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  1. #1
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    OK folks. I am taking a break from the industry meeting to discuss a concept that a client floated by me today.

    This client wanted to know if affiliates (both large and small) would prefer to have their own stores and private label drop shipped products.

    In a nutshell this means:

    The website is under the affiliate's name
    The URL is the affiliate's (hosted on their servers)
    The phone is answered in the affiliate's name
    The products are labeled in the affiliate's sites name when shipped
    The affiliate can run their own affiliate program from this site.

    The mother company handles all fullfillment, shipping and billing. They would host the site. The products would be speciality products and all have high margins.

    VStore tried something similiar but the products had razor thin margins and often someplace like Amazon would outprice them. It really wasn't a good deal for affiliates. These products would be niche and have serious margins. Affiliates would be able to customize their stores to a high degree and it would require some knowledge of design.

    So would affiliates be interested in this?

    Would affiliates pay a fee to own these sites? The fee would be more to keep people who are not serious out and would be waived if a webmaster could demonstrate they drive traffic and revenue.

    Is there two or three quaified folks who would want to beta test such a system. You can e-mail me if that is the case. Any other feedback is welcome.

    Thanks,
    Wayne

    Wayne Porter
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  2. #2
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    I've even seen ideas just like this already being promoted on television. While it initially sounds good, being an affiliate doesn't require the necessities arising from a droppshipping arrangement, like merchant account, etc.

    At that point . . does the affiliate STOP being an affiliate and then become the merchant? I think so. Anything short of that would not be a true dropshipping arrangement, just another middleman.

  3. #3
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    Cyclone,

    I guess it would be similiar only affiliates aren't making capital outlays at first. It is true drop shipping and there would be robust stats, traffic analysis, etc. But it goes a step further since the phone is branded, the labels, etc.

    I think this merchant wants to differentiate themselves from the pack by giving affiliates powerful tools. The question is- do affiliates want this?

    -wayne

  4. #4
    Crazy Cat Lady Heidi's Avatar
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    Wayne,

    Grower Flowers offers something similiar to this. You buy your domain name and they set it up on their servers based on the template you choose (only ones they have made but a decent selection), you can set your own prices, you can include your own personal touches with the flowers sent and when they do their mailing list previous customers are sent specials and such with your affiliate id/web site embedded in them.

    They don't offer a sub affiliate program or an affiliate program that you can run off your own flower web site though.

    You can see all the things they offer/do here: http://www.growerflowers.com/affiliate/

    Heidi
    Fit2a-t: The Center of the T-shirt Universe!

  5. #5
    ABW Founder Haiko de Poel, Jr.'s Avatar
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    Sounds like what Overstock will release.

    <font size="2" face="Verdana">Haiko


    The secret of success is constancy of purpose. ~ Disraeli
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  6. #6
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    Thanks Heidi. Very useful.

    Thanks Haiko.

    Do you know if Overstock is going to be complete private label or co-branded? co-branding doesn't interest me as it usually doesn't work.


    -wayne

  7. #7
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    The number two problem with dealing with droppshippers (no.1 being merchant accounts) is that dropshippers have been known to *attempt to capture the customers once the order is placed.

    I'm not saying all do this, but it is a risky proposition when the possibility exists along the same time as paying the fees for merchant account.

    Perhaps I'm not understanding your meaning of affiliate. But my thinking is that IF I have to have a merchant account for doing business with a TRUE droppshipper, the WHY would I need to go through your guy?

    Honestly . . . I have a directory at my disposal for this already. Any more middlemen in the game makes for too many mouths to feed at my table.

    But I still think you might be talking about something totally different.

  8. #8
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    If your client was UPS or Fedx acting as the merchant aggregrator/dropshipper then it would fly. Every other one like vStores or GSI fell on their butts when it came to tracking sales and paying affiliates.

    Overstock seems to be a co-branded ie. powered by Overstock at iVillage AOL and MSN. They used to manage about 8000 SKUs at Amazon under a private label deal but somehow got burned by Bezos.

    WebMaster Mike

  9. #9
    ABW Founder Haiko de Poel, Jr.'s Avatar
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    Wayne,

    I do but don't know if it is fully public yet, so I can't divulge the all specifics.

    What is your client's stance towards parasiteware(TM) [as I define it]?

    <font size="2" face="Verdana">Haiko


    The secret of success is constancy of purpose. ~ Disraeli
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  10. #10
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    This is something that could potentially be interesting, but only if I were passionate about the product or could think of a creative angle to promote it that I could have fun with (but then, this is how I feel about the products I choose as a traditional affiliate, too).

