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  1. #1
    Newbie zibinet's Avatar
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    affiliate commission sharing
    Hello,

    I have thought of a concept: A social shopping website allowing people to submit a deal they know in return for a share of my affiliate commission should someone else purchase that deal.

    Thoughts? Comments? What would the merchant's think of it? Am I legally able to share my affiliate commission in such a manner?

    Thanks,
    Marek

  2. #2
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    Nothing new. Something similar called "cash back"
    You can look here: http://en.wikipedia.org/wiki/Cashback_website
    All merchants don't accept cash back sites and you have to tell the networks you're an incentive site.

  3. #3
    Newbie zibinet's Avatar
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    Quote Originally Posted by Zeus View Post
    Nothing new. Something similar called "cash back"
    You can look here: http://en.wikipedia.org/wiki/Cashback_website
    All merchants don't accept cash back sites and you have to tell the networks you're an incentive site.
    Not the same. The incentive would be offered to people submitting deals as opposed to those buying. If someone purchased the deal submitted by user X, user X would receive a share of the commission.

  4. #4
    The "other" left wing davidh's Avatar
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    It would still work the same way. Links would be encoded to attribute credit to a particular user/("contributor" in your case) that a share of commissions would be paid out to.
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  5. #5
    Newbie zibinet's Avatar
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    Quote Originally Posted by davidh View Post
    It would still work the same way. Links would be encoded to attribute credit to a particular user/("contributor" in your case) that a share of commissions would be paid out to.
    Would I still be seen as a cash-back website in the eyes of a merchant? And thus risk not being accepted? (I got the feeling from Zeus' reply that cash-back websites get less love from merchants)

  6. #6
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    Yes, you would still be considered an "incentive" site. Actually you would be a more of a subaffiliate network, which is a whole other animal entirely and is more restricted than an incentive site by merchants and networks.

    You would be paying "affiliates" for providing you with content via a subaffiliate ID.

    There are a large number of merchants that are leery of incentive sites and even more that don't allow subaffiliate type models like what you are considering.
    Deborah Carney
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  7. #7
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    Marek, your concept is a mix of two affiliate marketing models.
    By recruiting sub-affiliates, you're acting as a CPA network and by sharing your commissions with them, you're a cash-back site.
    Unfortunately, you don't add the advantages of each model, only the problems.
    In a CPA Network, Sub-Affiliates are responsible for their own business. In that case, you'll be responsible for the "deals", even if they are posted by others.
    A "cash-back" site shares the commissions only with the end users. Buyers knows what they bought. A buyer can help you get paid by the merchants and networks. The sub-affiliates can't.
    How are you going to handle reporting and accounting? Not an easy task.

  8. #8
    Newbie zibinet's Avatar
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    Quote Originally Posted by Zeus View Post
    Marek, your concept is a mix of two affiliate marketing models.
    By recruiting sub-affiliates, you're acting as a CPA network and by sharing your commissions with them, you're a cash-back site.
    Unfortunately, you don't add the advantages of each model, only the problems.
    In a CPA Network, Sub-Affiliates are responsible for their own business. In that case, you'll be responsible for the "deals", even if they are posted by others.
    A "cash-back" site shares the commissions only with the end users. Buyers knows what they bought. A buyer can help you get paid by the merchants and networks. The sub-affiliates can't.
    How are you going to handle reporting and accounting? Not an easy task.
    Well, the concept spanned from the following 2 thoughts:

    1. There are a lot of good online shoppers constantly finding great things to buy for good prices. - sub-affiliates
    2. There are a lot of shoppers who are not motivated to browse online or just don't know where to browse, even though they would love to find something great at a good price. - buyers

    So I thought of creating a network to bring the above 2 together and also add functionality allowing people to comment/review/flag each "deal" posted.

    Why do you see it as a problem if I am responsible for the "deals"? If I remain responsible for the deals I can eliminate the second problem you've described because I would be in control of paying out the sub-affiliates.

