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  1. #1
    ABW Ambassador Rick McGrath's Avatar
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    Question...

    I have a contact at a top name brand manufacturer (XYZ)that is interested in participating with affiliate partners to gain XYZ brand presence online and channel
    buyers for XYZ brand products to their e-tailers.

    This brand marketer still has concerns with channel conflict (selling online in competition with the distribution channel) and is attempting to create a program to utilize the web to successfully sell the
    XYZ brand.

    He's asked me to post this concept to the forum for feedback. As a brand manufacturer XYZ would be willing to provided partners additional 'bonus' rev share for promoting or co-branding the XYZ brand with online
    merchants when XYZ products are sold.

    He would like to know:

    1) would affiliate partners be interested in such a program?
    2) could a program cost effectively be launched?
    3) what hurdles could be foreseen?

    Any other ideas reflecting how brand marketers could work with affiliate partners to sell XYZ brand specific products without selling direct would greatly be appreciated.

    I'd appreciate your feed back.
    Thanks, [img]/infopop/emoticons/icon_wink.gif[/img]
    Rick

  2. #2
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    I'm having trouble following what the person wants to do differently from the traditional affiliate program... does he want to partner with an existing merchant? And if that's it, how does that affect the affiliates?

  3. #3
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    Rich,

    Ah..he wants to sell thru affiliates but not direct. He wants something on the order of an online distributor with big reach. Right?

    One of the BIG problems with online marketing is that it is so circular, it's hard to protect existing channels and the like.

    Can it be done...I think so... cost effectively you bet...biggest hurdle is believing it will work and how to structure the payout to affiliates.

    Plus it depends on the type of products and who pays the shipping and does the fulfillment.

    But the real key is what are they willing to pay to get a paying customer or for that matter a name, address, phone and email address.

    Am I going to give the FREE advice on how to do and what to do ...NOT Quite...but you can probably get the whole thing up and running for $5,000 to $10,000...throw in about $20,000 for on and offline advertising and PR and go from there. You could run the whole show with 3 people plus the fulfillment people. How many affiliates could you get - beaucoup - more than Mickey D's has locations.

    You could probably mickey mouse it for about $1,000 but then it may not be on a scale they need.

    I can do it all by Labor day if I don't have to play corporate BS. Will it work. In a heart beat, you hire the right people to do the right stuff and go to the bank.

    Let me know...as the old Apple commercial,
    how do we do that...hire me and I'll tell you.

  4. #4
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    It seems like we're seeking to crack the secret formula for brand marketing online; and looking for the successes of affiliate markeitng to lead the way.

    Interesting points but, are brand marketers ever going to be able to sell direct online to consumers without basturdizing traditional distribution (Home Depot blasted Black & Decker for this about 2 years ago).

    I don't think so - not in this lifetime.

  5. #5
    ABW Founder Haiko de Poel, Jr.'s Avatar
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    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by Cedric:
    I'm having trouble following what the person wants to do differently from the traditional affiliate program... does he want to partner with an existing merchant? And if that's it, how does that affect the affiliates?<HR></BLOCKQUOTE>

    Ditto ... I need more input.

    Haiko

  6. #6
    ABW Ambassador Rick McGrath's Avatar
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    I was hoping to get some insight for this brand manager buddy of mine. We'd been talking about the success or our partner program which is where the question comes from.

    I believe what's happening is that the Brand manager is looking to see if there's a way to directly participate in "affiliate marketing" and leverage the obvious benefit without damaging their primary distribution channels, specifically storefront retail, as I understand.

    An example we have at JC Whitney is we work with a major household name manufacture who manufactures the fabric for the single best selling premium quality car covers available. They don't sell directly to the public but through retail distributors of whom we're the single largest seller online. They've an ad-budget and naturally want to try and boost sales, online and otherwise. Because we deliver the most sales we get priority placement in their email, print and radio, package inserts etc. but in order not to alienate their other retailers they have secondary placement. They're currently promoting our cobranded URL but their not doing any "affiliate" marketing.

    Frankly I'm trying to get my brain around this myself. Could not the brand manager provide support an affiliate marketing campaign offer directing sales to "participating" online merchants that carry their product? I -think- we're assuming the Brand Manufacturer wants to continue to support their existing channels not go around them and sell direct. I'd assume that as long as each participating online retailer included the identifier on their transaction page to recognize the cookie the affiliate's happy, the merchant's happy and the Brand Manager's happy.

