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  1. #1
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    Thumbs down we pay up to 6% .. yah give me a break!
    You have probably seen it too

    affiliate programs that use the words " We pay Up To "

    tigerdirect for example.. we pay up to 6%..


    ok well lets look at that shall we

    $0,00 - $2,499 2%
    $2,500 - $9,999 4%
    $10,000 - $24,999 5%
    $25,000 - $49,999 5.5%
    $50,000 + 6%

    Ok first off.. 6 % is crap!.. If I bust my ass off to sell a entertainment unit that is $1000.. I want at least $400 of that bare minimum.... do you honestly think I would work my ass off to get only $60 of that $1000 item?? YEAH>> think again !!!

    Oh but... lets look at that again... shoot.. No I wouldnt get 6% would I, because according to your silly chart.. I would have to sell over 50,000 worth of product to get the measley, laughable 6%..

    So what would I get.. well its a $1000 item, I would get 2%.. WOW now thats incentive!!!. Oh please let me bend over backwards for you, waste my ppc money, spend hours working on my site.. for 2% ... please.. let me..

    that would work out too.. $20 sale from $1000.. Umm... let me see.. I get $20 and you get $980.. Oh yeah that sounds like a good partnership.. .. UMM I cant wait to get started.. where do i Sign?

    OH im going to be your best affiliate.. you wont regret this..

    Oh, and lets take into account that you might be a sleazy affiliate program and use parasites... ummm ok maybe I will make $20 after 3 months in your program.. and then of course the.. usual

    Umm sorry we had to reverse it.. because the owner didnt.. umm.. they didnt.. whatever.. we had to reverse it.. we need that $20 for beer this weekend.

    Oh ok MR merchant no problem.. You give me such a good deal at 2% I will easily make back my $20 over the next 3 months.. Wow I love this partnership.. Oh please.. no.. let me put more banners of yours over my site and links, and let me spend lots of money on ppc.. so great..

    TigerDirect.. and all the other " UP TO AFFILIATES " hint hint ZZOUNDS...im doing you a favor you losers.. time you started paying real money and not money that is usually found in the PENNY TRAY at a convienence store

    Damn I love this business!....

  2. #2
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    If I bust my ass off to sell a entertainment unit that is $1000.. I want at least $400 of that bare minimum....
    Another one that thinks merchants get their merchandise for free and there is no expenses in running a business. 40% ???

  3. #3
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    Maybe LastHope should open an affiliate program that sells computers and musical instruments and pay 40%, that would be nice. Would be nice on Fantasy Island because you wouldn't stay in business paying that, anywhere near that. If you don't like the terms, don't put up the links.

  4. #4
    CPA Network Rep Jon@Fluxads's Avatar
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    Quote Originally Posted by TrustNo1
    If you don't like the terms, don't put up the links.
    Well put.
    [B]Jon Lyons[/B]
    Director of Affiliate Operations
    [EMAIL="jon.lyons@fluxads.com"][SIZE=1]jon.lyons@fluxads.com[/SIZE][/EMAIL][SIZE=1] | 1-877-GO-2-FLUX | [URL="http://www.fluxads.com/"]FluxAds.com[/URL][/SIZE]

    [SIZE=1]LinkedIn: [URL]http://www.linkedin.com/in/jrlyons[/URL][/SIZE]

  5. #5
    Moderator MichaelColey's Avatar
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    You have to understand that margins vary tremendous from industry to industry. You'll never find 40% commissions on electronics, travel, or other low-margin industries. You'll probably never find 10% in those industries. You're lucky to find 40% commissions in high margin industries.

    But, I do agree with the rant about the tiered commissions. Ranging from 2% to 6% is far too much. Sure, reward your top tier affiliates more, but you can't treat your small affiliates like pond scum by giving them an insultingly low commission.

    I would find something like a base of 4% and a 5% tier at $1,000 much more appealing. Then, offer your higher performers a private 6% commission.

    But 2% is a slap in the face.
    Michael Coley
    Amazing-Bargains.com
     Affiliate Tips | Merchant Best Practices | Affiliate Friendly? | Couponing | CPA Networks? | ABW Tips | Activating Affiliates
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  6. #6
    Influencer Marketing GravityFed's Avatar
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    that's the biz..
    IMO 6% (or $60 from a $1000 sale) seems pretty reasonable considering there's no inventory to buy/manage/control, no fulfillment obligations; basically no overhead (unless you're paying for clicks, and a few bucks to host a site). I would think the merchant could do better than 2% baseline, but 6% isnt that bad especially if they have a nice site that converts..

