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  1. #1
    lurk
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    From affiliate site to merchant site...
    How many of you have made this transition... let's say you started a website out and had some data feeds or affiliate links and started to establish the website very well making great conversions. Soon your traffic starts picking up.

    How many of you have decided at that point that you were tired of a 10% commission and would put in the work to actually order/ship products out yourself and make the complete commission as a merchant site?

  2. #2
    Moderator MichaelColey's Avatar
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    Very few, I suspect. As affiliates, we love the fact that we don't have to touch the products, mess with shipping, worry about credit cards, handle customer service (for the most part), etc. If it's done right, it can be an almost totally hands off business that only needs minimal time.
    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

  3. #3
    lurk
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    Right, I figured as much. Although curious as to how many changed their mind and wanted to transit into a full blown business? (not to say AM isn't a full blown business of course...)

  4. #4
    Analytics Dude Kevin's Avatar
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    What would you see as the advantage, jrod? Unless you manufacture the product or directly provide the service, can you bump the profit line far enough above the standard affiliate commission to make it worthwhile?

    I'm sure you are just thinking out loud here, but I would strongly suggest looking at the ROI on this before you jump into it.

    Time is the most valuable asset you have as an affiliate, primarily because you can use it to build more and better sites that gain additional revenues, rather than getting involved as a reseller.

    Also consider trying to negotiate yourself a higher commission with a vendor you send a lot of traffic/sales before you consider selling it yourself...

  5. #5
    ABW Veteran Mr. Sal's Avatar
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    Quote Originally Posted by jrod805
    How many of you have made this transition... let's say you started a website out and had some data feeds or affiliate links and started to establish the website very well making great conversions. Soon your traffic starts picking up.

    How many of you have decided at that point that you were tired of a 10% commission and would put in the work to actually order/ship products out yourself and make the complete commission as a merchant site?
    This is the way I figure out, as a merchant, if my traffic goes down for whatever reason, I will lose a lot of money, but as an affiliate, if my traffic goes down like it's now, I won't have to worry about from where to borrow money to keep the business alive.

    Very few, I suspect. As affiliates, we love the fact that we don't have to touch the products, mess with shipping, worry about credit cards, handle customer service (for the most part), etc. If it's done right, it can be an almost totally hands off business that only needs minimal time.
    Ditto,

    I agree with all that.

    Right, I figured as much. Although curious as to how many changed their mind and wanted to transit into a full blown business? (not to say AM isn't a full blown business of course...)
    I did tried that a few years ago but, there is nothing like the freedom that Affiliate Marketing brings, once you're making money without having to worry about dealing with products, shipping charges, credit cards fraud, bad affiliates and other financial liabilities, etc, that goes with that territory.

    Also, there is nothing better than been able to get up and go to sleep at any time you want, work as many hours you want or take as many days off as you want in a month, without having to worry that if you're not there, you will make no money.

    But, it's good to have a full blown business as a merchant, as long as you have someone else running it for you and you just collect the profits, but if you go that route, then you will run into the problem of trust, it's not that easy to find someone to trust 100%, to run a business for you.

    So that's what I think.

    Now I going back to read more posts on ABW because, since I am an affiliate marketer, I don't feel like working on my pages today, my visitors know that my sites are open 24hrs, so they don't need me to be there to make me some money, any time they feel like shopping at my stores.



    Sal.
    ...

  6. #6
    ABW Ambassador
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    I think the leap from affiliate to merchant sounds very interesting. It gives you better control over the configuration and quality of the things you sell. I think the transition would be especially tempting for people who dream about expanding into a full fledged company.

    If I had a big pot of money saved and was looking for ways to invest in my company, I would pursue this direction.

    The transition from casual ebay store to full blown merchant is probably more common.

  7. #7
    Resident Genius and Staunch Capitalist Leader's Avatar
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    Quote Originally Posted by jrod805
    Right, I figured as much. Although curious as to how many changed their mind and wanted to transit into a full blown business? (not to say AM isn't a full blown business of course...)
    HERE

    I've still got all my aff sites too, though. After all, can't let the sales of all those other products (the ones I don't sell) get away!

