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  1. #1
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    Question Honestly would you really be an affiliate manager for Commission Only?
    From what I can tell 90+% of affiliate managers are paid Base Salary + Bonuses/commission.. base salary covering the time they give and bonus/commission on their performance from getting affiliates performing

    Recently I was offered a position to be an affiliate manager for a company who has a high priced shipped product ( 1 product ) but they only are interested in taking on board an affiliate manager who will accept commission only.. Basically you get paid when affiliates do ( sales are made )

    To me that is very skewed, as while you might be a person who says I can get the job done and you have a lot of faith in yourself to perform... there is no denying that.. there are no guarantees.. an affiliate program may just bomb or it may not perform enough to cover the hours you have had to put into it, to get sales coming in.

    When I mentioned that they seriously have to consider that before sales are generated and before their are affiliates to manage, Management is still going on, management of the area of their business that they don't want to give their own time to manage

    No matter how they want to word it, or swing it.. Time is being exchanged, Value is being Exchanged... It comes down to how much do they value your time and how much Do I value my own time

    I mean if they was to put this on a freelance site, honestly how many people would jump at a commission only job?

    Maybe I am looking at this wrong, if so feel free to bark in... but I cannot conceive giving my time to someones business in the role of affiliate manager and only getting paid when the affiliates get paid.

    Currently I am an affiliate, and sure I give my time to create sites to promote peoples products without getting paid in advance but I feel that is different as there I am not setting aside 5 hrs a day every day to seek people out and phone people

    I simply build a site and create reviews and even if i dont make sales from the company i promote, I still have various ways to cover the time put into the site by monetizing it through adsense, inhouse advertising and other CPA offers.. Plus.. any time and focus I give to another company takes away from the time I could use to focus on my affiliate business.

    Anyway the company who is considering me for the affiliate manager position from what I can gather feels that I by not accepting a commission only position.. means have a Scarecity mindset, i.e That I think If I give my time and dont get a base salary I wont get paid

    but that could be reversed on them, .. they could have a scarcity mindset of... If I pay a base salary, i wont get the same results and sales as the effort going into the program maybe less.

    Anyway.. what are your thoughts on it all.. ? Thanks

  2. #2
    Affiliate Manager David Carter's Avatar
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    It seems like what is being offered is part ownership in the business. As an affiliate, you know that you currently have one of the few jobs with unlimited potential income. What you make is determined wholly on your determination, hard work and knowledge. If the product that the company is selling has broad appeal you should be able to make more on commission, if the deal is priced right, than on the salary/bonus model since commissions are not capped. Of course this can only happen if you are willing to accept the same risk as the owner. You have to decide if you are willing to exchange the initial time invested for the potential for unlimited return. This, of course, is a decision that only you can make. If you have the right product and you are willing to take the risk, it could be a very exciting venture.
    David Carter
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  3. #3
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    depends: do you believe in the product? have you seen there numbers? can you recruit strong affiliates? what is your cut?

    if you know what your commission rate is, and you see their affiliate sales..you should have a good handle on what you can expect. maybe this can be a good opportunity. and like you said, you run your own affiliate sites on the side. its not like if you took this job you're "all in"....

  4. #4
    Analytics Dude Kevin's Avatar
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    That's a decision you obviously need to make on your own, but I wouldn't do it anymore myself.

    There's too much work involved initially to do it for nothing. Your time is worth something. I would suggest that you build a contract that has a "minimum monthly" built into it. Once your commission exceeds that minimum monthly due to program growth, it's then essentially commission only.

    The other half of that equation is affiliate perception.

    There are some that don't want to see managers make percentage of sales, because it encourages the manager to take on affiliates that don't always play by the rules. That's bad both for the merchant and the honest affiliates.

    However, in the case of many OPMs here, we find a balance. Reputation is everything in this business. While we may make percentages on certain programs at eVendition, it's in our best long term interest to run clean programs and build trust with the affiliates here.
    Kevin Webster
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  5. #5
    Newbie SkinnyMoose's Avatar
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    Well I would look at it from the Business's perspective. As a business you don't pay someone based on how much you like them but based on results period.

    So, as a business person I wouldn't pay anybody a dime until I saw results. Why would you pay someone $200 if they are only making you $20?