  7. #7
    Full Member id2k's Avatar
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    wow...$400 of $1000....well then how much profit is the merchant making ..maybe $400..cant be less then what he is paying to a affiliate...that means the actual product cost will be what?? $150 or $200....well i guess lasthope has not done his maths for this properly....

  8. #8
    ABW Ambassador Snib's Avatar
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    Compared to other computer merchants these are actually pretty good commissions. Just look at Dell and Apple with their 1% commissions. Electronics convert really well and people tend to spend more on electronics than in other markets. At least they've set the threshold low so you only need to break $2500 in sales to reach the next level. I'd be far more disappointed if the first threshold was over 10k. To be honest I'm pretty happy with these terms now that you brought them up.

    - Scott
    Hatred stirs up strife, But love covers all transgressions.

  9. #9
    Comfortably Numb John Powell's Avatar
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    Ok first off.. 6 % is crap!.. If I bust my ass off to sell a entertainment unit that is $1000..
    I really enjoy passionate people. I feel like ole Joe Friday of Dragnet fame.
    "Give me just the facts Mame". The bottom line is that some folks have a set up that may work for a 6% commission and they're not having to bust ass. I might try and bust ass for 15% and not sell anything. It's all relative to the bottom line.

    I do wish some offers were less promo and more straight forward though.


  10. #10
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    What im getting at is not so much getting 40% but at the very least starting your affiliates at 10% if not 15%.. anything below that is just laughable.

  11. #11
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    Quote Originally Posted by FluxAds.com
    Well put.
    its not well put.. its idiotic.. .. its like saying if you dont like your goverment dont vote ... yah smart answer!

  12. #12
    ABW Ambassador Snib's Avatar
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    Quote Originally Posted by Lasthope
    What im getting at is not so much getting 40% but at the very least starting your affiliates at 10% if not 15%.. anything below that is just laughable.
    I don't think you're too familiar with commission rates for computer parts. Most merchants like Best Buy, Apple, Dell and Circuit City pay only 1% for computers. I rarely see a computer merchant offer more than 2% to 5% so in light of that TD is offering a very competitive commission rate. We're not talking shoes here where a 10 to 15% commission is possible. In electronics it just doesn't happen.

    - Scott
    Hatred stirs up strife, But love covers all transgressions.

  13. #13
    ABW Ambassador Snib's Avatar
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    Quote Originally Posted by Lasthope
    its not well put.. its idiotic.. .. its like saying if you dont like your goverment dont vote ... yah smart answer!
    TigerDirect is hardly our government.

    - Scott
    Hatred stirs up strife, But love covers all transgressions.

  14. #14
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    again unless you have hugely high traffic site, 6% isnt going to cut it

  15. #15
    ABW Ambassador JJJay's Avatar
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    Quote Originally Posted by Snib
    TigerDirect is hardly our government.

    - Scott
    tigerdirect.gov is available!!!

  16. #16
    ABW Ambassador Snib's Avatar
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    Quote Originally Posted by Lasthope
    again unless you have hugely high traffic site, 6% isnt going to cut it
    People tend to spend a lot more on electronics than you'd think. It's a huge market with a doubly huge audience. I can't wait to switch my TD links over to Linkshare just for those improved commission rates.

    - Scott
    Hatred stirs up strife, But love covers all transgressions.

  17. #17
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    Linkshare lol.. i wouldnt touch those guys with a bargepole

  18. #18
    Moderator leeann's Avatar
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    I look at the merchant...how much do they invest in their customer service, etc. I want return sales not hit and runs and only merchants running good sites will bring me that kind of business. I also look at reputation, national advertising, etc. before I decide if 4% sounds like a good start or not.

    It's the McDonalds theory I guess. Sell more for a lower profit margin and make a bunch of $$$ by selling more. Only those companies with good national reputations will bring you that kind of money and I'm not opposed to trimming my comm. expectations to take the ride along with them.
    leeann


    Shoppers determine what has value and they like coupons. Stop manipulating who set the cookie just because you do not like coupon and promotional sites.

  19. #19
    Full Member jtoskey's Avatar
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    Quote Originally Posted by Lasthope
    again unless you have hugely high traffic site, 6% isnt going to cut it
    Having worked for years for a computer hardware reseller, I can tell you that 6% is often more than most these guys make on a CPU. Hardware gross margins for resellers range from 1-10%. Software is better, from 10 - 35%, but if you think 6% is lousy, then you simply don't understand this industry.

