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  1. #1
    Newbie
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    February 28th, 2005
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    New Merchant dilemma
    I found ABW and am interested in learning about affiliates. I’m still learning how this works and have many questions. Hopefully, similar merchants like me will gain from my post. Write below with opinions and assistance, affiliate gurus!

    We’re selling online and through resellers. We custom build designer upholstered furniture. Now we are finishing new factory and will be available for increased output of production - $300000/month products in 3 months and around million in one year. Additional output may be sold through affiliates. Now each individual sale averages $1500.

    Before the Internet the typical sales channels were advertising in Trade magazines (we are doing to an extent), catalog sales (in the works), trade shows ($50 000 per show – this is in the future) brick/wall stores/boutiques (this is for our resellers for we sell in bulk to them) or sales by representatives. So now affiliates maybe replace most of those channels and be our online sales force.

    For discussion:

    - Product/Market – both exist. There is huge profit potential, especially online.
    - Competition - many Low End vendors are selling online cheap and low quality products at prices comparable to ours.
    High End – One Gorilla is selling a lot of furniture at prices 3 times higher more than ours... for similar products! Our quality is comparable, craftsmanship is also comparable. This gorilla is selling by several stores, catalogs and by internet using Performics.com as Program Management, and they offer for affiliates 10% discount. Most are selling from inventory ( % of our sales are also inventory sales - but most of our sales are custom orders - other custom furniture companies sell at much higher price than us).
    - Linkshare is not responding. Is it worth it to spend $10k to set-up and 2500/month? What about ROI with Linkshare, do they provide any guarantee anything, high visibility?
    - Sharesale is possible winner – we will advertise in several directories.
    - We are selling with low profit margin and planning to offer 5% off for Affiliate Program; 1/3 for Manager, 1/3 for buyers (2% discount), remaining for Affiliates, will this be enough?
    - Our resellers are getting 10% off our advertised prices. When Affiliates will find resellers they will get the 10% reseller discount, 5% will still apply as an affiliation program. A minimum of 3 full sets is required to be recognized as a reseller purchase.
    - We want to hire an Affiliate Manager who will organize and manage this program. Earnings are based on commission and $5000/month is possible under the condition that 1/3 of 5% of $300k with the potential of higher earnings based on our projected growth. Is this reasonable? What do you suggest? We can both make adjustments and we can both make profits.
    - Affiliate discount may be not good enough. Maybe we should set other brand, other WWW, increase price 10% and giving to Affiliate Program 15%?? We can’t do this now, because need cash flow, increasing prices may slow current sales.
    - Keeping all in US or save and give to someone from outside? US companies like Performics.com and *****s are offering this kind of service…what are some others that do the same? The Italian site myreferer.com also advertises management for affiliate programs. Possible manager for this program can be from any country.
    - Program will be parasite free. How to make sure of this?
    - To start this program we’ll spend a few hundred and not thousands. The rest depends on performances, not empty words.

    We are still at the learning stage of affiliate programs and want input on how to set and manage efficient program. Searching for opinions, feedbacks, helping hands and good business thinkers and his/her mind.

    Thanks

    jan

  2. #2
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    January 18th, 2005
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    St Clair Shores MI.
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    Cool
    Looks like what you need is either SAS or a Indy program structure. Custom made furniture pushed through affiliates will require they pre-sell -filter and focus shoppers to earn anything in this almost required face to face selling verticle. That means their page displays and content has to generate traffic where conventional furniture just won't fit the bill. In 5 years of pushing FurnitureOnline.com and Furniture.com through Linkshare with thousands of clicks I've never seen a sale appear. I only leave up any merchants on those home/office furniture pages cause they're in the freebee Serps and I can't just whack a Mall category landing page.
    Webmaster's... Mike and Charlie

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

  3. #3
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    February 28th, 2005
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    ????

