password required: Why if they have nothing to hide?
    At one time I was in that forum, somehow I lost the password. But when H set it up, the purpose was to discuss the challenges that face legit rebate/loyalty sites. Nothing to hide, simply was done to keep the 'broad stroking', as Trust put it, out of the mix and the discussions focused.
    Last edited by knight01; December 27th, 2009 at 09:47 PM. Reason: wrong phrase from Trust
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  24. #24
    ABW Ambassador Daniel M. Clark's Avatar
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    I'm with you, Trust, and maybe I'm nitpicking, which might explain why I'm asking for a clear statement of intent, if not method. To me, "many methods of stealing sales are wrong" is very, very different than "stealing sales is wrong" because that first statement says that "many" methods of stealing are wrong. I maintain that all methods of stealing are wrong because stealing is, itself, wrong. Like I said, maybe I'm nitpicking. But I still think it was a valid question to ask of someone who just joined and has only posted in this one thread. I'm trying hard not to assume anything about him - good or bad.
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  25. #25
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    Lol I love how I finally get some people posting on my thread. Trust, thank you for seeing both sides of every situation. People who are so set in their ideas that they don't see every angle are just as bad as those they oppose.

    Now back on topic.

    I am not going to post in a public forum the full intent of my ideas. That would just be a silly thing to do. I will tell you all that I do have every intention of being a legitimate and honest business. That is actually something I will be basing my business on. When my site's integrity becomes clear it will help me win over a lot of people allowing my business to grow further. Who knows, it might even win some of you over.

    I do plan on going about this project as a complete business. Not a fly by night operation running on hopes and dreams. I will have enough capital to make it work or I won't do it at all.

    For those of you who aren't completely against rebate sites, what do you think could be improved on the current ones. What do you think about their payment methods, timing of payment, how you obtain cashbacks. Stuff like that. Please, nothing about them using toolbars or other methods of stealing. I don't want this turning into another discussion about that.

    And Yes Daniel, all stealing is wrong. I'm with you there. Just worded it wrong was all.

    Thanks again.
    Allen

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