    There are lots of other industries where margins are high enough to pay you your precious 10 or 15%. Stick to apparel or flowers.

  20. #20
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    I've been a computer VAR (value added reseller) for over 30 years. The above average after tax profit margin in H/W sales last year for all resellers was 7.4% Tigerdirect is lucky to make 10% net even on their higher margin closeout/refurb sales.
    Webmaster's... Mike and Charlie

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  21. #21
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    Electronics and Computer Hardware margins are razor thin, and has cut-throat competitions - one of the reason is that items quickly get out-dated. Things need to move out fast - otherwise you are stuck with obsolete items. Most of the internet retailers compete with global markets in these categories - and price undercutting is probably the only avenue for them to keep alive. Look at the graveyard of computer / electronic retailers - only a few have made it alive, and manage to make profit.

  22. #22
    MasterMike HardwareGeek's Avatar
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    lol the guy in the first post makes me laugh lol.

    Lets see lets look at Video Games

    Wholesale a Video Game for the XBOX 360 cost 56 - 58 dollars and they sell for 60 dollars.

    Now lets say you make 40% from that sale. Where is the profit for the retailer? No where.

    1GB of ram retails for about 93 dollars. Sites like tiger direct sell it for 95. Imagine if you got 40% of that.

  23. #23
    Resident Genius and Staunch Capitalist Leader's Avatar
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    I agree with LastHope on the fact that electronics, as a category, pays pffftt commission percentages. That's why I don't bother with electronics. Elbow my way into a saturated market--for 2-6%? The heck with it. There are plenty of products with enough margin to pay a respectable (10-25%) commission; no need to deal with scraps.

    On the other hand, expecting 40% commission is a pipe dream for most products. Like Chet B said, merchandise ain't free, and there are expenses in running a business!

    COMMON BUSINESS EXPENSES:
    Merchants' advertising isn't any more free than your PPC--in fact, if they're large, they probably spend a much higher percentage on advertising than any PPC-only site (TV ads, print ads, radio ads...old-line advertising is usually hugely expensive).

    And, shipping costs plenty (even when they hide it in the price and say "free shipping").

    Not to mention the fact that almost all merchants have employees, and one the size of TigerDirect almost surely has tons of them. Each of these employees needs enough money per year to at least keep them fed, housed and with car, or else they'll quit. And, there's hidden expenses (taxes, unemployment-insurance fees, liability insurance etc.) involved in employing people, too. Usually it costs more for employees than that--health insurance is a common "benefit" of empl*yment, for instance.

    And, there's at least one dedicated building and/or warehouse involved for all but the smallest merchants--add heat, lights, phones (regular and 800 numbers), water, internet access, furniture, computers, printers (and paper & ink for them), building maintenence/repairs, insurance, property tax etc. to the overhead.

    It's the merchant who has taken the risk of being stuck with a warehouse full of unsaleable stuff. That "intangible"--risk--is worth money. Not every product sells, but unlike the affiliate, the merchant has usually already stocked an item before they find out it's a dud. Every time that happens, it's money burnt.

    Don't forget that the merchant is the one dealing with the customer service. That's hash that affs don't have to put up with. And, it requires employees too, once there are a substantial amount of customers.

    The payment processor eats a percentage of every transaction.

    Most of the biggies also spend LOTS of money on things we tend to think of as being cheap or even free. "Thawte" SSL certif rather than Joes-SSL. Oracle database instead of MySQL. Proprietary order-tracking software. Proprietary site coding. Stuff like that.

    Despite all of that, I've had no trouble finding plenty of merchants with a base rate of 10%. 40%, on the other hand, is something I've only seen on a sustained basis for items like clickbank-type software downloads, ebooks, and other things of that nature.
    There is no knowledge that is not power. ~Hemingway

  24. #24
    ABW Ambassador simcat's Avatar
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    My best 2 merchants over the last year were
    financial product paying 50%
    'recreational' product paying only 3%, but the sales average mid x,xxx

    I tend to suck at the 5-10% range merchant. I'm sure not going to target a competative area paying 1%!

  25. #25
    Affiliate Manager Blair.com's Avatar
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    Leader --

    Very nicely put. You summed it up better than I could have even dreamed of!
    Christopher Park
    Affiliate/Partnerships Manager
    Blair.com
    cjpark@blair.com
    (814)726-6074
    AIM: BLAIRAffiliates
    Twitter: BLAIRAffiliates

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