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  1. #1
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    Thumbs down The Ever-Decreasing Commission Rate Downward Spiral
    It seems like it happens daily - the Ever-Decreasing Commission Rate Downward Spiral - as merchant after merchant lowers their commission rate.

    But PLEASE don't insult us with a load of crap:

    We have seen our program mature over the last decade, and therefore must take measures like this to maintain our competitiveness in the space.

    This change will allow us to keep providing savings opportunities to our/your customers and ensure that the affiliate program, and our partnership, continues to grow.
    "ensure that the affiliate program, and our partnership, continues to grow."? I think NOT.

    ANOTHER LS merchant that pays 20% has sent me an offer for their program on CJ at 8%. No word if their LS program is closing, making 8% their new standard.

    I use to think that the nexus tax issue could destroy affiliate marketing. Decreased commission rates is actually the more likely culprit. Combine the two - less merchant options forcing affiliates to promote merchants who pay lower commission rates - and our future is significantly threatened.
    Since June 10, 2012 a vegan aarf but still writing the Hound Dawg Sports Blog
    "If you don't have time to do it right, when will you have time to do it over?" -John Wooden;
    "Raj, there’s no place for truth on the internet." -Howard Wolowitz[/SIZE]


  2. #2
    OPM and Moderator Chuck Hamrick's Avatar
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    Moved this to the Midnight Cafe' so its not focused on any 1-2 networks. The trend I am seeing is two-fold. The attribution model is becoming widely accepted even though most merchants don't have a handle it. Instead they want to commission coupon/deal/shopping sites with a much lower commission rate as they still see them as closers on the sale. Since consumers are conditioned to expect a deal if you are not listed on those sites you may lose the sale to a competitor.

    I also feel blue chip programs are feeling the pinch and looking to squeeze commissions out of the affiliate channel for the sake of making their other channels look better. There has always been a jealousy toward affiliates who are real people rather than SEO, PPC, Social, Display, Email agencies. The affiliate channel is customer acquisition and once that customer is onboarded the merchant owns them. So you need the affiliates to keep beating the bush to find you more eCommerce customers but you don't need to partner with them and build long term relationships, or so they think!

    This is all cyclical and you will see these merchants come back asking you to increase promotion later. Best thing to do is Truth is that bigger merchants convert better so there is no 1-1 changeout as AffiliateHound has seen with the CA nexus. I would have more respect if big merchants just dropped their affiliate program outright and focused on the other channels rather than screw with affiliates. Either that or do their job and develop the relationships.


  3. #3
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    Well, got another one today, and while it is not a major merchant for me, the level of the decrease is immense, and I feel the merchant must be called out for it: Adagio Teas (on CJ). Their default commission rate was 10%, with sales volume increases that could raise the rate to 15%.

    Their new rate is 5%, with no incentives.

    And, the cookie duration is lowered from 45 days to 15 days.

    Their affiliates should leave in droves.
    Since June 10, 2012 a vegan aarf but still writing the Hound Dawg Sports Blog
    "If you don't have time to do it right, when will you have time to do it over?" -John Wooden;
    "Raj, there’s no place for truth on the internet." -Howard Wolowitz[/SIZE]

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  5. #4
    Beachy Bill's Avatar
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    Wow - a huge cut in "pay" for anyone who did well with them. We've been looking a bit more seriously into the "foodie" vertical but am sort of glad we haven't started much yet.
    Bill / Marketing Blog @ 12PM - Current project: Resurrecting my "baby" at South Baltimore..
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  6. #5
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    They did not even bother to send out a lame excuse like the merchant in my op - they just put the change in a "Pending Offer".
    Since June 10, 2012 a vegan aarf but still writing the Hound Dawg Sports Blog
    "If you don't have time to do it right, when will you have time to do it over?" -John Wooden;
    "Raj, there’s no place for truth on the internet." -Howard Wolowitz[/SIZE]

  7. #6
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    NOTE: I cannot believe there is not MUCH more interest in this. I will keep posting about these merchants and their subtle, and not-so-subtle, rip-offs.

