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  1. #1
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    I recently launched and affiliate program and one of my policies, clearly disclosed on my affiliate FAQ page and in my affiliate agreement, is that affiliates are not entitled to earn commissions on their own purchases i.e. purchase of product for affiliate's own use via his own affiliate link.

    My intention in doing this is to try to protect my affiliates, so that they are rewarded for sales they refer. Otherwise, anyone could become an affiliate just to get a "discount" (an affiliate commission) on their own purchase even though they have no intention of referring others. To me, this would clearly "cheat" the referring affiliate who deserves the commission.

    I've seen many affiliate programs that have a similar policy. I've also seen affiliate programs that don't make this a policy, and in fact, I've seen a couple that even encourage prospective customers to become an affiliate first and get a commission on their own purchase, even if they never so much as post a single link to their site.

    So, the question is, am I right to have such a policy? Or should I allow affiliates to refer themselves and get the commission?

    I realize this kind of policy is difficult to enforce for many reasons, and that in practice it will not be a common scenario for me (or so I believe - time will tell). But there's one fairly common scenario in particular I'm not sure how to best handle:

    Someone signs up as an affiliate, tests his affiliate link (thereby setting a cookie containing his own affiliate ID in his browser), and then buys the product for himself. He genuinely became an affiliate to promote the program and was not intending to generate his own commission, BUT, his cookie containing his affiliate ID was already set in his browser, and he's a novice and doesn't know how to delete his own cookie (nor should he have to know how, in my opinion).

    To be consistent with my "no self-commissions" policy, I feel I should reverse his commission to himself. Hopefully he will apreciate that I am doing this to protect all my affiliates, but I'm concerned this might not go over well with him as he is just getting started and will see a reversed commission right off the hop.

    Any thoughts on this whole issue of self-commissions for affiliates?

  2. #2
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    Hi Snoopster;

    I'll be interested to see how people respond to this.

    Personally, I do not like that policy. I think its extremely unfriendly to me as a business partner. I like to shop from my merchants, and when I do, I should not be penalized for doing so.

    The flip side, as you say, is that you might be Protecting me from lost sales. But I'd rather take that chance.

    Also, if you are tracking your sales enough to know that someone is buying through his own links, then you would also be able to get a feel for whether that person was, indeed only in the program for personal discounts. In that case, go ahead and drop him.

    If I'm promoting you in good faith, and then buy from you, I don't see the argument behind reversing my sale. You have other ways to "protect me" then by taking my money away. Doing that might even effect whether I buy from you any more or continue to promote you.

    Anyway, those are my thoughts;

    [img]/infopop/emoticons/icon_smile.gif[/img]

    - Ed

  3. #3
    ABW Ambassador flamingoworld's Avatar
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    Even Walmart gives their employees 10% off their purchases.

    Connie Berg
    www.flamingoworld.com


  4. #4
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    "Even Walmart gives their employees 10% off their purchases."
    ---------------
    But the discount Walmart employees receive is not at the expense of other Walmart employees.

    Back to the real scenario -- As the merchant, my pocketbook is the same either way. It's just a matter of which affiliate gets the commission... the true referrer or the discount shopper.

    If you were an affiliate of XYZ program and I came to XYZ's site via your affiliate link, then signed up as an affiliate just to get a rebate on my purchase - at your expense as the legitimate referrer, how would you feel? How would you feel if everyone did this?

    Of course, the degree to which this will happen in reality will vary from program to program. But what is truly most fair for affiliates in not so clear cut to me. I really want to do whatever is most fair for my affiliates.

  5. #5
    ABW Ambassador ShoreMark's Avatar
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    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>But what is truly most fair for affiliates in not so clear cut to me. I really want to do whatever is most fair for my affiliates.<HR></BLOCKQUOTE>

    Well, I figure you've set your prices to make your reasonable profit after your normal operating costs which include the affiliate commission, so it shouldn't be all that big a deal to just pay it. I believe that many of the larger malls have a standard employee discount honored across merchants to encourage the employee of store "a" to buy from store "b" inside the mall vs. store "c" across the street. An affiliate would be less likely to go shopping around for say a 15% discounted special deal somewhere if he already had a 10% effective discount via one of his own merchants.