    I am familar with GrowerFlowers, btw Heidi, and their program seems to have promise.

    J

  11. #11
    Crazy Cat Lady Heidi's Avatar
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    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by Janiss:
    I am familar with GrowerFlowers, btw Heidi, and their program seems to have promise.
    <HR></BLOCKQUOTE>

    Yes I always thought so too. I've not had the sales I would have liked with them but I can state for a fact they do pay like clockwork regardless of the amount owed.

    I personally had flowers delivered to my mother via them and she was very impressed with what she received. Being able to buy wholesale through them as an affiliate is nice. So many of these merchants forbid us buying from our own links.

    I think there is too much competition for flowers with all the "big name" flower companies to make this one really fly (for me anyway) as with any program results will vary depending upon each affiliate and their promotion techniques.

    Not being in control of keywords and the descriptions (meta tags) is the one downfall I see with this type of offering.

    Heidi
    Fit2a-t: The Center of the T-shirt Universe!

  12. #12
    Resident Genius and Staunch Capitalist Leader's Avatar
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    Wayne, I'll have to look at this again tomorrow when I am awake enough for serious business.

    But at first glance it sounds promising, provided that:

    The website can be fully unique. No SE-unrankable templates, and I wouldn't want to be stuck with canned spin either.

    And

    There is a reputation of PAYMENT--on-time payment--to affiliates (or whatever they are calling us). If the Payment issue isn't in order, Nothing Else Matters.

    As for paying a fee, not if there's a free program with a good PAYMENT reputation, and a reputation for a lack of Reversals/returned merchandise out there already!

    Niche can be good or bad, depending on one basic thing: Who knows about it. If BUYERS know all about it, but not many sellers, that's aces. But if SELLERS know about it, while buyers have never heard of it, it's a dead dog without using tons of marketing.

    The requirement for "traffic" (to avoid the fee) bothers me. As long as the REVENUE is good, a dropshipper allowing private labeling has no reason to care or even know a site's traffic levels!

    And before I could give any really definitive answer, I'd have to know just what products were involved and do some research as to their saleability.

    More questions may strike me later but the above bang out at me.

    There is no knowledge that is not power.~~Ralph Waldo Emerson

  13. #13
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    To Haiko: Thanks. As for their stance on parasiteware? I don't publicly speak on behalf of private consulting clients. I let them speak for themselves if they choose to do so. Since independant partners would run their own operations I think it would be THEIR stance that counts.

    To Mike: I think they would use UPS. They have invested several million in fullfillment centers so they have the capabilities to track and to scale.

    To Cyclone: I don't think they want to capture the customer at all. The really want to power other sites and use the advantage of their ability to scale. They would provide the merchant account.

    To Heidi: Webmasters would have ultimate control over their own keywords, metas, and in some cases descriptions. There is no need for clunky templates and things can be built from ground up.

    To Leader:

    Technology: There would be a complete set of tools for SEO savvy people. No clunky templates unless folks wanted a template. I have looked and kicked their tires, it still needs work to meet my standards but I found it pretty impressive in terms of flexability and scalability. The back end stats were pretty robust too.

    Payment- the client has a solid payment history or I wouldn't consult for them. (Afterall they have to pay our fees. [img]/infopop/emoticons/icon_wink.gif[/img])

    Niche- The niches are proven and in some cases new products. All sport good margins (one of my criteria for good affiliate marketing).

    Traffic Requirements- Just a suggestion. The idea is not to have every person with a whim to do it, but to appeal to serious entrepreneurs. Often I have found just tacking on a $20 fee scares off the casual seekers. There has to be a bar somewhere to tempt powerhitters. Anyone who won't invest $20 in their business isn't serious IMHO.

    The feedback is great- many thanks. Realize that this is in the research phase. They have the capabilities but want to gauge interest.

    -Wayne

    Wayne Porter
    V.P. Product Development
    AffTrack LLC.
    http://www.afftrack.com
    http://www.revtrends.com
    Advanced & Automated Data Analysis for Performance Marketers.

  14. #14
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    I think this sounds like a good idea if the merchant is serious about it and is willing to do it over the longer term. Certainly worth taking a look at.

    If this merchant happens to sell things that can work into my site fairly well, this would be an interesting thing to look into.