    Another merchant who last week made major changes to their commission structure is Stacks and Stacks (CJ). Again, there was no email, only a posting of a "new offer to accept".

    The prior rate was 6% across the board (About a year and a half ago that was reduced from 8%). This is their new structure:

    Commission 4.00%
    0.25% on Item List: No Margin Items
    2.00% on Item List: List A
    5.00% on Item List: List B
    6.50% on Item List: List C
    8.00% on Item List: List D
    I really, really detest this type of structure. Those LISTS each contain thousands of products. Who has the time or motivation to go through them to see what is what? (The lists have only 50 items per page.)
    Since June 10, 2012 a vegan aarf but still writing the Hound Dawg Sports Blog
    "If you don't have time to do it right, when will you have time to do it over?" -John Wooden;
    "Raj, there’s no place for truth on the internet." -Howard Wolowitz[/SIZE]

  8. #7
    ...and a Pirate's heart. Convergence's Avatar
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    Quote Originally Posted by AffiliateHound View Post
    NOTE: I cannot believe there is not MUCH more interest in this.
    A.H., feel it too. The commission decreases come in waves. Some days just seems to take the wind out of your sails.

    Merchants where we feel we've done a good job with, we email.

    Merchants where we have busted our butts and tried for them, we email.

    Merchants we haven't done a good job with, find it hard to b*tch about it.

    Mechants we consider "filler" merchants, again - find it hard to b*tch about it.

    However, none of the merchant where we have custom commission rates have lowered them on us [fingers crossed]...

    We look at each one - think we're killing more and more off. No emails to them, just "decline" the offer and immediately "expire", like Adagio Teas...
    Salty kisses, Sandy toes, and a Pirate's heart...

  9. #8
    ...and a Pirate's heart. Convergence's Avatar
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    Take Zappos for instance -

    Their last round of term changes is far from affiliate friendly. It's one-sided.

    I will be contacting them next week to voice my concerns and to offer them alternative terms.

    They can improve on their single occurrence, or not. Not changing it forces us to drop them. Their reversal rate has went from about 45% last year to nearly 75% since their term change.

    This is "performance marketing" - our job is send them traffic and get paid for that traffic. THEIR liberal return policy combined with the single occurrence is a killer for affiliates.

    New Customers: Goes from our site to their site. Buys and returns. Affiliate is out of the loop when the customer comes back to reorder the correct size/style they need/want. Zappos gets a new customer. We get nothing.

    Return Customers: If the customer is so loyal to Zappos, why are they on my site going to Zappos? Why didn't Zappos entice them with emails, etc. so the customer goes straight to Zappos?

    Again, if they don't change their terms, we will offer them a paid inclusion. They can pay us by number of products, PPC Advertising, or by number of ad exposures - or all of the above.

    Either way, if they're going to be on our site - we're getting paid for that exposure, brand recognition, and traffic...
    Salty kisses, Sandy toes, and a Pirate's heart...


  10. #9
    ...and a Pirate's heart. Convergence's Avatar
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    I have no problem with dropping them. We're only earning 10% of what we were earning with them a year ago with the same amount of traffic. You can add 6PM to the mix as well...
    Salty kisses, Sandy toes, and a Pirate's heart...

  11. #10
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    I was looking at the 6pm TOS a few days ago and it reminded me of Sheldon Cooper's Roommate Agreement, except longer and more restrictive.
    Since June 10, 2012 a vegan aarf but still writing the Hound Dawg Sports Blog
    "If you don't have time to do it right, when will you have time to do it over?" -John Wooden;
    "Raj, there’s no place for truth on the internet." -Howard Wolowitz[/SIZE]

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  13. #11
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    Quote Originally Posted by AffiliateHound View Post
    NOTE: I cannot believe there is not MUCH more interest in this. I will keep posting about these merchants and their subtle, and not-so-subtle, rip-offs.

    Another merchant who last week made major changes to their commission structure is Stacks and Stacks (CJ). Again, there was no email, only a posting of a "new offer to accept".