    Reports would be provided to sub-affiliates based on database records (amount of times their "deals" have been browsed/viewed, which "deal" categories fare the best, data on people who browse/view etc etc)

    Cookies would be dropped on buyers' systems to track purchases just as any normal affiliate seller site except it would contain data on the sub-affiliate (ID as loxly mentioned).

  9. #9
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    The problem is that a lot merchants won't approve a subaffiliate network. And a lot of merchants won't approve incentive or cash back affiliates.

    There are longstanding reasons that are too many to go into in one thread, suffice it to say that you are combining 2 business models that it will be difficult to get into networks and affiliate programs with.

    Of course you think it is a great idea, but you may need to rethink how you would monetize it. All the merchants that don't allow either or both type are not suddenly going to decide that your site is the exception. Just sayin'....
    Deborah Carney
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  10. #10
    More Cheesier Than Ever Cheesehead's Avatar
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    The contributor would have to be a member of the network before you could even think about splitting the commissions. Most shoppers (99+%) don't even realize affiliate marketing exists.

    There are, however, many deal sharing forums. Many shoppers are willing to share deals for no compensation other than benefiting from someone else sharing a deal. You might want to develop this model further.
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  11. #11
    Newbie zibinet's Avatar
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    Quote Originally Posted by loxly View Post
    The problem is that a lot merchants won't approve a subaffiliate network. And a lot of merchants won't approve incentive or cash back affiliates.

    There are longstanding reasons that are too many to go into in one thread, suffice it to say that you are combining 2 business models that it will be difficult to get into networks and affiliate programs with.

    Of course you think it is a great idea, but you may need to rethink how you would monetize it. All the merchants that don't allow either or both type are not suddenly going to decide that your site is the exception. Just sayin'....
    I don't necessarily think its a GREAT idea It's an idea. You are right, monetizing it is key and thus getting merchants on board. How does one normally go about that? If I fully develop a business plan could I just email them asking for cooperation?

  12. #12
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    Quote Originally Posted by loxly View Post
    The problem is that a lot merchants won't approve a subaffiliate network. And a lot of merchants won't approve incentive or cash back affiliates.

    There are longstanding reasons that are too many to go into in one thread, suffice it to say that you are combining 2 business models that it will be difficult to get into networks and affiliate programs with.

    Of course you think it is a great idea, but you may need to rethink how you would monetize it. All the merchants that don't allow either or both type are not suddenly going to decide that your site is the exception. Just sayin'....
    There's a flip side to that as well. Yes, many merchants don't work with incentive or cash back affiliates. And many do. I think FatWallet is doing just fine.

  13. #13
    Newbie zibinet's Avatar
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    Quote Originally Posted by Cheesehead View Post
    The contributor would have to be a member of the network before you could even think about splitting the commissions. Most shoppers (99+%) don't even realize affiliate marketing exists.
    Why would the contributor have to be a member of the network or even know about affiliate marketing? All they need to know is that if they submit content which gets purchased, I will split commission with them. Potentially they could also know beforehand how much commission can be obtained from which merchants.

  14. #14
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    Quote Originally Posted by Trust View Post
    There's a flip side to that as well. Yes, many merchants don't work with incentive or cash back affiliates. And many do. I think FatWallet is doing just fine.
    Of course, there are a lot if incentive sites that exist that do just fine, but they are also excluded from some merchants. There are several incentive sites that post regularly on ABW that run great cash back sites. However for a new site, especially with a dual model, it will be tougher to get into a lot of those merchant programs.
    Deborah Carney
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  15. #15
    Newbie zibinet's Avatar
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    Thanks everyone for your thoughts on this. I will be developing this concept further and focus on how I could monetize it.

    If anyone thinks it's a good idea and is interested in helping me with it please contact me via PM. I am a web-developer I would love to work with some marketing-savvy people.

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