    I think the affiliate manager needs to make sure their share is worthwhile. Get that percentage up there. The affiliate manager is investing their time into something they believe will generate results. Even suggest an incentive based program where if you reach a certain milestone you get a larger percentage.

    But to simply ask for a fee up front for your time is greedy, in that your time will generate you sales and that is how you get paid. SO your time "is" being paid for in commission.

    As a company I can't justify paying someone a number pulled out of the sky when you are going to pay them for their efforts anyway through commission.

  6. #6
    Outsourced Program Manager John Jupp's Avatar
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    What you should be asking yourself is this:

    Is the override being offered better than a basic monthly fee plus small override I would normally expect? How many unit sales need to be achieved to result in the same payment amount? Can I achieve that target?

    If you can answer with a figure to the second and yes to the third question then ask the first question and if the amount turns out to be greater then it's worth doing.

    Clients with whom you do not have a long relationship or who don't know you are justifiably sceptical. The first question a savvy merchant will ask is always "what do you bring to the business?" and if what you bring is small potatoes then the merchant is right to demand performance related pay only.
    Flambi Media Limited - USA/UK/EU Affiliate Management Expertise

  7. #7
    Newbie SkinnyMoose's Avatar
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    Quote Originally Posted by John Jupp
    Clients with whom you do not have a long relationship or who don't know you are justifiably sceptical. The first question a savvy merchant will ask is always "what do you bring to the business?" and if what you bring is small potatoes then the merchant is right to demand performance related pay only.
    That certainly does make sense. But I wouldn't suggest from a business's standpoint to bring someone on board as an affiliate manager if you are still skeptical.

    I guess what is bothering me the most is for someone to think that getting paid by commission is NOT the same as getting paid for their "efforts". Getting paid through commissions is getting paid isn't it? I certainly do understand the concern for affiliate managers but when you sign on you are taking a risk just like the business is. You are investing into something that you hope will pay off. Getting a percentage is a good way to claim ownership and share in the ups and downs with the business.

  8. #8
    Analytics Dude Kevin's Avatar
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    Skinny: Greedy? That's about the most senseless comment I've seen on these boards, and you've had a lot of competition for that here this week.

    Go out and take a few commission only gigs, and see how you enjoy making nothing for 5 months while the program ramps up.

    An affiliate manager that understands this business would NOT take a brand new program on commission only. A well established one, perhaps, but even doing that devalues the role of the manager.

    So you can de-value the role of the affiliate manager if you want to. It shows you don't really get it.
    Kevin Webster
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  9. #9
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    I will go somewhat against the grain and say that I would never consider a commission only aff manager position, either OPM or full-time. Never. Everyone has to make their own decisions, but to me, not getting a base is insane.

    The short version of my reasoning behind this is because at the end of the day, every merchant I have ever consulted or worked for has asked me to do many things that have no impact on affiliates actually increasing sales. Whether it is making prettier reports for management (instead of the defaults in excel), written executive summaries, reviewing copy for emails or landing pages that aren't associated with the aff program, presentations to other company internal personnel, there are always things that are outside of hammering sales.

    Additionally, given that most programs that you are coming into either need clean up done (parasites, missed deadlines, old creative scrubbed, etc) or need to be launched (or maybe just relaunched..or eek...maybe moved to a new network), there is a lot to be done before any decent improvements or commissions come in. I mean, without naming names, imagine if you took over for some of the merchants that are parasite city with terrible return days. how long does it take you just to get the perception in the community changed enough for people to sign up, let alone place links or really promote you? And right now, in near Q4? Certainly not quick enough for you to eat while you are doing essentially pro-bono PR for the company.

    Aff marketing is a legit business. Much like search or CRM marketing, you don't do stuff on commission just because somebody doesn't "get it." Odds are if you can't explain what you really do outside of purely trying to increase sales in a way that makes the company happy to pay you base, you are going to have an even harder time explaining to the merchant why they shouldn't work with parasites, should pay people on time, or shouldn't have leaks.

  10. #10
    ABW Ambassador sjangro's Avatar
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    is it an established program with a baseline that you know will produce $x for you?
    Or is it starting from scratch?

    If the latter, you'll want some minimum payment, at least until the program is running. it can take 6+ months to get a program going.