    The prior rate was 6% across the board (About a year and a half ago that was reduced from 8%). This is their new structure:



    I really, really detest this type of structure. Those LISTS each contain thousands of products. Who has the time or motivation to go through them to see what is what? (The lists have only 50 items per page.)

    When a company change their commission from 8% or 10% to 1%, I usually gets two ideas, one they don't have a mature affiliate program manager, and second they don't worth promoting ( I don't have time to play with their testing program, when i joined they promised a commission that i was willing to work with and it is no longer the case ) even if they bring the commission higher later, they already lost their credibility with me.

    Stacks and Stacks did piss me off, and my respond to them was Sorry, I no longer interested in promoting your program. So, I went ahead and declined their funny offer.

    I own a cash back website, when an affiliate manager load the affiliate program with load of none sense, he simply asking me to take my business else where.

    Stacks and Stacks first level of structure offering : 0.25% on 6074 item !!!! Seriously, should i offer my users pennys ? keeping their store reflect negatively on my website (the site claim to offer rebate and giving user 0.05 cash back, why bother lets go find coupons).

    I recall when NewEgg program they offering 0.5% to 1% and half of their major products has no commission, why bother and keep the affiliate program in the first place ?

    I hate structure commission, it is not practical for rebate sites, and I appreciate affiliate program managers for programs like Staples where they understand that and try to offer one flat rate commission for this type of stores.

    Customers don't appreciate too many restrictions, and neither do I.

    If a company can't afford paying a channel marketing, they better off shutting that channel off and move on.

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  15. #12
    ...and a Pirate's heart. Convergence's Avatar
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    Quote Originally Posted by AffiliateHound View Post
    I was looking at the 6pm TOS a few days ago and it reminded me of Sheldon Cooper's Roommate Agreement, except longer and more restrictive.
    LOL - and less realistic...
    Salty kisses, Sandy toes, and a Pirate's heart...

  16. #13
    ...and a Pirate's heart. Convergence's Avatar
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    Quote Originally Posted by OneGoodMan View Post

    Stacks and Stacks did piss me off, and my respond to them was Sorry, I no longer interested in promoting your program. So, I went ahead and declined their funny offer.

    Stacks and Stacks first level of structure offering : 0.25% on 6074 item !!!!
    Just declined their offer and expired our relationship.

    You may notice a trend with specific merchants and who is managing their programs. Seems sometimes there is some revenue sharing going on - and the OPM is taking a direct cut out of our earnings...
    Salty kisses, Sandy toes, and a Pirate's heart...

  17. #14
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    I think one reason you don't see much response to the ever decreasing commission rate is that there isn't much an individual affiliate can really do about it. I've found emails are generally ignored by most merchants, especially those with programs at the big networks.

    Instead, I just find it useful to "move on" and find someone else to promote while "downgrading" or outright removing the newly lowered affiliate program from my site(s).

  18. #15
    OPM and Moderator Chuck Hamrick's Avatar
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    I expect after Q4 we will see articles about how the eTailers who offered many discounts and coupon codes did very well in sales. Already seeing references to summer Black Friday deals. I expect there will be a rush in October for per-BF deals trying to get early sales. Affiliates have to decide if offering their space for a 1% commission is worth their time. I suspect that couponers will accept this as they would want to have every brand on their site but they will instead feature other brands more. Big brands may have figured it out that they get the coupon sales anyway and pay little for them.

  19. #16
    ...and a Pirate's heart. Convergence's Avatar
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    Quote Originally Posted by Chuck Hamrick View Post
    Affiliates have to decide if offering their space for a 1% commission is worth their time.
    Won't go to bed with them for 1%...
    Salty kisses, Sandy toes, and a Pirate's heart...

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  21. #17
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    The Wine Enthusiast
    They were a pretty good performing merchant for me until the first round of California's nexus tax. When the tax was imposed in July 2011, they fired CA affiliates, but unlike the majority of merchants, when the tax was then delayed for a year, they did NOT reinstate CA affiliates, so my last contact with them had been two years ago.

