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  1. #1
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    What is the benefit to a merchant to partner with a rebate site?

    Right now some of these properties are huge. HUGE. John Doe is shopping for Widgets, and he is a loyal WEbates user, and a cybertightwad, and so of course he starts his shopping at WEbates. If I (Widgetco) am the only merchant not listed there, well that is pretty bad for me! Obviously there is a good chance John Doe will find what he wants over at Widgets-R-US, get his 2% rebate, and all is good.

    This of course relies on the fact that WEbates is a huge property and that most of my competitors are already listed in WEbates list of merchants.


    But what about the case where I advertise Widgetco in a more traditional media, via PPC, or whatever.
    Or, better yet, Jane Doe is a loyal Widgetco shopper. Maybe she shops in my brick and mortar or whatever.
    Jane Doe decides to impulse buy some widgets and surfs over to www.widgetco.com and dumps them in her cart. Being the super shopper she is, she remembers that she may be able to get a measly little bit of her purchase price back in the form of a rebate 3 months down the line if she goes over to WEbates and then clicks back through to Widgetco. (Or maybe she isn't such a savvy shopper with such a great memory, but, WEbates somehow alerts her to this fact..)

    How is this beneficial to Widgetco? Also.. that hot 10% off coupon that Widgets-R-Us.com is offering over at WEbates may just lure her away. (Ok.. I see benefit to someone here..)

    Ok, same situation. Jane, the lane Widgetco shopper, and, now, loyal WEbates shopper, wants to purchase some widgets. Goes to WEbates. But Widgetco is not listed. Uh Oh.. no Widgetco? Why not try out GreatWidgets.com. WEbates sure seems to recommend them. And looky here a $5 new customer coupon and 3% rebate! Hmm. Poor Widgetco.

    So, is it just a mob mentality? Early on, in the old days when most programs were on auto approve, WEbates built up quite a list of partners, and, spent a load of VC of their own acquiring loyal customers. Plus, well, all the cheapasses on the net of course advertised for them by word of mouth. Now to be a merchant and NOT be listed could be passing on a major source of revenue. Is this all it is?

    I basically just do not understand the benefit to a merchant of paying commissions on sales which, for lack of a rebate site, would not necessarily be commissionable sales. The sales commission was not originally intended to be given to the customer, but, to someone for generating the action of the sale.

    Other problems I see:
    Isn't this just building loyalty to WEbates? Not for Widgetco, Widgets-R-US, or anyone else? Similar to my earlier analogy, being Widgetco, do I have to keep paying WEbates, or, forget about it? All my so called loyal customers weren't truly loyal..they were just loyal to the 2% I was giving them indirectly through WEbates.

    I'm sure that in some cases due to software misconfiguration, customer error, parasitic activity, competing loyalty programs, or just planetary alignment, the sale is not tracked, or not tracked as the customer expects. Then no rebate shows up in customer account. Customer should ***** to WEbates, but, how many also complain to Widgets-R-US? How many see the rebate as coming from them?

    I remember a thread where Wayne was talking about something related to incentive sites, etc. And I don't want to misquote him, but, I believe even he admitted that merchants havent really figured out when they're doing the right thing in this regard, as far as loyalty, etc goes. (Sorry, I know I am totally bastardizing whatever you did say, Wayne.) I do tend to think anything Wayne says in regard to these programs is a little biased due to his software which can directly service these type of programs.

    I guess that I currently see the benefit to a merchant to be listed as a partner at these sites. But is it only due to the fact that their competitors are? Is that a stupid question? LOL. I guess that is common sense, to a degree.

    Does it make sense long term? Does anyone care...

    Sorry... rambling...

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    The Newer Nicer Joseph [img]/infopop/emoticons/icon_smile.gif[/img]

  2. #2
    ABW Founder Haiko de Poel, Jr.'s Avatar
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    [Moved to the Midnight Café]

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  3. #3
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    At one point there was a grocery store that had an idea. Offer up a card and give rebates to consumers who have the card and charge full prices if they don't have the card.

    The grocery store initially gained lots of customers and for customers dumb enough not to get the card the merchant only profited more.

