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  1. #1
    Member
    Join Date
    November 9th, 2007
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    82
    Question Commission Caps. Why?
    I got emails from RazorGator and another ticket site about placing a cap on commission for big events like the super bowl, final 4 and high price things like that. Why in the world would the site offer you a commission and then say "but when you make alot of money, I would prefer not to pay you what you earned"...When I got the email I instantly changed my razorgator links to another company. Not that I use razorgator too much, but that is just silly to me. Any thoughts on that?

  2. #2
    ABW Ambassador Sheri's Avatar
    Join Date
    February 17th, 2005
    Location
    Kansas
    Posts
    531
    I can't speak for this particular company, but some companies have certain caps that they cannot exceed per the vendors that they deal with. Also, some companies try to divide their budget that can be spent across different partnerships allocating a certain budget amount to each partnership type. It may be that they have other partners or marketing strategies and can only spend a certain amount of budget on certain relationships. (i.e. Affiliate relationships, ppc campaigns, e-mail marketing) They have to manage how much each group creates in an effort to not exceed their budgets.

    If that particular vendor does well for you and you think that you would produce enough to hit the cap, then you should think about doing so. Then you can switch out your links and see what another vendor might do for you. Just switching them out and going with an unknown quantity might not be your best strategy if you know this one could rake in the $$ until you hit your cap.

    Just some things to consider.


    Sheri

  3. #3
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    Join Date
    January 18th, 2005
    Posts
    2,973
    The only logical reason for a "commission cap" would be if the standard commission is not affordable for high-ticket sales with narrower margins.

    For example, perhaps they earn 20% on most sales and can thus pay 10% commissions (I'm making these numbers up), but for the highly-competitive Super Bowl packages, perhaps they only earn 12% so they can't pay 10% and still earn a profit. Or perhaps the NFL demands a share of all Super Bowl package sales, thus reducing the profit.

    Of course, making such an announcement at "exactly this moment" (when potential Super Bowl attendees are shopping) is unfair to affiliates, and demonstrates a lack of foresight and planning, unless there is some sudden change to their business.

    I think it was Amazon that actually pioneered the use of affiliate "commission caps" on sales of high-priced products with low margins. It's certainly not new, but it certainly does shift the promotion efforts by affiliates.

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