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  1. #1
    Affiliate Manager
    Join Date
    January 5th, 2010
    Posts
    38
    Disadvantages of managed CPS networks?
    Hi guys,

    We are currently in the process of signing IOs with 3 midsize managed networks. It's CPs (per sale program, not clicks, not leads).

    I prefer managed accounts as it would mean that networks will push our offers to their affiliate base. We don't pay any setup of management fees besides the commission, and refundable deposit that we negotiated is very modest; so there is not much risk involved in them not pushing it hard enough.

    Now, I saw number of posts here where you guys were raving against managed networks and I would like to understand what your concerns are and what risks you see.

    Someone was mentioning that networks worry only about their own profits, which should make sense, but doesn't it mean that if they don't make $ for us, they don't generate profit from our offer either. I don't worry about them duplicating our offer and running it internally, as there would be way too much logistical issues.

    We also are setting initial monthly per sale cap (for a test) since they will base their invoices not on our sales reports, but on their own. So, we want to make sure that there are no discrepensies.

    Initially we use PayPal for our payments and will setup credit cards (merchant account) after some trial period. So, the Paypal itself is my concern to certain degree as I understand it happen to freeze accounts when there is inflow of transactions. Our product cost is less than $200 so we won't exceed per customer amount that PayPal seem to have (as per my knowledge it's $1900 or so - if you have other information I would appreciate hearing it)

    I would like to learn from experience of others' and hear your opinions on potential pitfalls to avoid them with managed networks for merchants.

    Thank you very much.

  2. #2
    http and a telephoto
    Join Date
    January 18th, 2005
    Location
    NYC
    Posts
    17,708
    Well that's a new term for CPA networks. You should do a search here about CPA networks and all their inherent problems.

    Putting a cap on affiliate sales is never a good thing. Affiliates that are web based won't touch your offer if they know there is a cap, PPC affiliates won't run it and emailers won't touch it either.

    The "managed" networks allow affiliates that you may not approve of to run your offer because that is how they work. Their affiliates have subaffiliates that have subaffiliates and you have no idea where your offer will show up.

    Take a look at Shareasale network, and either hire a short term consultant, use their Fast Start option, or look into hiring an OPM either short or long term. You will have more control over your affiliates, the offers you want to make, the commissions you want to pay. With a network like Shareasale you don't pay unless you make sales, then they take a percentage of the sales. There is a one time network access fee.

    And since you don't incur costs unless sales are made, why would you cap the amount of money you are paying out to affiliates? If you don't trust the network(s) you are working with to give you accurate tracking that is a BIG red flag that you should *not* be working with them.
    Deborah Carney
    TeamLoxly.com BookGoodies.com ABCsPlus.com

  3. #3
    ABW Ambassador Joshua's Avatar
    Join Date
    August 17th, 2006
    Posts
    854
    Quote Originally Posted by getit
    Hi guys,

    We are currently in the process of signing IOs with 3 midsize managed networks. It's CPs (per sale program, not clicks, not leads).

    I prefer managed accounts as it would mean that networks will push our offers to their affiliate base. We don't pay any setup of management fees besides the commission, and refundable deposit that we negotiated is very modest; so there is not much risk involved in them not pushing it hard enough.

    Now, I saw number of posts here where you guys were raving against managed networks and I would like to understand what your concerns are and what risks you see.

    Someone was mentioning that networks worry only about their own profits, which should make sense, but doesn't it mean that if they don't make $ for us, they don't generate profit from our offer either. I don't worry about them duplicating our offer and running it internally, as there would be way too much logistical issues.

    We also are setting initial monthly per sale cap (for a test) since they will base their invoices not on our sales reports, but on their own. So, we want to make sure that there are no discrepensies.

    Initially we use PayPal for our payments and will setup credit cards (merchant account) after some trial period. So, the Paypal itself is my concern to certain degree as I understand it happen to freeze accounts when there is inflow of transactions. Our product cost is less than $200 so we won't exceed per customer amount that PayPal seem to have (as per my knowledge it's $1900 or so - if you have other information I would appreciate hearing it)

    I would like to learn from experience of others' and hear your opinions on potential pitfalls to avoid them with managed networks for merchants.

    Thank you very much.
    Launching an offer with only paypal is a horrible idea. Merchant accounts will save you money, give you more flexibility, and make you look legit. Not to mention integrate with cart/payment solutions with ease.

    What's your offer, or the type of offer? I can give some better advice if I know that.

    Caps are pretty standard in the CPA world, as long as similar offers exist to redirect to if the offer hits the cap. It's a different kind of affiliate.

  4. #4
    Affiliate Manager
    Join Date
    January 5th, 2010
    Posts
    38
    Yes, I agree about the paypal. We are setting up merchant account etc, it just takes a bit of time.

    "...as long as similar offers exist to redirect to if the offer hits the cap"... Can you please elaborate on it, Joshua? You mean if the network has some similar offer? No, they won't have. We are to certain extend unique. To certain extend :-) Or you mean that as merchant we shall have few similar offers? I think that's not what you mean, as the whole point is to slow down the process a bit initially to not by accident overpay for sale that is reflected on network's side but not on our end.

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