    However, it would seem reasonable to keep track and during a semi-annual review of all of your sources of sales and traffic if you come across an affiliate that made that first purchase and sent zero additional traffic (he can't guarantee the sale, but no traffic would indicate no good faith effort to promote you), then it would be time to consider dropping that affiliate - although the cost of carrying an affiliate shouldn't be much and finally, odds of any one affiliate buying a ton of stuff just for his own use is probably pretty small and his single initial purchase may (if you're independent or somewhere besides CJ) sit in your account for a long, long time to meet a minimum payout level.

  6. #6
    ABW Ambassador flamingoworld's Avatar
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    For those who are signing up with the affiliate program just to get the commission, there is the matter of the minimum payout. They may have to buy a lot to actually get the money back.

    Plus, this is one of the reasons I actually started my site years ago. If this had not been allowed, look at all the merchants right now that would not have me as an affiliate making money for them. Merchants could actually gain great affiliates this way.

    I have never heard of this being a problem, where affiliates are complaining people are signing up for the affiliate programs themselves instead of using the site's links.

    If I don't get credit from my affiliate links, why would I want to buy from that merchant? I try to do most of my shopping online, bringing lots of sales to the merchants. I would just take my shopping offline, or to another merchant. Stores could lose a lot of money. The first time a merchant reverses a sale I made from my own link woud be the day I took those links off my site.

    Many times I buy for relatives too nervous to buy for themselves online, or who don't have computers. Why would I do that if I won't get commission?

    I don't think this is a real problem, I doubt enough people would come to my site, and go through the trouble of signing up for the affiliate program, putting up a site and such just to save a little money. They already save money coming to my site anyways. And if they do, great! The merchant now has a new affiliate that may go on to make great sales. (like I did) The affiliate then should get bonus for recruiting the new affiliate.

    Connie Berg
    www.flamingoworld.com


  7. #7
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    Good point Connie. There seems to be a consensus building on this issue. As I have just launched my affiliate program, I guess I imagined that this might be more of a problem than it actually is.

    It's not a problem with me as long as it's not a problem with my affiliates, which was my initial concern.

    By the way, how do you suggest I handle commissions owing to affiliates that sit there for a year and don't meet the minimum $50.00 payout?... Pay them their $7.49 after a year (or some other time period)? Void the commission owing if they don't meet minimum after 1 year?

    I don't want some affiliates small commissions sitting there owing forever.

  8. #8
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    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by Snoopster:

    If you were an affiliate of XYZ program and I came to XYZ's site via your affiliate link, then signed up as an affiliate just to get a rebate on my purchase - at your expense as the legitimate referrer, how would you feel? How would you feel if everyone did this?
    <HR></BLOCKQUOTE>

    You're right. That scenario is a problem. But like I said, there are other ways of addressing that without taking money away from valid business partners.

    And if that's happening a lot, there's a problem with your affiliate recruitment process.

    Also, I think you said the cost is the same to you either way ... but you actually end up saving yourself money by doing the reversals, don't you? I mean after you've decided that the person buying for himself shouldn't get the commission, are you really able to turn around and give that commission to someone else?

    - Ed

  9. #9
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    Snoopster,
    I think it depends upon the product your selling.
    If your selling a one time product or service then I think you should try to dissuade people from joining just for a discount. On the other hand, if your selling ‘books’ I would think you would want to give your affiliates that discount.

    As an example, there's a CJ merchant who offers an excellent product for webmasters. I joined through my own link (because that's how I found them in the first place) and ran their ad on my site. When the commission was reversed I questioned and they said something like ‘It’s not coupon’. I said that’s fine, I wasn’t really expecting it anyway, and asked ‘Why don’t you just make that statement on your affiliate page then you won’t have people try’. To which I received no response.
    But, it got me to think that I really didn’t have much of a chance to sell their product and I immediately pulled all their ads from my site, not because they didn’t give me the commission, but because by not making a statement they in effect encouraged webmasters to try for a ‘coupon’.
    (I have to add that this merchant promotes their affiliate program heavily on their site)

    So, I guess you have to weigh whether making that statement will hurt your sales or by not making it you are discouraging affiliates from running your ads.
    I think it really depends on your product.

    Regards,
    Richard

    Richard White
    AffiliateFirst Directory
    AffiliateFirst Submission Services

    [This message was edited by AffiliateFirst on November 23, 2002 at 06:37 PM.]