    What would you see as the advantage [to being a merchant]
    • Marketing strategy doesn't change with the wind, webmaster fads, or according to who can argue the loudest/best on ABW
    • Tracking is never affected
    • Neither is reporting
    • No waiting a month or even a week to get paid
    • No unexplained reversals
    • More control over my own destiny
    • More room to play PPC and still keep my shirt on
    • Can do offline advertising...without trying to get the customer to type some oddball tracking URL
    • If something's anticonversionary, I can just change it
    There is no knowledge that is not power. ~Hemingway

  8. #8
    Moderator MichaelColey's Avatar
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    Quote Originally Posted by yintercept
    I think the transition would be especially tempting for people who dream about expanding into a full fledged company.
    I just want to point out that a company based on affiliate marketing can still be a "full fledged company". I've been doing this full time for five years, and my bank certainly considers me a "full fledged company". The IRS does too. I know of other affiliates that are even more successful than I am, including some that have dozens of employees. As an affiliate, your growth is virtually unlimited. With a more traditional business, there are many more barriers to growth.
    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

  9. #9
    Affiliate Manager dculpepper's Avatar
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    My business partner and I made the move from affiliate to merchant. After 7 reasonably successful years in affiliate marketing we decided to move to the other side of the aisle and are doing pretty well so far. We are growing everyday and still feel that it was the right move for us.

    Of course, I am a chemist by trade and also own a very successful environmental laboratory so I had business experience and a good financial base that has certainly helped.

    David Culpepper
    MagazinesQuick.com

  10. #10
    Newbie
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    It really depends on the niche market. An affiliate site running different networks products on a single site will not find themselves easy in starting their own merchant site whereas a content affiliate site gaining traffic can have their own content build later on.

    I agree with Coley where he mentions that affiliates are free and can relax where shipping, payment transactions are concerned with the consumers but at times affiliates feel like " Hey,I am selling the products and I am only getting a 10% share", I can start this too but later they realize that " Oh, the products are not mine and how the shipping/payment will be carried"

    It's easy to think turning from an affiliate to merchant but it's hard to implement.A merchant is an affiliate in himself whereas an affiliate is only a hidden merchant to his consumers.

  11. #11
    ABW Ambassador simcat's Avatar
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    I would only become a merchant if I could find/make some unique or custom merchandise not available elsewhere. It s hard to compete w/ the wal-marts of the web.
    Ebay or Ebay Stores is a good way to dabble in selling merchandise. You dont have to keep up an inventory, just sell what you have on hand. Look for bargains and sell them..

  12. #12
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    Quote Originally Posted by Mr. Sal
    This is the way I figure out, as a merchant, if my traffic goes down for whatever reason, I will lose a lot of money, but as an affiliate, if my traffic goes down like it's now, I won't have to worry about from where to borrow money to keep the business alive.


    Ditto,

    I agree with all that.


    I did tried that a few years ago but, there is nothing like the freedom that Affiliate Marketing brings, once you're making money without having to worry about dealing with products, shipping charges, credit cards fraud, bad affiliates and other financial liabilities, etc, that goes with that territory.

    Also, there is nothing better than been able to get up and go to sleep at any time you want, work as many hours you want or take as many days off as you want in a month, without having to worry that if you're not there, you will make no money.

    But, it's good to have a full blown business as a merchant, as long as you have someone else running it for you and you just collect the profits, but if you go that route, then you will run into the problem of trust, it's not that easy to find someone to trust 100%, to run a business for you.

    So that's what I think.

    Now I going back to read more posts on ABW because, since I am an affiliate marketer, I don't feel like working on my pages today, my visitors know that my sites are open 24hrs, so they don't need me to be there to make me some money, any time they feel like shopping at my stores.



    Sal.
    Amen to that! I've noticed recurring personality traits among affiliate marketers. Some of those traits are 1) Independence and 2)Disdain for the corporate culture. The whole appeal of this affiliate marketing gig for the majority of us is FREEDOM! For me, switching over to selling my own tangible products would be tantamount to going over to the dark side.

