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  1. #1
    Action Jackson - King of the World
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    Overstock Jeweler Reducing Commissions
    I couldn't believe this when I got the email as the people that run them are usually so good to affiliates but this has to be a bonehead move.

  2. #2
    ABW Ambassador
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    From what to what?

  3. #3
    Action Jackson - King of the World
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    Don't quote me but I think it might be from 15% to 12%

  4. #4
    Full Member
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    January 18th, 2005
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    Doesn't necessarily have to be a bonehead move. Maybe with the old commission rate they were losing money and they just had to cut the commission rate. Who knows.

    Of course I prefer a higher commission rate too

  5. #5
    Action Jackson - King of the World
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    Not in my book. There is never a good reason to lower commissions from an affiliate perspective.

  6. #6
    ABW Ambassador
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    Employees don't like it when their salary and/or benefits are cut either but they need a job.

    12% is a generous commission.

  7. #7
    Outsourced Program Manager Chris -  AMWSO's Avatar
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    January 18th, 2005
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    Hi Jack

    Allen can fill on the details as he did the work to keep the commission up as high as possible, but ultimately when the client says "guys we need to cut costs and there are three areas we can do this" the last one we want to cut is the affiliate commission, however after juggling the figures, which the client has been very open with us about, the affiliate commission came off a lot better than other costs did.

    The alternative would be to increase prices which then will reflect in reduced conversion. And our feeling was that the drop in conversion from higher prices would be of greater impact to everyone that the drop to 12% commission.

    As snowman said, 12% is still a solid commission and with a conversion of around 3% on that it's still a very solid program to support.

    Cheers

    Chris
    Affiliate Marketing by AMWSO. Skype - chrissanderson ::: TEL 1-720-336-1784 ::: www.amwso.net
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  8. #8
    Classic Rocker Mack's Avatar
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    If you had to choose between lowering the commissions and staying in business and retaining the ability to pay your bills, or let your expenses exceed your income and go broke and not be able to pay anyone anything, which would you choose? They had to make a business decision. Now you have to make one by deciding to continue promoting them or not. Happens every day, all day long.

  9. #9
    Outsourced Program Manager Allen - AMWSO's Avatar
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    January 18th, 2005
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    Hi Everyone,

    Lowering commissions by 3% to 12% per sale was a very difficult decision to make for the Overstock Jeweler affiliate program, however, we were operating at a loss when calculating all of our incentives together; including our initial 30-50% discount off retail, our 10% new customer discount for affiliates and our free shipping offer for orders $60 or over; network fees etc.

    I wrangled with the merchant to make the reduction as little as possible, so that the program can operate profitably, and 3% is what we settled on. This honestly was the best compromise for the long-term and that's good news for partners.

    Cheers,

    Allen
    [SIZE=1][B]Allen Miller. Affiliate Manager, EZvacuum.com / UnitedShades.com[/B]
    [/SIZE]

  10. #10
    Full Member clyderose's Avatar
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    Sorry to hear about that....

    Jackson a merchant pays 20% Comm to affiliate, then they pay 20% of that commision to the network. The cost works out to 24% for the merchant, plus the credit card charges for every auto deposit (transaction)

    So keep in mind you may be making more money than merchants! Sometimes merchants need to take steps like these to make sure they can run a profitable program.

    Especially if it was designed a long time ago!

    All the best Chris!
    [B][URL=http://ablogfullofgames.blogspot.com/]Blog Games[/URL]
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