    Perhaps this is already being done? Don't know. But think of all the major brands that don't sell direct that -may- be interested in leveraging "affiliate marketing".

    Rick

  7. #7
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    Rick,

    I think that the quick and dirty way would be to create a product line specifically to be branded and sold online. This way the current sales channels would see no change and the online brand could be built and sold separately through affiliate marketing. This type of strategy is used all of the time to gain market share. Why do you think that General Motors and Ford sold different brands within their umbrellas? Same thing with the cereal companies.

    My wife works for a company that manufactures additives to major household products manufacturers. The exact same products that they sell to the big boys they market under different names and catalog numbers to smaller companies.

    HTH,

    Mike

  8. #8
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    Rick,

    Evil just gave you one way to do it.

    Not to be a wise guy, but what you are really asking for is worth serious money and you want us to give it to you for FREE.

    What are you willing to give up to get the answer?

    I know how to do it...Mike at ecomcity probably does to.

    Send money and I will show you exactly how to do what it is your buddy wants to do.

    "But think of all the major brands that don't sell direct that -may- be interested in leveraging "affiliate marketing".

    I have...which is why I am not telling you unless you pay.

  9. #9
    ABW Ambassador Rick McGrath's Avatar
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    Dr. Evil, Professor, Thanks. [img]/infopop/emoticons/icon_smile.gif[/img]
    I'm not trying to get something for nuttin'. Just thought it would be good for the community to see more of these sorts of Marketers participating. Just trying to make a case for him to give it a shot.

    Professor, I've several friends who are consultants and I'm always very careful -not- to pick their brain unless I'm paying as that's how they make their living. That was not my intent. I'll leave it to my brand marketer buddy to choose professional consultation if they can be motivated to explore the possibilities.

    Thanks,
    Rick

    [ 06-24-2002: Message edited by: Rick - JC Whitney ]

  10. #10
    ABW Ambassador
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    >I think that the quick and dirty way would be to create a product line specifically to be branded and sold online.

    SO CLEAN
    SO SIMPLE
    Send 20% commission to Dr. Evil

  11. #11
    ABW Ambassador
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    Rick,

    I'll send you my address. [img]/infopop/emoticons/icon_wink.gif[/img]

    Mike

  12. #12
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    I have set up sites that service BOTH their branded resellers and end-user sales for the same products. The computer distributor sites always had this same senerio since they knew that most of their sales were channeled through their resellers. My solution their was to web enable their e-catalog to book sales to the resellers ( lower prices) as well as allow the resellers with web sites to tie into their e-catalog with affiliate sales tracking to book sales & commissions direct to end users.

    One site I did was trying to streamline order processing on their patented hardware store items which were sold to large chain retail stores ( Ace Hardware Home Depot etc) small independents and home repair mom-n-pop contractors. All had different wholesale prices.

    The manufacturer wanted to signup more hardware chain stores and reach independents without infringing on the Mass retailer and branding campaigns. I also advised them to build a simple online database of local storefronts where the end-user could jump in their car and buy. The end-user could buy online and their info given to the local stocking partners for followup. One e-catalog served all parties as to displaying the correct prices based upon login username/password.

    The automative warehouse distributor sells to a variety of resell outlets from parts stores to gas stations..correct? Every damn one of them EXCEPT the warehouse distributor advertises with shelf space the BRAND. If I take the brand and place it on Jeff Gordon's NASCAR racer would your brand be enhanced. Would it sell on a NASCAR related site as well as a general auto parts site? Brand has everything to do with public awareness advertising and has nothing to do with limited channel distribution.

    Your man just wants to assure his bread-n-butter channel they aren't playing an end-run and going consumer direct. If the product stinks they'd best stick with the suckers still stocking it. If it excells over the competition then web enable it. I can make a web site and publish within 2% what you pay for every part you carry. Nothing is hidden or proprietary on the net. If the item sells for under 100.00 it's a commodity and very few branders like SONY can get away with restricting distribution channels. "Classic Car Wax" sure isn't SONY and the manufacturer would benefit over competitive choices buy allowing affiliate sales.

    If the Brander only wants to advertise via web affiliates then tell him to save his money. We only want to showcase superior products at better than local store prices or the savvy shopper just buys local.

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