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  1. #1
    Moderator leeann's Avatar
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    So I get a note from Coldwater Creek that they are going to discontinue our affilation because..get this.. my customers that shop there are putting a strain on their profit margin because they are purchasing low margin products. Uhm? Gee? If I was a retailer and I didn't want people to purchase my low end junk than I think I wouldn't put it online.
    Besides, looking back, it looks like to me the average item purchased is about $30.00. I guess that isn't great but it's not like we are talking the dollar store here.

    Anyway, I'm irked.. but.. I did sign up with Liz Claiborne so maybe the two will balance things out.

    End of Vent,
    leeann
    leeann


    Shoppers determine what has value and they like coupons. Stop manipulating who set the cookie just because you do not like coupon and promotional sites.

  2. #2
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    Where did Trust's post go?

  3. #3
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    I accidently deleted it during an attempted edit*

    Basically i got the same notice. And i told them i send traffic, get sales, convert at 4% and can't control what my visitors buy. I've never had a merchant send me an email saying that i am costing them money when i send them converting traffic. They won't have that problem after today. To me it's never a good sign when a merchant has one of these that was talked about months ago:

    http://www.coldwatercreek.com/market...home.asp?lhp=4

    Also if they're worried about their bottom line they could drop some of their affiliations where they pay commissions on what otherwise would be free traffic.


    *mind was wandering trying to decide Papa John's or Nicks Pizza

  4. #4
    ABW Ambassador Andy's Avatar
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    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR> So I get a note from Coldwater Creek that they are going to discontinue our affilation because..get this.. my customers that shop there are putting a strain on their profit margin because they are purchasing low margin products. <HR></BLOCKQUOTE>

    Bad leeann, bad, bad, bad. How dare you send cheap customers to Coldwater Creek! You should know better than that!

    You should have put a message on your pages telling everyone to spend at LEAST $100 or else! Let them know that Coldwater Creek doesn't value them unless they spend the big bucks.

    Geesh...it's always the affiliate's fault, isn't it? Promote their competition and tell them to stuff it, this is about as lame an excuse as I've ever heard. I think you have good reason to vent, this silly excuse really makes me wonder what genius thought it up.

    Andy

  5. #5
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    Does seem rediculous to rant at an affiliate for using showcase displays featuring lower priced ClearWater Creek items. Why even have the displays show these items if the parent catalog company isn't begging for more catalog customers via the cheap affiliate traffic route.

    Now I can see someone owning Overstock shares coming down on their affiliate DRM merchandizers screaming on pushing DOLLAR STORE closeouts. This leaves 95% of their monthly total dollar volume sales items with no affiliate pre-sell exposure. Sick to think Overstock Watches and jewelry are just dime store items and K-Mark blue light specials.

    ALL catalog merchants like CWC only have a direct marketing ebiz plan. Sell the existing customer via direct mail -e-mail and catalogs. AQffiliate payouts (minus the BHP parasites) is a minor expense for this merchants and they should kiss butt for acquiring a new account on a 30.00 sale paying affiliate 2.00 per valid lead and full customer privacy information...
    Webmaster's... Mike and Charlie

    "What have you done today to put real value into a referral click...from a shoppers viewpoint!"

  6. #6
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    At the risk of poking my nose in here where it doesn't belong...

    I'm not defending Coldwater Creek's business decision here, as I have zero insight into their goals in terms of sales, margin and AOV. However, it sounds to me like it is simply a business decision that you guys are going to have to live with. You may not have control over what kind of customer you send to their site (or maybe you do...I have no idea), but they certainly have control over how they spend their marketing dollars.

    Pretend for a moment that you were running the business for a merchant program, and you were posed with the following problem:

    * You have a cap of $40K to spend each month on your marketing programs, including affiliate, search, email, and shopping portals. Let's say you allocate $10K evenly across those programs just to make the math easy.

    * Assume that each of those intitiaves generates $100K in sales each month, but the margins are considerably different:

    Search: 45%
    Affiliate: 32%
    Email: 48%
    Shopping: 46%

    Now, the math here is pretty simple, and if you have influence on HOW you spend your marketing dollars, the smart businessperson may consider spending less on programs that generate lower margin sales, and diverting them to programs that are simply more profitable.

