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  1. #1
    Newbie affilla's Avatar
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    What do you think about self-referrals?
    Hello, Affiliates!

    What do you think about the number of hijackers in affiliate marketing? 10%? 3%? 50%? And do you feel to be protected by the vendors of the programs that you are promoting?

    As I think, when it comes to big ticket items, a lot of people get involved in hijacking in order to get a big discount. Once they sign up and buy under their own affiliate link, they get the commission that you should have earned.

    It makes affiliate marketing to be less atrative, doesn't it?

    Could anyone help me to find any affiliate marketing benchmarking about self purchases and hijacking?

  2. #2
    Affiliate Manager craigstephen's Avatar
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    hello affilla,

    A very good question you have raised, i asked the same question when came to ABW. the answer is yes there are many hijackers (right name could be manupulators) who can sign up under their own Affiliate link and get a discount, or get high priced product and After when Affiliate gets paid, they ask for refund....

    No one could estimate in how much percentage they exsist but all you can do is take preventive actions, update your strict Terms of use; make some strict violation policies for those affiliates. increase affiliate payout time if you think your refund policy is longer. Also sign up with reliable Affiliate network who can void the transaction automatically if certian action took place. Also close check all of your transaction, its link, IP address, Affiliate progress etc.

    thanks
    [FONT="Georgia"][SIZE="4"]Craig Stephen[/SIZE][/FONT]
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  3. #3
    ABW Ambassador simcat's Avatar
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    There are lots of ways affiliates get screwed out of sales, this is only one.

    If you're worried about it, only promote sites that don't allow self-referrals. Even that won't work all the time. You won't stop someone who is determined.

    Products related to webmasters, seo's, etc. are more vulnerable to this sort of thing.

  4. #4
    Affiliate Manager qualityunit's Avatar
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    Yes, every affiliate program will once face the problem of fraudulent commissions, but with clever fraud protection rules, minimum payout limits, delayed payouts by e.g. 30 days after transaction and secure tracking you can sleep quite well.

  5. #5
    Affiliate Manager qualityunit's Avatar
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    Affila: BTW good to see you in this forum, Welcome.
    As we already wrote together in the past, in our program we don't block selfpurchases.
    I'm sure, that affiliate can refer customers better, if he has his own copy of your product, because he already believes in quality of the product - why to penalize affiliate for his good will to buy the product also for himself ?

    I think, that fraud you can expect more from affiliates, which did not placed their own order

  6. #6
    The Seal of Aproval rematt's Avatar
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    Quote Originally Posted by qualityunit
    Yes, every affiliate program will once face the problem of fraudulent commissions, but with clever fraud protection rules, minimum payout limits, delayed payouts by e.g. 30 days after transaction and secure tracking you can sleep quite well.
    I don't think this is what the OP is inquiring about. I believe they they are wondering how often consumers find information about product on an affiliate site and sign up with the program to receive the commission themselves on a self purchase. Sorta like a personal discount.

    Frankly it's not really something that I'm going to lose sleep over. The typical consumer isn't going to join networks and affiliate programs just to save the amount of the commission, with the possible exception of those selling "get rich", "Google whatever" and "wealthy whatchamacallits" schemes on Clickbank. In that case it's affiliates attempting to sell to other affiliates that have access to the same programs that you do.

    -rematt
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  7. #7
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    How is this even a real problem?

    From the merchant prospective, the merchant made the sale! They have made their profit. So what it it's a one-time-only deal. And who knows, maybe the customer will come back again and buy something else.

    As to affiliates having their commissions stolen ("10%? 3%? 50%?") - less than 3%, more like a fraction of a percent. Too negligible to even think about.

    As to merchant who prohibit self-purchases, I am loath the promote those programs, and with the exception of Amazon, do no think I belong to any. I feel strongly that such merchants are either stupid or dishonest, or both, and most likely have many other absurd rules designed to cheat affiliates out of legitimate commissions.
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  8. #8
    OPM and Moderator Chuck Hamrick's Avatar
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    AffiiateHound I must be one of those merchants (OPM) that you loath because I welcome affiliate self purchases. That is for retail goods and I generally give them the highest commission available for coming to me with the question.

    With subscription based programs I have seen top affiliates purchase the difference to get the to the next tier. They then give the subscription away as a prize for a contest.

    As for fraud, in hosting where we give life time value commissions higher than the purchase price of the package we see fraud. The affiliate generally uses a stolen credit card number which is flagged by the fraud department of the merchant. We then verify with the network, get the affiliate booted from the program and network with all commissions reversed.

  9. #9
    Newbie affilla's Avatar
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    To Prevent but not just to Punish!
    I am confused. How not to warry about self-purchase policy? Some vendors do not make any efforts to prevent self-purchases but punish self-purchasers either by payout threshold or by withdrowing the commissions.

    When a fraudulent purchase is detected, the commission is withheld. The company, of course, keeps their money. The consumer keeps the item purchased, but doesn't get the discount. How sad. Same with payout threshold: the vendor pays nothing to a real affiliate and only 'virtually' pays to the self-purchaser. 'Virtually' here means that there is only a record stated 'you got commission' but no real money paid ever!

    The real affiliate (which might be you) is the loser in this scenario. The affiliate spent the time and money driving traffic to the company's website. The company got paid. The affiliate got nothing.