  15. #15
    ABW Ambassador mailman's Avatar
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    This idea has a lot of merit and I have thought so for many years.The principles of retailing still have to apply to selling on the internet and one of these is customer service.We are all trying to compete against millions of sites for revenue.Let's say you live in a city of 800,000 people like I do,that's a lot of potential customers. If one zero's in on this market you could develop a good client base. All the differant aspects of advertising become cheaper such as newspaper,flyers and even radio.The most important point is that consumers can get in touch with you very easly.
    "Sometimes we can't see the forest for the trees"

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  16. #16
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    I've always been a big fan of branded stores...I used to do very well with ubrandit before they changed their focus to something else...then tried vstores and sales dropped considerably...I would be interested in something like this depending on the products that are sold...we have a variety of sites from different niche so we could probably get them in somewhere...again, depending on the products offered.

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  17. #17
    Defender of Truth, Justice and the Affiliate Way
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    Sounds like the idea has potential. I would definitely need more specific information, but let's say it would be worth a good look. A couple of thoughts. [img]/infopop/emoticons/icon_smile.gif[/img]

    I would have to have a good knowledge about the company and how the operate (ie customer service, quality of products, inventory management, etc) because even though they would handling all the details of order fulfillment, it would be my name out there. Basically, they would be my entire "backend" of the business, and the customer on my site wouldn't know what is going on in their minds it would be me selling to them. Think you get the point. Not meaning anything negative about whoever this client is for you, but just saying that who the person is making such an offer could make me turn away from the offer where if it came from another merchant I would be ready in a flash.

    Having them doing the billing I think would be a very big plus factor over other types of dropship arrangements. Many affiliates do not have those capabilities in place. It negates any liabilities associated with a merchant account if the affiliate is having handling the billing and someone else is handling all the order fulfillment.

    I would also want more info (of course) about how payment is handled and since they handle all phone queries, how tracking is handled on orders placed via phone.

    I would also need to know what systems are in place for me to have easy contact with the merchant. Preferably I would like to at least 2 readily available contacts within the company. Even though they are providing phone service, customers will still email inquiries (status of order or more info about products). I would want readily available contact within the company to be able to respond to such questions. Good customer service is a big plus when selling online and I would have to know that a reliable effective system is there to be able to provide that.

    And I realize you can't say what the products are, but as other have stated it would also depend what the products are. [img]/infopop/emoticons/icon_smile.gif[/img]

    Just a sidebar about dropshipping from my own personal experience. I have a small ecommerce site. Sell my own products, do all my billing, shipping etc. As time progressed I started developing a closer relationship with one particular supplier. As time progressed and I started doing more business with them, they started to offer drop shipping for me. But I was seeing quite a few problems with their own internal procedures that were already causing me headaches like serious delays in just getting my orders to me. I had several discussions with the owner of the company which resulted in several policy changes within their company which in turn improved our working relationship. Initially, I would have never stuck my merchant account out on the line with possible chargeback complaints and non compliance with MOTO guidelines. But through productive communication problems have been addressed and things are running smoothly from my perspective and internally for them as well. I have just started adding some of their products to my site for dropshipping which is working nicely so far. I'm able to add higher ticket items without having to put out the capital in inventory stock. They are making more money, and I'm making more money. I bring this up because I know a few board members are starting to look at drop shipping. If you are the one doing the billing, get to know the supplier well. Have well established communication line. Depending on the company you are dealing with, it can be a lucrative arrangement for both parties or a huge headache for you.

    Keep Your Hands Off My Cookies

  18. #18
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    I wouldn't pay to sell their products. They should offer a fee waiver to proven sites they know will be "serious" about it, or else make it by private-invite.

  19. #19
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    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>
    I don't publicly speak on behalf of private consulting clients. I let them speak for themselves if they choose to do so.<HR></BLOCKQUOTE>

    Who started this thread?

  20. #20
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    It sounds like a great idea. I seems to combine the best aspects of affiliate marketing and drop shipping. Obviously there are details to work out but overall it sounds like it is a good way to go.

  21. #21
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    So would affiliates be interested in this?
    YES
    Would affiliates pay a fee to own these sites?
    YES
    Is there two or three quaified folks who would want to beta test such a system.
    YES

    adam_ward@googleguy.com

  22. #22
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    O.K. here’s my 2 cents on the subject which is a very good subject. [img]/infopop/emoticons/icon_wink.gif[/img]

    We have implemented a similar concept for some time now and it works quite well.

    We sell Lingerie and have a affiliate program through shareasale. For our "super affiliates" and those affiliates who wish to increase their exposure through SE optimizing we offer a " Mirror" web store. It's the same store as ours however it is under our affiliates domain name and hosted by us.

    We do all the shipping, card processing, customer service etc. All the affiliate does is run the site and direct traffic to it. Sales are in real time and both partners have full access.