  10. #10
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    Abagoo - I can easily take away commissions from one affiliate and add it to another - software makes this easy to do. But you're right - that would be a pain for me, and more importantly,I'm starting to see how doing so would do more damage then good in terms of my affiliate relationships.

    It really comes down to the lesser of evils, and I'm seeing that the least evil is allowing the "fake" affiliate to get his commission.

    But there 's still the question of how to handle the minimum payout issue - see my previous post above.

  11. #11
    Super Sh!t Stirrer SSanf's Avatar
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    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR> The first time a merchant reverses a sale I made from my own link woud be the day I took those links off my site.
    <HR></BLOCKQUOTE>

    Me too!

    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR> how do you suggest I handle commissions owing to affiliates that sit there for a year and don't meet the minimum $50.00 payout?... Pay them their $7.49 after a year (or some other time period)? <HR></BLOCKQUOTE>

    Yep! That would show integrity and trusyworthyness.

    The Wolf Credo: Respect the elders. Teach the young. Cooperate with the pack. Play when you can. Hunt when you must. Rest in between. Share your affections. Voice your feelings. Leave your mark.

  12. #12
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    My 2-cents.

    Reasons I purchase through my merchant partners:

    1) Verify Tracking.
    2) Check Merchant ordering system. If it is easy to use, it may end up with better exposure simply because my experience was a positive one. This also includes the order fulfillment and speed of delivery.
    3) Verify good customer service. If I have an issue with this merchant others do as well. Merchants with poor customer service, will be dropped.
    4) The discount.

    The items are in order. As you can see, the discount is the last item in the list. I want to know the experience my users are going through. If it is not a positive one, others may feel the same.

    From the other perspective, (as I have sat in the merchants shoes as well) it was always nice to have another newsletter list that I could send out to promote. I liked to know that I had 3,000 potential customers that were also my partners.

    IamJaloppy

  13. #13
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    Thanks IamJaloppy - all excellent points that I had not fully considered.

  14. #14
    ABW Veteran Student Heyder's Avatar
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    Any good salesperson (affiliate) knows, buys and uses the products they sell. I would do anything to encourage them to own what they are selling.

  15. #15
    ABW Veteran jc101's Avatar
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    I think It should be okay to buy products though your own affiliate link. as I want to make sure that the products come in good condition, and have good customer service. I buy my food from my affiliate links online sometimes too. Besides wouldn't you rather have a affiliate that bought your products and can say good comments about the products to other consumers? I would think so. I am going to test my merchants by buying food and products from then soon.

    Jason

    Santa Cruz, CA 95060

  16. #16
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    They should be allowed to buy through their own link .

    They are in my program, and you know what? A sale is a sale! Unless you find yourself in a position to get picky about whos $ you take.

    It is just best practice to avoid silly rules.

    Lizabeth Cole
    Affiliate Marketing Manger
    GiveAnything.com Gift Certificates
    518-426-0909
    liz@giveanything.com

  17. #17
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    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>
    By the way, how do you suggest I handle commissions owing to affiliates that sit there for a year and don't meet the minimum $50.00 payout?... Pay them their $7.49 after a year (or some other time period)? Void the commission owing if they don't meet minimum after 1 year?

    I don't want some affiliates small commissions sitting there owing forever.<HR></BLOCKQUOTE>

    I think you should either keep it sitting out there, or go ahead and pay it.

    Or offer to send them a gift certificate for the amount (or even round it up to the nearest $5 or $10). That way:
    1) they remember you in a positive way,
    2) hopefully they go ahead and buy something from you,
    3) maybe it inspires them to promote your store more aggressively.

    - Ed

  18. #18
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    As an affiliate I personally hate when a merchant says you may not purchase through your own links. This is yet another case of the bad ruining it for the good, I guess. However, the few that would actually
    -know what exactly an affiliate program is
    -bother registering just to get the measly X% on that one sale
    -actually be able to meet the minimum payment amount (another reason I prefer $50-100 min. payout)

    is I -think- minimal. Then again, thats just an ASSuMption, and I have no facts to back it up.

    I do agree on a 1 off product, especially something targeted to affiliates or webmasters, it makes sense. On shoes or books or dvd's ... not so sure.

