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  1. #1
    Full Member asr_guy's Avatar
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    Why do new merchants rush into affiliate marketing?
    I keep seeing on various forums postings like "Newbie merchant starting affiliate program needs advice". Some of the questions are way off track like "what is the best mix of % commission in a 3 tier structure?" and they don't describe their business nor have they been in business barely a few weeks.

    From most of the research I have read, affiliate marketing can give a 15-20% lift in your revenue and that's well after you are established and have optimized your traffic and conversions.

    What's causing this sense of urgency for merchants to rush to start affiliate programmes, before they have done much to get themselves established?

    Regards,
    Peter
    Last edited by asr_guy; December 22nd, 2005 at 05:28 PM. Reason: fix typo
    [URL=http://www.typoassassin.com/?utm_source=abestweb&utm_medium=forum&utm_content=p&utm_campaign=sig]Are these affiliates stealing from you?[/URL]

  2. #2
    Prince of Content Vinny O'Hare's Avatar
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    Simple answer - they are reading about the explosion of advertising on the internet and they need to be here. Some are cutting down on their print ads, radio ads etc
    Vinny O'Hare - OPM - Contact Info email: vinny at teamloxly.com ~ 702-582-6742 Twitter

  3. #3
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    No merchant should be allowed to open any affiliate program till they can prove a consistant 1/200 conversion ratio to the network operators... period. They flock to the networks because they desire free traffic, SERP spamming partners and access to the BHO's and blackhat players. The only network who screens merchants is SAS and they have a pile of affiliates posing as merchnats too..
    Webmaster's... Mike and Charlie

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

  4. #4
    Prince of Content Vinny O'Hare's Avatar
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    We should direct them all to Safehavenschool.com and had out certificates when they graduate
    Vinny O'Hare - OPM - Contact Info email: vinny at teamloxly.com ~ 702-582-6742 Twitter

  5. #5
    ABW Ambassador
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    "What's causing this sense of urgency for merchants to rush to start affiliate programmes, before they have done much to get themselves established?"

    That's how they get established. Usually small/mid size merchants starting out today, especially if they're an online only merchant could really use an affiliate program to jump start their business.

  6. #6
    Moderator MichaelColey's Avatar
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    Great questions!

    Quote Originally Posted by asr_guy
    From most of the research I have read, affiliate marketing can give a 15-20% lift in your revenue and that's well after you are established and have optimized your traffic and conversions.
    That's with established merchants. With new merchants, you can build the revenue entirely from affiliate marketing. I know a few merchants whose goal is to have all of their revenue come through affiliates. I think is a bit foolish, though. There's no reason to neglect SEO, PPC, word of mouth, and even conventional advertising.

    Quote Originally Posted by asr_guy
    What's causing this sense of urgency for merchants to rush to start affiliate programmes, before they have done much to get themselves established?
    Why? Because affiliate marketing is the most effective form of paid marketing out there. Nowhere else are you guaranteed results for the money you spend. Many new merchants are pretty clueless about exactly how to run an affiliate program, but they recognize the importance.

    I think this is where OPMs and training classes can really help.
    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

  7. #7
    ABW Ambassador Greg Rice's Avatar
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    I think this is where OPMs and training classes can really help.
    And ABestWeb. New merchants can be a good opportunity for affiliates too, new product line, less competing affiliates. I wouldn't discount a merchant just because they're new, you should look at the entire offering. I also think it's good that "newbie" merchants come to ABW and ask questions-better here than getting advice from those who may lead them astray into the darkside of parasites and the like. Granted, I see some ask questions I would never admit not knowing the answer to but if they need to ask such questions, what better place than ABW?
    Greg Rice Affiliate Program Management
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  8. #8
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    I look at it like hiring a sales force. I eventually would like to become a merchant myself, and the first place I'm going to target for some affiliates is here. What's the hardest part of affiliate marketing for many? In my opinion it's getting good traffic. A new merchant just has to share the income and they have a large source of traffic right here.

    Besides, even if the company is new, if they know the value of affiliates they will hopefully cater to them very well. It's a win win situation for both parties involved.

  9. #9
    Resident Genius and Staunch Capitalist Leader's Avatar
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    The rush to open a program is simple to explain, at least for me:

    TRAFFIC and SALES.

    Better (and faster) to get affiliates, than to try to force the merchant site itself to the top of the SERPs.

    Also, the conversion ratio from aff traffic is better than that from direct traffic.

    While I agree with Michael Coley that other avenues of making sales should be pursued by merchants, it's just dumb, IMO, to not have an affiliate program right away! The more channels sales can come in through, the better!
    There is no knowledge that is not power. ~Hemingway

  10. #10
    Member Chocolate_Chicken's Avatar
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    "prove a consistant 1/200 conversion ratio"


  11. #11
    Super Sh!t Stirrer SSanf's Avatar
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    Quote Originally Posted by ecomcity
    till they can prove a consistant 1/200 conversion ratio to the network operators
    Mike that is just dumb.

    Some referals come from where there is only one product on the page. Those would be highly targeted.

    Some come from pages with a hundred products on the page where a prospective customer may click back and forth from merchant to affiliate looking at different items shown on the affiliate site. Those are somewhat targeted.

    Some affiliate sites tell you everything about the products so that the customer doesn't need to click through to the merchant to "learn more". Others only show the image forcing the customer to go to the merchant site where they might just buy something.

    Some have pre-sale, some don't. Some show the prices before the customer clicks through. Some don't.

    ALL these things affect the affiliate's conversion ratios. Some affiates may have a 1/1200 conversion ratio yet out sell a site with a 1/200 conversion ratio.

    I have one site that has 6 clicks per sale! And, it is consistantly so year around. But, I do assure you that there are sites that out sale it with a 1/600 conversion ratio! So, do you think to improve his lot, the merchant should drop the 1/600 site and just keep me??? Boy, would he have a grand conversion ratio, then!

    How many and what kinds of affiliates the merchant attracts will deeply impact the merchant's conversion ratio.

    Stop assuming that everyone approaches things the same way you do because it just ain't so!

    What you suggest as the end all, be all criteria for choosing a merchant is not only wrong, it is also unfair to the merchants and to the affiliates with a lower conversion ratio that the uninformed and newer merchants may be tempted to drop in order to artificially inflate their conversion ratios to satisfy the likes of you!

    That may be your criteria for choosing a merchant but it is a very far cry from a good one for everyone. I suggest that you try merchants and if they don't convert at that level for YOU that YOU drop them.

    Fortunately, the networks won't pay any attention to such suggestions. They KNOW better.
    Last edited by SSanf; December 23rd, 2005 at 09:00 AM.
    Comments are opinion unless otherwise noted. Remember, pillage first. Then burn. Half of all people in the world have IQs under 100. You best learn to trust ol' SSanf!

  12. #12
    Canadienne extraordinaire Susan's Avatar
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    Ditto to what Ssanf said..AND..SaS isn't the ONLY network that screens affiliates!

    Susan Arts
    Senior Vice President, Marketing
    Moxy Media

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