    Cutting out the minimum at some point, perhaps at the point where you reach it on a percentage basis, is an interesting option. Because then you have incentive to not only grow it, but to also not let it go.

  11. #11
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    Quote Originally Posted by SkinnyMoose
    Well I would look at it from the Business's perspective. As a business you don't pay someone based on how much you like them but based on results period.

    So, as a business person I wouldn't pay anybody a dime until I saw results. Why would you pay someone $200 if they are only making you $20?

    I think the affiliate manager needs to make sure their share is worthwhile. Get that percentage up there. The affiliate manager is investing their time into something they believe will generate results. Even suggest an incentive based program where if you reach a certain milestone you get a larger percentage.

    But to simply ask for a fee up front for your time is greedy, in that your time will generate you sales and that is how you get paid. SO your time "is" being paid for in commission.

    As a company I can't justify paying someone a number pulled out of the sky when you are going to pay them for their efforts anyway through commission.

    Well not true..

    For example.. Lets say you decided you wanted a piece of software made and your end result is you want to get sales..

    Can you imagine the response you would get if you put up an ad

    " I need a programmer to develop a C++ software made, I will pay you when I managed to sell it to people "

    You aren't going to get programmers to make it for you.. because whether or not you make sales is irrelavant... Its still going to take time to create the software.. and that time has to be paid for, otherwise they can go else where and make money

    Also you said " But to simply ask for a fee up front for your time is greedy, in that your time will generate you sales and that is how you get paid. SO your time "is" being paid for in commission."

    What planet do you LIVE ON???

    People all day long take jobs where they exchange time for money.. its not greedy its making sure you get paid for your time.. as you cant get time back.

    You misunderstanding

    Management

    and

    Performance

    They are too seperate things..

    If you are a company that spends 20 hrs a month on an area of your business and you no longer want to do that

    You have to find someone who will spend 20 hrs of their time and pay them..

    Sure you want results as thats the end goal but there are many things that occur way before SALES come in.. and that time which the company doesnt want to manage themselves needs to be paid for..

    Try going to a freelance site like ELANCE and posting an ongoing project where you need someone to manage your affiliate business

    Sure your end goal is to have sales coming in.. but do you think anyone on elance is concerned about that? No they are concerned about who the hell is going to pay them for the time they spend in focusing their time/life/attention on your business..

    Your not just paying them for their efforts, your paying them for the time they give.. everyones time has a value.. before efforts

    Think of a call center, a company will employ 100 people, and throughout their whole time of employment they are assessing each employees performance, do they stay on a call too long, how many calls do they take, are they efficient in getting tasks done, are they adding to the companys overall profit margin.. if not they work with you to help you, if you still cant do it, you get fired... But at no point, in any of your time working for them, are you not going to be paid for showing up and giving your time

    Showing up and giving your time to handle phone calls.. has to be paid for.. regardless of how well you perform.

    You cant guarantee anyone is going to perform, you can only have a good interview stage then take the risk and from there assess.. But dont kid yourself.. someone isnt going to turn up 8 hrs a day 5 days a week for nothing..
    Last edited by easylife; September 22nd, 2007 at 03:14 PM.

  12. #12
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    Quote Originally Posted by Noth
    Skinny: Greedy? That's about the most senseless comment I've seen on these boards, and you've had a lot of competition for that here this week.

    Go out and take a few commission only gigs, and see how you enjoy making nothing for 5 months while the program ramps up.

    An affiliate manager that understands this business would NOT take a brand new program on commission only. A well established one, perhaps, but even doing that devalues the role of the manager.

    So you can de-value the role of the affiliate manager if you want to. It shows you don't really get it.

    Exactly!!!..

  13. #13
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    Depending on what you mean by high priced item (and the respective commission rate) as well as the position of the product in the marketplace, the competitive situation w/other products, and so forth, I'd personally be open to such an arrangement and would view the upfront efforts w/o pay as 'sweat equity.'
    Last edited by OTProf; September 22nd, 2007 at 03:05 PM. Reason: grammar

  14. #14
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    Quote Originally Posted by OTProf
    Depending on what you mean by high priced item (and the respective commission rate) as well as the position of the product in the marketplace, the competitive situation w/other products, and so forth, I'd personally be open to such an arrangement and would view the upfront efforts w/o pay as 'sweat equity.'
    $400.. not really high priced but for a packaged shipped good but for some they might think it is.