    --
    ...only in the affiliates interest...
    The Newer Nicer Joseph [img]/infopop/emoticons/icon_smile.gif[/img]

  19. #19
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    I'll jump in to this one as a merchant. AS Liz said...a sale is a sale..you can look at it at x% for a referred sale or x% for a personal order..either way I am paying out x%. I do have a few affiliates who purchase on a regular basis..for holiday..then birthdays, etc. so their continued support of our business is appreciated..with our without the discount/commission.

    And like Connie said..though you are not a "physical" employee of the company..you are part of our "team" and deserve an employee discount now and then!

    Patty Altaffer
    Affiliate Manager
    AKA Gourmet(www.akagourmet.com)
    patty@akagourmet.com

  20. #20
    ABW Veteran jc101's Avatar
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    That's great to hear that patty@akagourmet! I have been thinking of buying stuff from your site. for a while, I like what you offer. It's great when a big merchant actually participates to communicate with other affiliates. Now perhaps we can get walmart and target and some of the others to participate here at abestweb? I'm challenging them to defend there affiliate programs at linkshare :0) . LOL.

    Jason

    Santa Cruz, CA 95060

  21. #21
    Affiliate Marketing Consultant Andy Rodriguez's Avatar
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    For the record:

    I have no problem in extending the % off to my affilaite partners. Many of our partners do already, the difference is that i monitor it.

    If someone is selling 10K per month for Tiger, i'd be crazy to not allow them to purchase a 2K notebook for themselves..

    however, i get e-mails that say: "I purchased xyz and it didn't show up on my reports" that is a flag, I say "newbie used link to purchase for themselves" and i check the tranaction history, 98% of the time, it will be their first sale, they don't have the link coded propoerly etc. They don't realize that orders won't show until they are shipped !

    I don't have a problem with it as long as it's not abused.

    *** To all our partners, we have some nice notebooks and LCD monitors in stock...use your % discount [img]/infopop/emoticons/icon_razz.gif[/img]

    Andy Rodriguez,
    Online Advertising / Affiliate Marketing Manager

    TigerDirect.com
    P: (305) 415-2313
    E: andy.rodriguez@tigerdirect.com
    ICQ: 175010
    AIM: miamitigercub

  22. #22
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    Everyone in this string,

    Being new to the affiliate game, I initially imagined (wrongly so) that allowing affiliates a discount on their own purchases might pose a significant problem to the affiliates that reffered them. Based on all the feedback generated from this string, however, it is now apparent to me that you are all quite correct in that it's really a non-issue (but would be a big issue if I didn't allow affiliates to purchase via their own link).

    I just recently discovered ABW and this was my first post here. I really didn't know what to expect in the way of responses to my question, but I must say I am thoroughly impressed! I have learned a lot fast through everyone's participation in this discussion as well as through other areas of this forum.

    I would just like to thank everyone for sharing their valuable insights -- it's been quite an education already. I hope I can offer all of you some valuable input myself soon. You all seem like a fine, smart, genuine bunch of people. This forum is really like no other that I have seen. I'm starting to get the feeling ABW attracts the best people and brings out their best.

    I look forward to getting to know you all better via this forum.

    Haiko, if you're there, thanks for creating such an awesome forum. First class all the way!

    [img]/infopop/emoticons/icon_smile.gif[/img] [img]/infopop/emoticons/icon_cool.gif[/img] [img]/infopop/emoticons/icon_wink.gif[/img]

  23. #23
    Domain Addict / Formerly known as elbowcreek Thomas A. Rice's Avatar
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    Snoopster- One of the primary reasons I will, from time to time, purchase via my own links is to see if the sale actually comes up. Just a way of making sure the different merchants are recording sales appropriately, lol. Saving a couple bucks on a purchase or two will not affect my affiliate career long term: finding out if a merchant is tracking will, though.

    I Will FOCUS On My Goal

  24. #24
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    I just wanted to say thanks for this topic and the replies!

    I will definitely make sure my affiliate program members can make purchases from their own link now (I may even encourage it).

    That's a good point about being about to sell the product better by actually going through the order process and seeing it first hand.

    --
    Rodney

  25. #25
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    One of the reasons that I do not heavily promote a certain RAM compnay is that they think it's crucial not to pay affiliates for purchases through their own links. Instead, I buy RAM through another company, denying company A the sale.

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