    Peace & Blessings,
    White Wolf
    Blessed Be,
    White Wolf

  13. #13
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    I sold cosmetics for a while, but I found the customer service aspect of it alone was enough to make me pray I got run over by a pink Cadillac. Affiliate Marketing Rules!!!! I have minimal if any customer contact, which suites me just fine. Only if the AM boat completely sank would I shift with the breeze and become a merchant.

  14. #14
    Plazan Merchant Neil's Avatar
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    have to touch the products, mess with shipping, worry about credit cards, handle customer service (for the most part),
    that and a thousand other things.

    customs at this end, customs in other countries, vat .
    goods returned, marketing, getting the program of the ground, finding affiliates, cash funding,
    having to have papers for everything,

    i am glad that someone knows we dont just sit back and take orders
    Find us at shareasale.com 12% commission
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  15. #15
    ABW Ambassador John Kruger's Avatar
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    I took the leap, from aff marketing and services, now I run a very successful business that is growing leaps and bounds. It took nearly a year of product development, with a ton of headaches not even realized. I still maintain the freedom of an affiliate, but have a bit more affect on the bottom line.

  16. #16
    ABW Ambassador
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    As an affiliate, your growth is virtually unlimited. With a more traditional business, there are many more barriers to growth.
    I'm sorry, I was looking at the Forbes 400, the Fortune 500, the Inc 1000, etc.. My eyesight might be bad, but I don't see a long list of affiliate marketers. I may be wrong (and I am sure that Chet will point out that I am wrong) but, I have a strange feeling that the people on the long list of rich and famous found ways to make money outside affiliate marketing.

    The post was not intended as an insult to affiliates. It said that if you had a successful business as an affiliate marketer and were looking for ways to invest your money into your business, taking the route of establishing yourself as a merchant is a good direction. The barrier to establishing yourself as a merchant is capital and access to the market. If you were successful establishing yourself as an affiliate, then you have crossed both of these barriers.

    Affiliate marketing has low start up costs and can return a phenomenal ROI. It is possible to invest $10k into a web site and get a $100k return in the next year or so (if you are lucky). But the law of diminishing returns kicks in quickly. If I had several million dollars to invest in a company, I would not sink it into building affiliate web sites, I would be more inclined to sink it into developing a product or establishing a merchant site.

  17. #17
    ABW Veteran Mr. Sal's Avatar
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    If I had several million dollars to invest in a company, I would not sink it into building affiliate web sites, I would be more inclined to sink it into developing a product or establishing a merchant site.
    When I get my 2nd million dollar cash in my hands, I will not going to worry about any networks or the other search engines anymore.

    In the mean time......... ..........

    .... ....

    -----------------------

    Then, oon ........

    ...

  18. #18
    Internet Cowboy
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    I did just the opposite
    I moved from the merchant side to affiliate marketing. When you are on the merchant side you have phones that ring off the hook, fraudulent transactions to deal with, employees, lost shipments, inventory issues and a multitude of other headaches.
    My phone doesn't ring and I get up and go to work on my own schedule. Granted, I usually get up early and get going, but when I want to sleep late or take the day off on a whim and jump in the car and go somewhere...I can do this without worrying what problems will go unsolved or get compounded as a result of my not being there.
    I love affiliate marketing. It would take an obscene amount of money to get me back to dealing with all of the other headaches that we avoid as affiliates.


  19. #19
    Resident Genius and Staunch Capitalist Leader's Avatar
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    For me, switching over to selling my own tangible products would be tantamount to going over to the dark side.
    That's because you're comparing it to a j*b--as in, employment!
    It's different when you're the boss...

    My phone doesn't ring and I get up and go to work on my own schedule.
    LOL you don't think I'm going to set an alarm, do you?! Ha ha it's not like bulbs have to get put in the fridge or something!
    And if someone is smart enough to use the whois and get my phone #, well, they've passed Bozo Filter #1.
    There is no knowledge that is not power. ~Hemingway

  20. #20
    ABW Veteran Mr. Sal's Avatar
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    LOL you don't think I'm going to set an alarm, do you?! Ha ha it's not like bulbs have to get put in the fridge or something!
    Say what?

    I thought the bulbs needs a great deal of watering.


    Sorry Leader.
    ...

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