  15. #15
    Newbie SkinnyMoose's Avatar
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    Ok

  16. #16
    The Seal of Aproval rematt's Avatar
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    Over the years I've had hundreds of salespeople and marketing people work for me on a variety of compensation plans including Salary + bonus, salary + commission and commission only (the employees option). I would never consider taking or giving a compensation plan without an incentive and would never consider offering one that didn't include some type of base, whether it's a draw / advance against commission or a salary. Stuff happens and people still have to eat.

    My philosophy has always been that the base gets their butts in the seat but the bonus/commission gets their hearts in the game.

    -rematt
    "I know that you believe you understand what you think I said, but I'm not sure you realize that what you heard is not what I meant." - Richard Nixon

  17. #17
    Newbie SkinnyMoose's Avatar
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    I guess I wouldn't mind paying for software and all that. That would be absorbed into the business expenses. The Affiliate Manager shouldn't be paying for anything out of pocket. If they already have something then that's great.

    I also wouldn't mind paying someone bonuses based on performance. After reading through these posts I probably would pay someone base if it were the right person. If I knew they were going to make the business money.

    I think I deserve to get chastised for saying it was greedy. That wasn't a good choice of words. Asking for base is definitely not greedy. I just don't think solely commission based agreements are unreasonable. I guess it would depend how large that percentage was. If you are only getting 10% as opposed to 50% then I guess that would make a big difference on base pay.

    So I do apologize to all those affiliate managers here for saying you are greedy.

  18. #18
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    Quote Originally Posted by rematt
    Over the years I've had hundreds of salespeople and marketing people work for me on a variety of compensation plans including Salary + bonus, salary + commission and commission only (the employees option). I would never consider taking or giving a compensation plan without an incentive and would never consider offering one that didn't include some type of base, whether it's a draw / advance against commission or a salary. Stuff happens and people still have to eat.

    My philosophy has always been that the base gets their butts in the seat but the bonus/commission gets their hearts in the game.

    -rematt
    Ah matt that is good way of putting it..

    base gets them started
    Commission/bonus gets their hearts into it..

    Some might say.. well if you have to get base to get your heart in it your the wrong employee but thats not the case... base covers time which could be used elsewhere, commission/bonus should just be incentive to have them do more than just show up

  19. #19
    ABW Ambassador Greg Rice's Avatar
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    For a new program, I wouldn't touch it either unless the likelihood of large success was very high.

    There's 2 main reasons I wouldn't take it.

    First, there is a great deal of time invested launching a program. You probably won't see many sales for the first few months. So you're investing your time. What is the merchant investing? What is your time worth?

    Second, there's a matter of committment. Launching an affiliate program is a TEAM project. Everyone on the team needs to be committed. If the merchant isn't highly committed, good luck trying to get them to do their part. They aren't your employees so you can't force them to do anything. I'm not saying they can't be committed with a commission only deal but nearly all of the pressure to keep on schedule is on you. If you miss the launch date by a month, who pays the price in a commission only deal? You do, the merchant lost nothing. Sure, they are losing sales but they don't have to write a check for that. If you're on base + commish, they continue to pay you while you wait for them to complete their tasks.

    If they are serious about starting an affiliate program, then they should be ready to make the investment.

    If the program has been running a while and has a track record, I would consider a commission only deal if the sales support it. I know what I need per month as a minimum. Whether the deal is commish only or base and commissh, it needs to meet the minimum.

    What if you build the program up and in six months they decide to run it without you? What have you lost?
    Greg Rice Affiliate Program Management
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  20. #20
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    I've discussed this in other discussion threads here, and I think that in one of those threads I listed a number of specific factors that might allow or preclude "commission-only" affiliate management.

    I would certainly consider taking on an affiliate management role for commission-only, in the right circumstances, just as I am willing to do PPC work on a pure "share of profits" basis with a very limited pool of merchants. But there's a lot of room between "consider" and "contract," and thus far I've never done affiliate management work on this basis.