    Back then, their default CJ commission was 6%. I did have a higher private deal with them, and my personal dealings were always cordial and responsive.

    The also had a GAN program, also at 6%.

    [Bear in mind they have not accepted CA affiliates since July, 2011 and that I was removed from both programs in 2011) TODAY i received a solicitation email telling me that their GAN program is now closed, but that their CJ program is open to former GAN affiliates, and that the CJ program offers commissions at the rate of ...........wait for it.....

    3%!

    So, I don't know when they did it, but their commission rate has been cut in half!
    Last edited by I.M.O.G.; August 5th, 2013 at 11:21 PM.
    Since June 10, 2012 a vegan aarf but still writing the Hound Dawg Sports Blog
    "If you don't have time to do it right, when will you have time to do it over?" -John Wooden;
    "Raj, there’s no place for truth on the internet." -Howard Wolowitz[/SIZE]

  22. #18
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    Above post refers to the Wine Enthusiast.

    I did put the name in the "Title" box but I don't seeing it show up in the post. Strange.
    Since June 10, 2012 a vegan aarf but still writing the Hound Dawg Sports Blog
    "If you don't have time to do it right, when will you have time to do it over?" -John Wooden;
    "Raj, there’s no place for truth on the internet." -Howard Wolowitz[/SIZE]

  23. #19
    OPM and Moderator Chuck Hamrick's Avatar
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    I did put the name in the "Title" box but I don't seeing it show up in the post. Strange.
    Ya, I see it when I try to edit the post. Added it to the tags.

  24. #20
    ...and a Pirate's heart. Convergence's Avatar
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    Quote Originally Posted by AffiliateHound View Post

    I did put the name in the "Title" box but I don't seeing it show up in the post. Strange.
    Seen that happen a few times - sometimes it shows up, sometimes not...
    Salty kisses, Sandy toes, and a Pirate's heart...

  25. #21
    ABW Ambassador I.M.O.G.'s Avatar
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    this post has a title
    I assure you, this post has a title.

    Edit: for some reason post titles aren't displayed on the full site at all, but show up when the post is edited, or when viewing the mobile theme. I can fix it tomorrow morning, thanks for bringing note to it.
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  26. #22
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    I'm sorry to say but it will get worse. If you made money in affiliate marketing over the years I would advise to start investing it in real world things like real estate or even the sharemarket.

    The sad thing is the best merchants will probably be the least informed ones, ones that don't have nosey affiliate managers hanging out on forums and copying joe blogs lower commission idea ;0
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  27. #23
    ABW Ambassador I.M.O.G.'s Avatar
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    Quote Originally Posted by I.M.O.G. View Post
    I assure you, this post has a title.

    Edit: for some reason post titles aren't displayed on the full site at all, but show up when the post is edited, or when viewing the mobile theme. I can fix it tomorrow morning, thanks for bringing note to it.
    This is fixed
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  28. #24
    Member Prosperent's Avatar
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    Guess, G by Guess, and Marciano just cut their commission rates from 8% to 4%. We just started offering their feeds, so they will probably get buried deep down in the abyss of our algorithm. Too bad because they had potential. Time to contact their AM and explain why it is an idiotic move.


  29. #25
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    Wink Brings Back Fond Memories of Sales Managers
    Reading all these posts simply reminds me of all the Sales Managers I worked for either in telemarketing, inside sales or outside sales ... they chew you up, spit you out and if you don't like it ... adios ... then they cherry-pick your funnel while hiring somebody else who's "hungry"!

    It's 1 of the reasons I got into this business -- to have a bunch of "sales managers" so I can blow *them* off when I want to. It's also why my programs are "recommendations" by me based on my own use ... I want people to rely on me to help them understand what they're buying -- and also where I can get a residual where I can.

    1 major thing I've learned is the "big boys" seem to get too big for their britches and smaller hungrier companies wind up running rings around them -- I run with them and laugh last while the "big boys" sink.

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