    I'm not saying that this is what Coldwater Creek has done here, but I can tell you that most retailers of that size probably have margin thresholds, and they have to decide whether they want "Walmart" sales or "Ann Taylor" margins. You can't have both, and it looks like they think you are falling below their comfort level, unfortunately.

  7. #7
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    Finishline has some grasp of retailer operations. CWC can easily raise the "affiliate -32%" figure by eliminating their incent affiliates. Just cut off the coupon SE trademark/brand spammers and the "incnet" double dipping BHO traffic/sales hijackers. This move will automatically increase the margins in all the other advertising ROI categories too, while lowering cart abandonment.
    Webmaster's... Mike and Charlie

    "What have you done today to put real value into a referral click...from a shoppers viewpoint!"

  8. #8
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    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by EcomCity.com:
    CWC can easily raise the "affiliate -32%" figure by eliminating their incent affiliates. Just cut off the coupon SE trademark/brand spammers and the "incnet" double dipping BHO traffic/sales hijackers. This move will automatically increase the margins in all the other advertising ROI categories too, while lowering cart abandonment. <HR></BLOCKQUOTE>

    No question that the overall margins in any merchant's affiliate program can improve by being more "selective" in who you allow in the program to begin with.

    I just didn't care to go that down path, since it would presume that I know what kind of affiliates are in their program to begin with. Which I don't...

  9. #9
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    While the Finishline post makes sense, I do think that there is more to consider here.
    If Coldwater Creek remove affiliates, those affiliates are going to promote a different merchant, obviously.

    Coldwater Creek could quite easily lose more in terms of revenue lost to their competitors than they would save by terminating their affiliate relationships.

  10. #10
    ABW Founder Haiko de Poel, Jr.'s Avatar
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    This makes NO sense! Your doing your job, sending the traffic that converts, they are selling and they want to terminate you because ... what your selling is low margin items? WTF? Online is obviously less expensive that traditional channels! The problem isn't in your affiliation, but the management of the program.
    Continued Success,

    Haiko
    The secret of success is constancy of purpose ~ Disraeli

  11. #11
    Newbie Affiliate Ian's Avatar
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    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by EcomCity.com:
    ... while lowering cart abandonment. <HR></BLOCKQUOTE>
    Hey Mike, you think coupons = increase rate of cart abandonment? Because the user will leave to find a coupon right? Interesting.

    Haiko is right. Unfortunately, it sounds like they have set their average commission payout % slightly higher than they would have liked. At least, that is hwo I read this.

  12. #12
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    My thoughts are this...

    I don't know about Leann but I know "trust no one" runs a coupon type site and it's not hard to see that coupon sites often promote the term discount, coupons, clearance and cheap heavily.
    http://www.google.com/search?hl=en&i...counts&spell=1

    I also recall not to long ago where CWC lowered their commish on goods purchased from the clearance section of their site and it seems likely they didn't lower it enough if they are banning sites with very low profit margins.

    Not to tick anybody off but... perhaps CWC should reconsider if they want all those coupon sites promoting them solely for discounts in the first place since they are all pretty much pushing discount items anyway.

    I agree it doesn't seem right to have converting affiliates dropped for low profit margins but it does tell you they are micro managing the results obtained from the affiliate channel which in itself isn't a bad thing for them to be doing.

  13. #13
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    Shouldn't they maybe instead analyze their site traffic and learn how to upsell customers?

    Their bland website does no upselling, does not suggest other products the customer may like, or other products in that category. Or since they are a fashion site - geranimal it - what goes with it, suggest products to the customer.

    As affiliates we can only take that customer on the first step, we can only link in on one product, it is the job of the merchant to fatten the order. This is a failure of their 1st generation shopping cart, not a failure of the affiliates.

    All you need to do is look at amazon. I send someone there for a book on whittling, and they end up buying the book and a table saw.

    -edit - just noticed on some products they do suggest one other item. But it still seems they are scared to leave their stark, no frills look to try and push some more products.

    Chet

  14. #14
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    I'm confused why they offer those 50% off coupons, but then are surprised by low margins.

    Anyways, if they have something you really wanted to offer on your site, you could do it through some other affiliate programs where CWC has set up a storefront. You will also earn higher commission rates, get a consolidated check, and to some degree you will avoid the parasites and certain bad TOS's too. The same holds true for other undesireable programs like Tiger Direct.

