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  1. #1
    Newbie GarthHudson's Avatar
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    When to send checks?
    Hello everybody!

    I thought I'd ask a question I haven't seen answered elsewhere on the forum.

    -I've noticed certain merchants choose different commission caps before sending out checks to affiliates. Some wait until you've earned $25 to send a check, while some wait until you've earned $100 in commissions before sending the monthly check (with amounts rolled over to next month if you haven't made it there yet, of course). Now, obviously this depends on the conversion rates and average affiliate success.

    For a company that is offering affiliates a 60-75% commission rate and sells a few products that range anywhere from $15 - $300, what sort of amount would be good to start with?

    Thanks!

  2. #2
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    If you set a low payment threshold, you'll send many small checks (and for many companies, overhead costs are $1 to $5 per check to authorize, approve, print, mail, and audit checks, including staff time to deal with payment inquiries and replace lost checks). Direct-deposit (or PayPal) can reduce these costs somewhat.

    If you set a high payment threshold, some publishers (affiliates) will be skeptical (worrying that they might never get paid for their efforts, if your conversion rate or average transaction size is lower than they expect).

    Some merchants reduce costs by promising payment less frequently (often quarterly), but of course this worries publishers with whom you yet built a strong trust relationship.

    Some merchants have a policy or practice of paying all publishers (affiliates) at least once a year, no matter what amount is owed.

    Some merchants also choose to pay affiliates "sooner than required," applying a lower threshold (or none at all) during the first few months of the relationship.

    Unfortunately, there are other factors, especially for non-US publishers who might be charged fees for depositing US checks or receiving US direct-deposits.

    Some merchants have different thresholds based on payment method: payments via direct deposit or PayPal might have a lower threshold, with payment by printed check assigned a high threshold.

    The cost of dealing with payment issues is one of the biggest factors leading many merchants to use an "affiliate network" instead of an in-house affiliate program
    (the affiliate network handles payment, so the advertiser [merchant] pays only one "vendor" and revenue from multiple advertisers are consolidated into a single payment to each publisher, usually monthly).

    For merchants who offer both in-house and network programs, the in-house payment threshold or frequency can be different than the network terms (often a higher threshold but a shorter payment cycle, sometimes biweekly or even weekly.)
    Last edited by markwelch; March 28th, 2011 at 05:06 PM.

  3. #3
    Newbie GarthHudson's Avatar
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    Thanks Mark! Very helpful reply. I appreciate it.

  4. #4
    ABW Ambassador JoyUnltd's Avatar
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    Uh...you're not "THE" Garth Hudson, just "a" Garth Hudson?
    Renée
    Pay no attention to that woman behind the curtain. -Wizardress of Oz

  5. #5
    Newbie GarthHudson's Avatar
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    Ha, nope, just a big fan of The Band. Glad to see someone still knows who he is!

  6. #6
    ABW Ambassador JoyUnltd's Avatar
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    Big fan here also. Just spent entire morning listening to The Band music! Much success to you!
    Renée
    Pay no attention to that woman behind the curtain. -Wizardress of Oz

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