    Eventually, another grocery company got their own card, and then another did the same, etc, etc, etc.

    Did the grocery stroes increase their profitibility by doing this?

    I say nope - While initially, there was a competitive advantage it was eventually lost and could be said that now - they have reduced their overall profitability and raised consumers awareness of going to specific grocery stores for specific purchases and consumers are willing to do more traveling and time shopping to save the money.

    Will the online industry be any different? I doubt it. Ahhhh but just as I outlined much earlier.... do you ever see a consumer in a grocery stroe with a single coupon? Heck no - they have a fistfull of them.

    Whats going to happen when consumers get screwed by having multiple BHO apps on their PC's all trying to compete with other on the PC to divert a single sale. Pure Pandimonium thats what.

    Is the consumers balance going to be credited for one or all of the parasites? We know that answer but consumers don't.

    What will happen when millions of consumers start screaming scam and they have been stolen out of their promised rebates?

    It's a scary thought - how much value will be gained by participating merchants is very questionable.

  4. #4
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    Joeseph,

    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR> I remember a thread where Wayne was talking about something related to incentive sites, etc. And I don't want to misquote him, but, I believe even he admitted that merchants havent really figured out when they're doing the right thing in this regard, as far as loyalty, etc goes. (Sorry, I know I am totally bastardizing whatever you did say, Wayne.) I do tend to think anything Wayne says in regard to these programs is a little biased due to his software which can directly service these type of programs. <HR></BLOCKQUOTE>

    You got it pretty close Joesph. Incentive sites DO strip loyalty from merchants (those with a brand)- that is their intent. That should be EVERY affiliates intent.

    Your job is to make as many repeat sales as you can. You do this by making surfers loyal to you and not the merchant. I fully support that because it makes income streams sustainable and predictable for affiliates.

    For example a pricing agent builds loyalty by delivering best prices, a review site builds loyalty by giving solid reviews (it can damage loyalty by recommending crap), likewise an incentive site leverages a merchant's loyalty by giving an incentive i.e. money to your kids education.

    An affiliate can even leverage a merchant's brand equity or loyalty by bidding on terms for that brand or putting a brand in their title pages...

    I am not biased because we load extended level tracking data, I am biased because I know loyalty shopping works and consumers gravitate to it. I use my Contentintal Mastercard all the time- because I get frequent flyer miles- even before I use my Private Client card from National City.

    In terms of merchants working with loyalty programs I view it like a game of RISK, and I think other merchants do too. If you do not occupy a territory your enemy will.

    In terms of merchants with a lack of or a weak brand working with loyalty merchants is usually a direct marketing win for them since loyalty sites can drive sales. The same for who merchants who sell comodity goods that are not brand dependant.


    regards,
    Wayne

    Wayne Porter
    V.P. Product Development
    AffTrack LLC.
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  5. #5
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    Rebates are not always paid for by the manufacturer but a third party that wants access to the buyers of product x, usually because they fit a certain demographic.

    Grocery cards are much more devious, not only do they give you a discount if you use them, but it then becomes quite easy to extrapolate what your family is likely to buy in the future. It gives them the ability to know that if X product goes on sale then Y product (which is not on sale) will sell like crazy also. (beer and diapers is the classic example of this, one store found that if they put diapers on sale they sold more beer).

    Greg

  6. #6
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    I've been wondering myself why so many merchants seem to think that rebate sites are doing them a favor. Why not just put a window.open statement in the page and create your own rebate?

    If a rebate site offers a 10% discount, the merchant pays them a 20% commission and the affiliate network(in the case of CJ) another 6% on top of that. Paying 26% to offer a 10% discount? Makes as much sense to me as spending $2mil to put a sock puppet ad on the Super Bowl.

    Especially since the incentive sites are using browser plugins that give rebates to many customers who were about to buy anyway.

    One theory is that the affiliate manager in large corporations knows that his company is losing out, but doesn't mind grabbing business from other channels because his boss doesn't have a clue.

