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September 14th, 2005, 09:31 PM #1
Its the same old argument
- Join Date
- January 18th, 2005
One of my merchants decided to lower their commission and cookie duration, giving me this cocking bull story that its the long cookies, cj fees and bonus that is the reason for doing it. Regarding the cj fees, I told them to move to shareasale. But the other things they just don't understand affiliate marketing...Here is my reply to them, do you guys agree and did I miss any other arguments? (Note they told me in their email that some of this products are only a 25% markup and they are lowering their commission from 10% to 7% and lowering their cookie duration from 45 days to 1 day. (Sorry for the spelling errors and typos)
------------------------------- My reply is below.
This is now a purely intellectual argument since I never made many sales for
you anyway. Unlike all other forms of adverttising you are in a no lose
situation from the merchant/affiliate perspective. (If cj's cut is too much
that you have to take up with them or simply move to shareasale which has a cheaper cost structure)
But, lets take what you are referring to, lets say an action figure has a
25% markup, meaning for a $10 action figure your price is $13.33 (75% of
13.33 is $10 thus a 25% markup.) You pay us 10% so the affiliate get's 1.33
and you make $2. If you sell it today or 60 days later, you always make $2.
You aren't paying for advertising, you are generating profits you never
would have made. If the sale is not made, then you simply didn't make $2.
No matter which way you think about it, you not paying anything for
advertising. You have 2 choices, you can make the sale and earn $2 ot not
make the sale any earn nothing. Plus once the sale is made, you can promote
your products to your new customer generating more revenue.
You act like you are actually paying money out like newspaper advertising
which cost you a fixed amount regardless of the sales. Affiliate marketing
is gauranteed sales since if sales are not made you pay nothing.
If you made a bad decision by promoting something that didn't sell. You
didn't pay us for it anyway. So now what are you going to do, if you lower
the amount you pay the affiliates, some of them will drop you, resulting in
less sales and thus less profit for you. This of course means that you have
a lower opportunity to sell the slow moving products too. If you must make
a tough decision regarding your marketing costs, then I suppose you should
stop advertizing in papers, media, since they don't gaurantee you any sales.
One day cookie is not acceptable for the same reason (technically its even
worse than the lowering of 7%, since I only get paid for sales. Lowering of
cookie length is in my opinion stealing my money because you still make
sales and you don't pay the person who made those sales possible.
What if we changed the deal, I told you, don't pay me anything per sale,
just pay me x dollars per month to be included on my site. I gaurantee
nothing, would you really go for it? Or how about this, you pay per click
instead of per sale, this way you are paying for advertizing. Your thinking
on affiliate marketing as it is is shortsighted. Show me another place in
all of marketing which gaurantee you a return. You only pay with the
profits of the sale. It may lower the profit a little bit, but there is
always a profit.
September 14th, 2005, 09:43 PM #2
- Join Date
- January 18th, 2005
- St Clair Shores MI.
If the merchant can't buy into that rational they're not worth promoting at 15% commission. Liers. No action figures or toy related products don't have at least 50% markup if this is a legit tax ID# operation. I suspect a drop shipping middleman or affiliate, posing as a merchant, for this draconian move.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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