    So, you may see why the company needs a clear policy that alerts and discourages customers from making self purchases. It is not enough to punish the hijacker (manupulator). Once it happens, the commission is lost for the affiliate and there is no way to recoup it. Instead, if an affiliate program vendor is interested to protect his affiliates, all his efforts should be made to prevent self purchase cases!

    And again, can anyone help with affiliate market benchmarking info? Is there any info about: how many orders are made during 15, 30, ..., 365 days after the first visit to calculate how many sales are lost due to short cookie time; how many orders are lost nowdays due to multiple browser usage, due to other factors?

  10. #10
    ABW Ambassador 2busy's Avatar
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    Choose products that result in commissions for you if you're having problems like that.

    Benchmarking is not available, you need to do your own benchmarking because the numbers that apply to your sites and your merchants are unique to you. What works for one affiliate on one site cannot even be applied to another site of that same affiliate. Sales are lost due to dozens of factors outside your control.

    It is not in the merchant's interest to restrict sales or disallow self purchase commissions as AffiliateHound explains and as Chuck Hamrick agreed. They have no reason to limit sales for your benefit.
    Last edited by 2busy; February 17th, 2010 at 07:32 AM. Reason: forgot an l

  11. #11
    Affiliate Manager craigstephen's Avatar
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    Affiliate, i think you have started another thread with same topic, why dont you carry on your existing thread, it will help you better in getting a solution, as well as others may benifit from it too....

  12. #12
    Moderator MichaelColey's Avatar
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    Moderator Note: I've merged the similar and duplicate threads, removed duplicates, renamed to a more appropriate title, and moved to a more appropriate forum.
    Michael Coley
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  13. #13
    Moderator MichaelColey's Avatar
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    Like rematt and AffiliateHound, I just don't see this as a major issue. Very few consumers will even know about affiliate programs, much less sign up for one and use their links to get a pseudo-rebate, after finding a merchant on your site. It's too much work, plus you have to consider minimum payment thresholds.

    A bigger problem is consumers who find a merchant through an affiliate site, then go to their favorite loyalty site to purchase and get cash back or other rewards. As much as I dislike that, I think it's just a cost of doing business and it's the consumer's choice. It's kind of like people going in to Barnes & Noble to browse through the new books, then going online to buy them from the cheapest online store.

    Like several others have said, I actually prefer merchants who allow self-referrals. If conversion ratios are lower than I expect or if they drop off, I want to be able to do a test purchase to make sure there aren't problems. Plus, I want to earn a commission on my own purchases.
    Michael Coley
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  14. #14
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    Anyone - and they are few and far between - who would go to the trouble of joining an affiliate program and maybe even a network to get a commission on a single purchase will go to every coupon site, toolbar, etc. they can possibly locate before making their purchase, if they are unable to join the affiliate program. So for an affiliate to think they would have earned a commission from this "customer" under any circumstances, is illusory.

    Also, don't most affiliate programs look at things like, oh, I don't know, like maybe a WEBSITE that has affiliate links, not to mention all those other criteria that get discussed here when newbies ask about getting approved for programs, before approving new affiliates. So how likely is a customer looking for a discount (i.e. commission) going to get approved?

    Quote Originally Posted by Chuck Hamrick
    AffiiateHound I must be one of those merchants (OPM) that you loath because I welcome affiliate self purchases.
    Chuck, You've got what I said backwards - you're in the non-loath group.
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  15. #15
    The "other" left wing davidh's Avatar
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    With webhosting and maybe a couple of other things, I wouldn't be surprised if there is a discernible percentage of people who will sign up to get the kickback.

    But with most consumer goods, I would be shocked if the rate were any higher than one-thousandth of one percent. The average consumer doesn't have a clue about the idea of signing up as an affiliate of Sears or Kmart or Overstock.com or whatever store, or the wherewithal to do so.
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  16. #16
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    If a merchant doesn't allow self purchases, it needs to be in the TOS. My merchants welcome self purchases. Fraud would be if you are making purchases and then canceling the purchases so that the program is paying on non-existent purchases.

    If you are encountering issues with one merchant, go talk to their competitor and promote them instead.
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  17. #17
    http and a telephoto
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    Quote Originally Posted by davidh
    With webhosting and maybe a couple of other things, I wouldn't be surprised if there is a discernible percentage of people who will sign up to get the kickback.
    Yes, I agree, that would actually be something that can easily be abused. But I would hope that if you self bought the hosting and liked it, you would promote it even more

  18. #18
    More Cheesier Than Ever Cheesehead's Avatar
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    There are some items where large commissions are paid, where this could be a problem. Any time you dangle a commission that can even exceed the purchase price, people find a way to get it.

    But for most typical items paying out 5-20%, I think this is nearly non-existent. Most people don't even know what affiliate marketing is, much less have the know-how to find and join the respective network or merchant, wait for approval, get the links, and then somehow click through on them. They just are not going to go through all that work.

    If you want to worry about something, look at the cash-back sites Michael mentioned. And worse yet, the sites that use toolbars and/or adware to receive commissions for sales they did not even produce - these hurt both affiliates and merchants. Check out the ParasiteWare Forum at http://forum.abestweb.com/forumdisplay.php?f=158
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