    In another online discussion forum, I was accused of "cherry-picking" PPC clients for "commission-only" or "share-of-profits" payment arrangements, and I absolutely agreed -- I think I said then that I'd probably only work with about 1 in 50 clients on this basis, and now I'd say it's fewer than 1 in 100 (1%) of prospective clients.

    On the other hand, firms that tell you that they would never consider a "commission only" (or "bonus only") arrangement should be willing to explain why they think they'll make more money from a monthly $3,000 fee than from a commission-only arrangement; if they're honest, your expectations of the results they will probably deliver will be more realistic.

    Do the math: If you're planning to hire an OPM because you expect that they will grow your affiliate program to (perhaps) $1 million in monthly gross sales driven by affiliates, and they tell you that they require a $5,000 monthly fee and won't accept a flat 5% commission on gross sales, then they're really telling you that they don't believe sales are likely to exceed $100,000 per month (5% x $100,000 = $5,000).

    As noted, there are "startup costs" for an AM/OPM and the first month or two may generate almost zero sales; and the merchant has a zillion ways that they can screw up the affiliate program's prospects no matter what the manager does. But that's why we have contracts, isn't it? We do all have contracts, right? Contracts that say exactly what the AM/OPM will be doing, who will do the work, how much time per month, what specific actions per month, what goals, what measures for bonuses, etc.?

  21. #21
    Analytics Dude Kevin's Avatar
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    But that's why we have contracts, isn't it? We do all have contracts, right? Contracts that say exactly what the AM/OPM will be doing, who will do the work, how much time per month, what specific actions per month, what goals, what measures for bonuses, etc.?
    Sure seems like a good idea to me....
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  22. #22
    Life is Supposed to be Fun! Rexanne's Avatar
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    You could ask for a draw against future commissions so that your draw covers your expenses and/or work while waiting for the aff sales to flow. Once you reach the draw by commission only, drop the draw stipulation.
    Peace,

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  23. #23
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    Well after my conversation with them..

    I asked those questions regarding how many hours would you want me to cover per month

    They had no idea, they had not given thought to it...

    I asked what type of agreement would be drawn up, they had no agreement in mind, just a trust basis

    So lets summarize this..

    No Specific thought given to hours involved
    Sees no reason to pay a base salary just commission
    Has no agreement/contact
    Has 1 product
    Has not provided any sales records
    Wouldn't allow me to see the affiliate admin until I accepted the offer

    All of the above put red flags up for me..

  24. #24
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    Quote Originally Posted by Greg Rice
    For a new program, I wouldn't touch it either unless the likelihood of large success was very high.

    There's 2 main reasons I wouldn't take it.

    First, there is a great deal of time invested launching a program. You probably won't see many sales for the first few months. So you're investing your time. What is the merchant investing? What is your time worth?

    Second, there's a matter of committment. Launching an affiliate program is a TEAM project. Everyone on the team needs to be committed. If the merchant isn't highly committed, good luck trying to get them to do their part. They aren't your employees so you can't force them to do anything. I'm not saying they can't be committed with a commission only deal but nearly all of the pressure to keep on schedule is on you. If you miss the launch date by a month, who pays the price in a commission only deal? You do, the merchant lost nothing. Sure, they are losing sales but they don't have to write a check for that. If you're on base + commish, they continue to pay you while you wait for them to complete their tasks.

    If they are serious about starting an affiliate program, then they should be ready to make the investment.

    If the program has been running a while and has a track record, I would consider a commission only deal if the sales support it. I know what I need per month as a minimum. Whether the deal is commish only or base and commissh, it needs to meet the minimum.

    What if you build the program up and in six months they decide to run it without you? What have you lost?
    You understand it very very clearly..

  25. #25
    OPM and Moderator Chuck Hamrick's Avatar
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    Affiliate Marketing is not branding. I have taken on programs on a straight commission basis when there was and existing program. When they can produce the sales data on a reputable network then you can agree on commission based on a percentage. It is highly suspicious to for an offer to be commission only, tells me they want an no risk proposition. Plus, you are talking a minimum of 60 days to get paid. Can you handle that kind of risk? Why not just offer to be a super affiliate and do all of your recruiting through a 2nd tier. Then you own the affiliate relationships. They have a name for it and its called a CPA network.

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