    Obviously no cookies involved here and no id to play with. All orders to this site are all theirs. The benefits are as follows. The affiliate sees more sales - as much as 20% more- since there is no issue of cookies. In addition all traffic produced through SE optimization is theirs forever so if things don't work out, or the affiliate wants to try something else, at least for the affiliate all the hard work and traffic acquired is theirs. Repeat sales are a big factor. Normally a customer sees the site through a click through and cookie id. If the customer was to not buy on the first visit or buy from another computer. (for instance finds the site first at work but orders at home with no cookie id imbedded and no commission earned for the affiliate who originally brought them there). This sale is lost for the affiliate as well as repeat sales when a customer goes to the site directly without a cookie or from an expired one or non at all (turned off by user). There are many more examples but I think you get the point. This is why many affiliates like a "mirror" store.

    I don't think affiliates are as concerned with private labeling as they are about loosing sales. A mirror site eliminates this. My suggestion would be to "Mirror" sites but keep the name, shipping, customer service, etc the same. If an affiliate does not trust you whereas you would steal his/her customers well that’s a different subject.

    We have found it to be great for both parties. The affiliate sees more sales and we see more sales because the affiliate promotes the mirror site more and we give him/her a site they can promote, especially on SE's.

    As far as a separate telephone number. It depends on the product. Since Lingerie orders are not called in often - we had to only provide a separate phone number once. It’s better to call one number where the customer will get good customer service, especially when customer service for a unique product requires training.

    As far as running their own affiliate program – absolutely!

    As far as the cost. If it’s an earner who wants a “Mirror” site Give it to them – Free. If it turns out this super affiliate is not so super – just put them back in your regular program. The cost for the merchant is small. The merchant’s exposure is just bandwidth, server space, and a secure certificate, and some admin time to set it up. Simple huh!



    All in all "mirror" sites work well, very well. I do not think you have to go as far a separating shipping points, telephone numbers, company name etc. It has been our experience that the affiliate just wants a better "tool" to promote and to receive credit for every sales earned.

    Our company is currently working on automating this process. With parasites and other “cookie stealing” programs it seems to be the way to go soon. For now we do it manually. In fact, many affiliates who have been with “the big guys” or the larger brands before coming to us and setting up a mirror site have seen as much as a 20% increase in sales simply because no cookies involved. Everyone wins.

    Darlene Goldberg
    Affiliate Manager
    www.1lingeriestore.com
    (800)206-7230
    darlene@webc1.com
    www.1lingeriestore.com/affiliates.htm

  23. #23
    Super Sh!t Stirrer SSanf's Avatar
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    I might be very interested depending in the products offered. I guess you know, I am looking for Pagan, Goth, new age or 60s retro type products. But, these would include things that are environmentally friendly as well as earth centered such as gardening.

    The Wolf Credo: Respect the elders. Teach the young. Cooperate with the pack. Play when you can. Hunt when you must. Rest in between. Share your affections. Voice your feelings. Leave your mark.

  24. #24
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    The mirrored site concept works just fine and I've setup several small computer distributors with a Miva.com Mall package. They pay a one time license fee and 100.00 for each additional reseller storefront. The distributor maintains the complete Mall package on a third party host site and can download the changes in a simple CVS file format and upload it each time it changes to each resellers Miva e-catalog database. Some just make the file available to FTP so they force the computer dealers to learn how to use Internet applications and the systems they sell.

    Each reseller who want to show case their own be built clones just make a new category and populates that part themselves. They can also delete a category of products by removing that categories name from their master file. Miva supports images and text data and every category page or product page has full HTML capabilities to customize the whole shebang so possibly no two would look alike. All orders go to the drop shipper with carbons to the reseller/affiliate. Every dealer can markup or mark down select items, categories ,specials time limited sales or the entire catalog. The distributor settles with them on the difference between dealer cost and resell price every 30 days.

    Most resellers just use the online sales to offset their current balance on products shipped to their store. I guess I earned my 1000.00 fee for setting that in place and building the HTML portion of the main distributors e-catalog.

    Tyhe last two just paid 100.00 monthly to olm.net for the complete Mall licence with 10 discounted store licences and a complete Yahoo feature set call their portal ecommerce package. Some wanks in Indonesia got me to consult with them built templates and promo HTML pages and outline this same package for creating a government sponsored merchant exchange for that areas manufacturers and distributors. They then stiff me for all the work once the domain was in their hands. Most liky a Al Quaida sponsored operation.

    WebMaster Mike

  25. #25
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    Thanks everyone- I am making notes!

    Thanks Darlene- that info was very useful!


    regards,
    Wayne

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