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  1. #1
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    ?'s on starting a wine club affiliate program?
    I'm doing some web work/consulting for a wine club/wine retailer.

    I have suggested the posibility of starting an affiliate program as a way to boost membership.

    The programs for two bottles range from $29 - $89 per month for two bottles.

    Do these numbers make sense for you as a web site owner?

    $39 club signup - 2% for life of membership. i.e. $.78 per member per month every month as long as they are a member.


    $49 club signup - 2.5% for life of membership. i.e. $1.22 per member per month every month as long as they are a member.

    $89 club signup - 3.0% for life of membership. i.e. $2.67 per member per month every month as long as they are a member.

    30 day cookies for the above programs.

    Receive permanent cookie for any email newsletter signup. As long as they receive the newsletter, if they sign up (a day later, a year later, doesn't matter) you receive the above rates.

    Also possible:

    Amazon-like xml feed of complete inventory, product tasting notes/descriptions, etc. Minimum purchase one case ($120 - $500ish/case) at 5% of sale.

    Comments?

  2. #2
    Not Verif-Lidated infoTim's Avatar
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    I like the xml feed idea...I could definitely put that to good use.
    Tim
    consultant by day, affiliate by night

  3. #3
    Moderator MichaelColey's Avatar
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    Most "subscription" or "membership" programs pay a flat fee equal to about one or two months.

    I've always thought that was a bit unfair. I would prefer to see something based more on the commission structure that insurance companies use. They compensate a high percent in the first year (like 50%) and a lesser amount in future years (like 10%). I realize there might be less margin with your product, but something proportional (like 25% and 5%) might do well.

    2-3% seems very, very low. I don't promote alcohol, but if you were selling a product that I would promote, I probably wouldn't do it for 2-3%.
    Michael Coley
    Amazing-Bargains.com
     Affiliate Tips | Merchant Best Practices | Affiliate Friendly? | Couponing | CPA Networks? | ABW Tips | Activating Affiliates
    "Education is the most powerful weapon which you can use to change the world." Nelson Mandela

  4. #4
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    Quote Originally Posted by infospongellc
    I like the xml feed idea...I could definitely put that to good use.
    I'm thnking as I look at the business, it would probably be about 5% per sale, but as I said, case quantities only are sold, so the sales are between $100 - $500.

    Would that be around the range that a webmaster would be interested in considering?

  5. #5
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    Quote Originally Posted by MichaelColey
    Most "subscription" or "membership" programs pay a flat fee equal to about one or two months.

    I've always thought that was a bit unfair. I would prefer to see something based more on the commission structure that insurance companies use. They compensate a high percent in the first year (like 50%) and a lesser amount in future years (like 10%). I realize there might be less margin with your product, but something proportional (like 25% and 5%) might do well.

    2-3% seems very, very low. I don't promote alcohol, but if you were selling a product that I would promote, I probably wouldn't do it for 2-3%.
    Thank you for your response. So am I looking at a minimum of 10% or more for a one time payout, I guess....could be tough...

  6. #6
    notary sojac Herb ԿԬ's Avatar
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    Cool
    with the availability of 2- and 3-bottle shipping cartons, I can't see the reason for selling whole cases. nor can I understand why someone would even consider a whole case, sight unseen, without a taste first. but then, Bronco is going to put out several varieties in the $4 range that supposedly will be of reasonable quality.

    and any wine seller who wants to make a buck is also going to have to sell individual bottles using a very up to date feed or a dynamic PSC. (one of the industry problems is keeping up with inventory.)

  7. #7
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    Quote Originally Posted by Herb ԿԬ
    with the availability of 2- and 3-bottle shipping cartons, I can't see the reason for selling whole cases. nor can I understand why someone would even consider a whole case, sight unseen, without a taste first. but then, Bronco is going to put out several varieties in the $4 range that supposedly will be of reasonable quality.

    and any wine seller who wants to make a buck is also going to have to sell individual bottles using a very up to date feed or a dynamic PSC. (one of the industry problems is keeping up with inventory.)
    You'd be surprised. I've been in the wine business for about 10 years, and I 've sold millions of $$$$ in wine. I think you'd be really surprised how many people buy by the case. I would already be retired if I had case quantities available on every wine I ever wanted too - not even the big scoring ones either. $15 stuff that people buy 10 cases at a time.

    But your point is valid. Some people do want to buy only a couple bottles of each or so, but then the question becomes profitability. Shipping two $20 bottles isn't that profitable for anybody in terms of man hours in the warehouse, peperwork etc.

  8. #8
    Kung Fu Master Eathan's Avatar
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    I think something along the lines of a nice up-front bounty with smaller, monthly residual payments would work. I'd personally be happy to see 25% of the first month plus at least 5% for the life of the club member (permanently store my ID in the DB with their member info).

    I am a little confused though. The thread started with a wine club, but it sounds like you'll be selling by the case as well...? To anyone, or just club memebrs?
    Eathan Mertz

    Black Cat Mining - Gold Prospecting & Rockhounding Equipment

  9. #9
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    Both. The company deals purchases large quantities of wine, the bulk of which goes to club members. In most cases more than needed are purchased so that if someone likes the wine they can buy more later. Club members get special discounts but anyone can buy by the case at regular prices.

    You seem to be somewhat close to other's ideas. Maybe markups on wine aren't as much as they are in other business but 25% would porbably put the company at near loss if not in the red; but then, the theory is if you get them to stay 5% or even more is probably doable thereafter.

    Of course there are several "terms" of enrollment.

    I could see doing a higher percentage if they guarantee enrollment for 12 months as opposed to 3 months, though...I'm thinking out loud..but I hadn't thought of that before.

    25% signup + say 5 - 8% per month ad infinitum minimum 12 months might work.
    25% signup + 5-8% for three months probably wouldn't...

    What about something like
    10% signup for three months + 5% for life of program.
    6 months 15% + 6%
    9 months 20% +6%
    12 months 25% + 7%

    I'll have to really crunch the numbers when I get them all (this is a new venture and the information is coming bit by bit) but I just don't know if that works.

    But is this more in line with what people would expect?

  10. #10
    Kung Fu Master Eathan's Avatar
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    The real question comes down to average retention. How long does the average club member stay a member? Beyond that, how much do they order outside of the club?

    Basing commission percentages on length of subscription may be tricky, because a) it's not something affiliates have direct control over, and b) it's based more on the one-time sale than the recurring model of subscriptions. My guess is you'll want to save those level options for volume incentives and come up with a formula that works based on average retention.

    I've only had two club memberships myself, one was three months and the other a year. Both were gifts. I have no idea how long most enroll for, but I would think you'd either offer min 3 month subscriptions to start, 1 month with recurring billing built in or even 3 months with recurring built in. My totally uneducated guess is 4+ months per subscription.

    Say the average subscription length is 4 months. Maybe you can only do 20% + 5% recurring and still hit profit in the 3rd or 4th month, but factor in non-club spending by club members and life-time buying potential and that profit might not be so bad.

    Also, I said I'd be happy with 25% for month 1 + at least 5% thereafter, but I'd sign up for less. Recurring revenue potential always gets me...

    Now I need to write a review for this wine I'm drinking or it'll never get done. Cheers!
    Eathan Mertz

    Black Cat Mining - Gold Prospecting & Rockhounding Equipment

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