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  1. #1
    Newbie
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    April 26th, 2005
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    Budget for a merchant on CJ.com?
    Hi everyone,

    we are trying to evaluate joining CJ.com as a merchant.

    Can someone give us an idea of the overall budget that a new merchant would need?

    We know the cost of joing CJ Access (displayed clearly on their website), therefore we are not interested in that.

    We understand that there is a minimum budget before CJ will allow us in.
    Therefore we are more interested in what kind of budget we should have before we are allowed to join as a merchant
    - in the case of CJ Access
    - in the case of CJ Vantage

    Thank you.

  2. #2
    Affiliate Manager Rob@GoFreelance's Avatar
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    January 18th, 2005
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    hi Aikon

    Apart from the setup and joining fees, you only need to keep a balance of at least $500 in your account, although realistically you need substantially more than that, otherwise your account may be drained by a rush of traffic. You don't want to come in on Monday morning to find your account has been de-activated due to lack of funds...

    You should allow a budget for additional marketing to affilates, but that needn't be too expensive. Most importantly, you should budget a lot of time for helping affiliates make the most of your program.

    Rob Palmer
    Freelance Work Exchange...Get an EPC of up to $176
    http://forum.abestweb.com/forumdisplay.php?f=106

  3. #3
    Outsourced Program Manager e-Gazer's Avatar
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    January 18th, 2005
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    Budget's vary from merchant to merchant
    Hi there,

    Rob is right - most of your Affiliate Marketing budget goes to the time spent on liaising with and monitoring Affiliate sites, recruiting new ones and all that jazz.

    Since unlike traditional forms of advertising, you pay for your Affiliate advertising after the sale is made (as opposed to before), your expense for such activity will vary from one merchant to another. It really all depends on what % of your overall revenue comes from Affiliate Marketing, and what % you can expect to pay out on each of those sales.

    For a decently run, effective program, I believe you can expect at least 20% of your gross revenue to come through CJ once you're up and running, and once you have a good number of active & effective publishers working with you.

    You'll obviously know more as months pass and once you have actuals to work with, but in the meantime, I'd suggest forecasting that 20% of your gross revenue will come from Affiliate Marketing just to be safe.

    Look at 20% of what has been forecasted for total units sold for the time period you're working with, and calculate how much you plan to pay out in commissions by using your AOV (average order value). Base it of course, on the % you plan to set your Affiliate commission payout at.

    Factor in the cost of Affiliate Management, add in a li'l room to play (i.e. additional promotional initiatives as mentioned by Rob) and that should give you a decent number to work with.

    Quick Tip: It is of course, always better to over budget than under budget of course if you have the room to do so. Might be elementary to some but still worth mentioning IMHO.

    Hope that helps.

    Best of luck in getting your program up and running! May it be as fruitful for you as it has been for us (so long as you're not our direct competitor!! Haha)

  4. #4
    Newbie
    Join Date
    April 26th, 2005
    Posts
    3
    Thank you Liz and Rob.
    Really appreciate the tips and the knowledge that you have shared with us.
    They are indeed very helpful.

    Since we like to think long term, we are just wondering how much it will cost us to upgrade to CJ Vantage instead of the basic CJ Access?
    We understand that the features and functions of CJ Access is limited, e.g. no per item billing, performance bonuses and such. And therefore we are concerned about optimizing the campaigns as much as possible. But what about the costs of upgrading to Vantage in order to make full use of the additional features?

    Any thoughts to share regarding the above?

  5. #5
    Full Member amanda_mytights's Avatar
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    January 18th, 2005
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    Monthly Fees - Remember
    Also to remember as a Merchant - Minimum Monthly Fees.

    Don't forget that starting out can be slow sometimes and CJ charges you for everyting!

    Since CJ takes 30% of each commission to affiliates remember that CJ must make $500/month. If they do not receive this amount they will charge you the difference in the form of a minimum monthly fee.

    This can be very draining when starting out, so something to think about.

    Also, when asking about services being added etc. always ask how much it will cost, b/c it will always cost something and it's better to ask up front before seeing the charge show up on your account.

    I also agree that you have to set aside a lot of time for getting involved with publishers, as tons will sign up initially but the extra effort you make to get them promoting you is what will make the difference.

    Hope this helps. I have only been on CJ since September but these have been some budgeting issues we've run into over the last 7 months.

    Best of Luck,
    Amanda

  6. #6
    Newbie Dasha's Avatar
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    May 3rd, 2005
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    Quote Originally Posted by aikon
    Can someone give us an idea of the overall budget that a new merchant would need?
    So what would the overall initial budged be + how much per month if they don't get their $500?! I am also considering joining CJ, but am leaning towards SaS at the moment...

    Dasha

  7. #7
    Ad Network Rep ToddCrawford's Avatar
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    aikon,

    First we'll cover the minimum investment and how it translates to revenues to your company (assuming you are not running a lead program). Since the monthly minimums for CJ Access are $500, you need to pay out at least $1,666 in commissions each month ($500/30% txn fee = $1,666). If we then assume you are paying affiliates 15% commissions (you can change this to suit your margins), this means you need to generate around $11k in sales per month ($1,666/15% = $11k). If your current business is generating $100k in sales per month, it is safe to assume that an affiliate program could add an additional 10% - 20%, which would mean you are around the minimum level of what we are looking for from a CJ Access client.