    John Hoge
    SeaEagle.com
    (parasite free)

  7. #7
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    John said:

    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR> I've been wondering myself why so many merchants seem to think that rebate sites are doing them a favor. Why not just put a window.open statement in the page and create your own rebate? <HR></BLOCKQUOTE>


    Part of what you are paying affiliate rebate sites to do is to attract customers. Now if you feel you have the reach to match or supercede the collective reach of the rebate sites out there then offering your own rebate is great.

    Do you that kind of reach? I seriously doubt it.

    Are you going to aggregate rebates for these customers? Probably not.

    Incentive sites serve a purpose and for many merchants the sales they drive is worth the trade-off. Removing a niche merchant like SeaEagle from rebate sites is fine, but sooner or later one of your competitors is going to come along and take that real estate.


    regards,
    Wayne

    Wayne Porter
    V.P. Product Development
    AffTrack LLC.
    http://www.afftrack.com
    http://www.revtrends.com
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  8. #8
    Member mrmerchant's Avatar
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    Wayne - you're right. If SeaEagle can reach the millions that the rebate sites do, then more power to them. Part of the value prop that loyalty and rebate sites offer is that (and this time of year is a perfect example) people go there FIRST to do their shopping. Do they go there to browse? Yes. Do they go there to buy inflatable boats/kayaks? Yes. In fact, back in the summer, I did just that. Being ignorant to the Sea Eagle brand, I went to Sports Authority, Gaylans, etc. and saw their offerings. I then went to Google and explored for "inflatable kayaks"... to see if there was an off brand I may be missing (with a more durable product) and found Sea Eagle. I LOVED the product offerings. Being a savvy shopper, I thought to myself - hey, I don't want to pay full price. I wonder if they have an affiliate program and if I can find them in eBates (of which I'm a member). Sure enough, they did.

    John, in all honesty the product you offer is superior for my purposes but would you have closed the sale that day - or at all - if it weren't for my price sensitivity AND your relationship with eBates / your affiliate program? Nope. So... when you say...

    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Especially since the incentive sites are using browser plugins that give rebates to many customers who were about to buy anyway.

    <HR></BLOCKQUOTE>

    ... I'd ask for you to reconsider. This was not the case with me. I was browsing. The discount sealed the deal. Also, I've done nothing but promote your goods since hooking up and making my purchase. Out on the water, people ask me what I think of the boat - its specs, weight, durability, warrantee, etc. I hand out the URL all the time. I bring my catalog to parties and show people your selection. I'm a great customer, not just a cheap SOB interested in purely $$'s off! ;-)

  9. #9
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    Well that is quite a coincidence.

    [This message was edited by Joseph Monuit on December 11, 2002 at 07:04 PM.]

  10. #10
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    Wayne,

    Thanks for your insight. When I posted I had hoped you would reply. As someone without much of a background in business, and zero background in being an incentive affiliate (at least when the incentive is something tangible like cash back), its hard to grasp the benefit of some of these models to merchants (and this channel).

  11. #11
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    Some rebate sites, whether or not they benefit the businesses, can be used to make money. For example, Treasure Trooper has a lot of free offers that you can get cash from. I would be carefull though. Although some look very legit, some look like the spam might not be worth it.

  12. #12
    Pimp Duck popdawg's Avatar
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    Could you find an older thread?
    Do you need to post an affiliate link?
    Can you not read rules?
    Are all your forks corked?
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  13. #13
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    The board spammers link set off my Browser shields and hung up my system. Typical of all Wayne and Mr. Merchants client base of Adwhore incenters. Their combined wisdom can't realize incentive loyality marketing Adwhores brought the entire American Auto Industry into Bankrupsy with the failed logic. Don't drink this coolaid as every scam on the internet begins and ends with fingers pointing at incentive pushers. The merchants go belly up and they have another sucker in place to do the nasty on them.
    Webmaster's... Mike and Charlie

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  14. #14
    What's the word? Rhia7's Avatar
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    Quote Originally Posted by ecomcity
    The board spammers link set off my Browser shields and hung up my system.
    Thanks for the warning, I'll stay away from Treasure Trooper

    It doesn't sound super duper
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