    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR> All you need to do is look at amazon. I send someone there for a book on whittling, and they end up buying the book and a table saw.
    <HR></BLOCKQUOTE>

    They might also pick up a CWC outlet sweater with the book and table saw. And Amazon will try to suggest other items.

  15. #15
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    I now promote Coldwater thru Amazon, and Jimbo and Chet are right, usually customers end up buying something else when going to Amazon. Kinda like people going into grocery store for some milk or a loaf of bread That's a great thing with Amazon, them having merchants that don't have affiliate programs, can just promote them thru Amazon.

  16. #16
    Defender of Truth, Justice and the Affiliate Way
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    Sheesh...if we had Darwin Awards for Affiliate Marketing, CWC would definitely be in the running.

    Truly short sighted management on CWC's part. It's CWC who can control their own profit margins (and I mean outside of terminating affiliates). If they are so concerned with their profit margins, then why all those creatives offered to affiliates with big "70% Off" on them? If they want to increase profit margins, then quit providing affiliates with promotional tools for their Outlet and focus on promotions to the other areas of their site. CWC promotes the Outlet themselves heavily on their own site.

  17. #17
    ABW Ambassador qball0213's Avatar
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    Here is what they said to me,
    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>For a business relationship like ours to continue, each party must see benefit. Unfortunately, the evaluation of your sales, new customer acquisition and program profit showed that your program is unprofitable for Coldwater Creek. Over the last year, Coldwater Creek has lost more money than it's made from the customers sent via your affiliate program. Therefore, we plan to terminate our affiliate partnership with your Web site, effective May 12th, 2004. <HR></BLOCKQUOTE>
    How can I cost them money to send them visitors, I don't even send them much traffic because I haven't really promoted them, because of things in the past. Morons.

  18. #18
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    "Coldwater Creek has lost more money than it's made from the customers sent via your affiliate program"

    What a stupid thing to write. Are those visitors stealing from Coldwater Creek? What a bunch of idiots

  19. #19
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    looks like the same email went out to a bunch of affiliates, word for word what mine said.

  20. #20
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    Sounds like CC is making too much money.

    The resaon for being in business is usually to make money , generate income

    Unless their program is running now and losing money, if it still generates money an issue such as this makes little sense.
    I have always said if business is so busy I get tired of making money it is time to get out, since obviously the true focus of being in business is gone.

  21. #21
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    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR> Their bland website does no upselling, does not suggest other products the customer may like, or other products in that category <HR></BLOCKQUOTE>

    But it does though
    It sends them off to their market place where they run as an affiliate in direct competition to us!!!

  22. #22
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    I hate those coupon code boxes at checkout.. and I myself do abandon carts or at least open up new browsers and start searching to see if there are any.

    Discounts should be in the URL and automatically set by a cookie or something or passed along and displayed above the code box and the code box should not even appear if there is no code applicable to the item being purchased.

    Of course buying online as a Canadian I try to save every penny due to taxes, shipping, fees going through the border. BLAH usually it evens out and could've got it for the same price locally hehe.

  23. #23
    Newbie Affiliate Ian's Avatar
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    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by qball©:
    How can I cost them money to send them visitors, I don't even send them much traffic because I haven't really promoted them, because of things in the past. Morons. <HR></BLOCKQUOTE>
    qball, because your traffic with little promotion is already so massive that it effects them! hehe Imagine if you really promoted them?

  24. #24
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    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by Canadian eh:
    I hate those coupon code boxes at checkout.. and I myself do abandon carts or at least open up new browsers and start searching to see if there are any.

    Discounts should be in the URL and automatically set by a cookie or something or passed along and displayed above the code box and the code box should not even appear if there is no code applicable to the item being purchased. <HR></BLOCKQUOTE>

    We actually have some hard data which proved our theory about coupon fields leading to higher abandonment.

    Long story short: we used to show the coupon field in the shopping cart page, but I was concerned that we were losing too many potential customers who saw the field and went off to find a deal somewhere. We moved it further back in the checkout process before last holiday, when the customer is somewhat comitted to the purchase, and we saw abandonment drop from the shopping cart page.

    We're a multi-channel retailer (540+ stores), so our Marketing group is always creating printed coupons for use in stores, and we have to be able to accept them online, otherwise, I would lose them from our site completely.

  25. #25
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    Why not have all of your available coupons listed on the shopping cart page? Include a check box with each and let the customer choose which one they desire.
    This way, they would not have to go off looking for a better coupon.

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