    We are selling 2-3 sets a day just from 2 www - keywords search.
    dwr.com is selling 50MM$/y just from one www
    we have excellent prices, good quality, people are willing to wait

  4. #4
    Not Verif-Lidated infoTim's Avatar
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    January 18th, 2005
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    Sunny Florida
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    I actually sell a decent amount of furniture. Would be interested in your program if you get it going! ShareASale seems like a good outfit from what I've seen so far. I use Linkshare and CJ, but have so little faith in their reporting that I'm going to be putting more effort into SaS merchants going forward.
    Tim
    consultant by day, affiliate by night

  5. #5
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    Thanks Tim.
    Please send me PM, I'm new here and can't. Don't want to post my www address or e-mail here, it may broke rules
    jan

  6. #6
    Outsourced Program Manager Jorge - SHOPiMAR's Avatar
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    January 18th, 2005
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    Hello Jan,

    From what your saying, looks like youv'e done some pretty good research online already and have a good program.

    I would also suggest shareasale to start, like Tim says it will sell and the future is bright for affiliate marketing and selling just about anything online, even custom designs.

    BTW, Welcome to ABW

    Jorge

  7. #7
    Newbie
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    February 28th, 2005
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    Thanks Jorge for encouraging words.

    You are right, future is bright. Every furniture retailer’s reports min 20% on line annual sales grown, some much better.

    http://finance.yahoo.com/q/is?s=DWRI&annual

    From this company press release:
    “Direct sales (including sales through the phone and the Design Within Reach website) increased 20% to $15.2 million in the fourth quarter of 2004 from the same period last year. For the year, direct sales rose 15% to $50.6 million from $44.1 million in fiscal 2003 due primarily to the increase in catalog circulation and additional online marketing initiatives”

    US furniture market that’s 100 Billion dollars, at present time only single digit % are served by online sales.

    In early stage of Internet Furniture.com failed, because it was too early. Also, they want to be the single source from nail to space furniture. Real world is slightly different: if you want to buy coffee, you are looking for Starbuck’s, for Xerox we are going to Kinko’s, to be buy books its Barnes & Nobles. We are not going to Sears or to Wal-Mart, even though they sell everything, because they are not the Best. Market becomes vertical. We want to be the best only in affordable custom sofas. Later, when everything is in place - one mean cash cow, then we may concentrate on other furniture products. Each of our sofas are made by individual order, usually you won’t find a similar sofa in 100 mile radius.

    We operate a large warehouse in Los Angeles, open to the public, to see our selection – there will be other locations soon. When it’s possible to save hundreds of dollars, people are willing to drive few hours extra – i.e. Costco and Fry’s. Customers can choose and buy online more confidently after examining the leather/fabric samples we send free by request.

    I see you around

    jan

  8. #8
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    Custom furniture to me means just that. Due to size restraints or room design requiremnts the normal mass produced product doesn't fill the bill. Take boats where most all furniture stores sofas just don't cut the size, fabric and need requirements of the boater. Some of these boats cost more then your house so money isn't the object...finding a quality custom furniture builder is...

    Making something one at a time isn't custom building ...it's often cutting corners due to budget and material costs. I can tell you Onlinefurniture.com looks good but those Sunday paper inserts and mailbox flyers make the referral just site browsers. Make some boat sofas (with hidden storage) and sturdy upholstered chairs and be #1 in a niche' where the locals don't have the expertise to build creatively to a measurement. New boats hire furniture designers for factory production. Older boats require the owners take on the task of remodling. I'll bill you later for the sales consulting advice when you make it big.
    Webmaster's... Mike and Charlie

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

  9. #9
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    Thanks ecomcity for your suggestions.

    After finishing building our Custom build Designed sofa factory, we will build another one to produce what you suggest. You will be on our payroll.

  10. #10
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    I just had 3 friends bragging they spent over 1500.00 each to just re-upholster boat lounge chairs and sofas. They couldn't find from me, or other boaters, any locals in Detroit area to make them custom pieces. We work on bragging rights during the snow season. Those tradesmen have just died off! I spent $1490.00 just on one 43 inch sofa with pull-out drawer in the base with fabric matching the drapes for a 38' Bertrum Double cabin cruiser. Similar sofas in regular sizes cost what?....300.00
    Webmaster's... Mike and Charlie

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

  11. #11
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    Cool
    PS: be generous with thta commisison rate as I've sold computers and installed software servicing all major furniture manufacturers and distributors throughout the Southeast starting in 1978. I know their margins and markups.
    Webmaster's... Mike and Charlie

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

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