    Since we do not have unlimited resources available for the CJ Vantage level of service, we need to qualify your business to ensure that the higher minimums will work out for your business. If we use the above formula, you would need to generate around $110k in sales through your affiliate program each month at a minimum to qualify for this higher level of service. If that represented 10% of your online business, you would be generating over $1 million a month in sales.

    Another things to remember is that during the first year the program will gradually ramp us and the minimums will play more of a role during the first 3 - 9 months.

    If you want to explore our services further, I suggest you talk to someone on our inside sales team. They will go through the above information specific to your business and help you determine if we are the right solution for you - we can provide you projections that will help you put together a budget. As others said above, don't forget internal resources to make the program as successful as possible - affiliate marketing is hard work but it does pay off if you put the right resources behind it.
    Todd Crawford
    Co-Founder, Impact Radius

    Give me a minute before I post again

  8. #8
    ABW Ambassador Ron Bechdolt's Avatar
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    Todd,

    If you have stated this above, I'm not sure I got it. How much is a merchant required to have paid CJ as an advance towards commissions due affiliates? Is only the $1,666 or is it a different figure?
    Ron Bechdolt | Affiliate Program Management Consultant
    7 Days A Week Marketing

  9. #9
    Ad Network Rep ToddCrawford's Avatar
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    Quote Originally Posted by 7-days
    Todd,

    If you have stated this above, I'm not sure I got it. How much is a merchant required to have paid CJ as an advance towards commissions due affiliates? Is only the $1,666 or is it a different figure?
    My numbers were to illustrate the sales volume necessary to meet or exceed the $500 monthly minimum. We reqire a $3k deposit for commissions/CJ fees.
    Todd Crawford
    Co-Founder, Impact Radius

    Give me a minute before I post again

  10. #10
    ABW Ambassador Ron Bechdolt's Avatar
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    Todd,

    First, thanks for all this great info.

    Second, don't you think a set amount for the deposit is a bit low? Should it not be an amount, once a merchant has been with CJ for say six months, that is more reflective of the volume of commissions a merchant pays out? I say this, because I got burned when ParaflexMed left CJ last month and three months of commission got reversed. Obviously, 3K was not enough or this merchant was allowed to slide for several months (while they got sales) without paying their 3K each month. It would seem to me that 3K figure was way too low for ParaflexMed.

    Not complaining here, just thinking CJ needs to adjust this figure if they want to truly protect their affiliates (that trusted third party thingy, you know).

    Third, sorry I got this thread off track. The subject matter caught my attention and this has been a long standing question I have wanted to ask.

    Fourth, JOIN CJ! They are worth it.

    Thanks again.
    Last edited by Ron Bechdolt; May 4th, 2005 at 03:59 PM.
    Ron Bechdolt | Affiliate Program Management Consultant
    7 Days A Week Marketing

  11. #11
    lurk
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    March 25th, 2005
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    Quote Originally Posted by Dasha


    So what would the overall initial budged be + how much per month if they don't get their $500?! I am also considering joining CJ, but am leaning towards SaS at the moment...

    Dasha

    Is this goign to be your first affiliate network you are going to join as a merchant? If so, there's no point in not going with SaS first, its so increadibly cheap and has a suffient amount of publishers.

    Once you dial in your program and want to ramp things up, join CJ (as long as everything is scaleable ).


    Good luck,

    Jason

  12. #12
    Newbie Dasha's Avatar
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    May 3rd, 2005
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    Quote Originally Posted by jrod805
    Is this goign to be your first affiliate network you are going to join as a merchant? If so, there's no point in not going with SaS first, its so increadibly cheap and has a suffient amount of publishers.

    Once you dial in your program and want to ramp things up, join CJ (as long as everything is scaleable ).
    Jason, after reading through all of this here, this is exactly what I'm leaning towards... Thanks for affirming me in my preliminary decision.

  13. #13
    Ad Network Rep ToddCrawford's Avatar
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    Ron,

    $3k is just the initial deposit amount. Once a program is up to speed, advertisers usually deposit or submit the necessary amount to cover all fees and commissions.
    Todd Crawford
    Co-Founder, Impact Radius

    Give me a minute before I post again

  14. #14
    ABW Ambassador Ron Bechdolt's Avatar
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    Not to be too critical, Todd, but whatever the system was with ParaflexMed, it REALLY failed to protect affiliates. Maybe you all got your $500 a month out of what they had deposited, but I sure did not get my commissions for this year. I sure don't want to go through that again with any other merchant. Can CJ do something to protect us when this occurs?
    Ron Bechdolt | Affiliate Program Management Consultant
    7 Days A Week Marketing

  15. #15
    Newbie
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    Quote Originally Posted by ToddCrawford
    If your current business is generating $100k in sales per month, it is safe to assume that an affiliate program could add an additional 10% - 20%, which would mean you are around the minimum level of what we are looking for from a CJ Access client.

    Thanks Todd for explaining.
    But I need to clarify the above sentence.
    Do you mean CJ Access client? or CJ Vantage client?

  16. #16
    Ad Network Rep ToddCrawford's Avatar
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    Quote Originally Posted by aikon



    Thanks Todd for explaining.
    But I need to clarify the above sentence.
    Do you mean CJ Access client? or CJ Vantage client?
    Yes - I was referring to CJ Access.
    Todd Crawford
    Co-Founder, Impact Radius

    Give me a minute before I post again

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