What do affiliates value in a merchant's program?

Wed Jul 24, 2013 6:01 am

Hi everyone,

Developing an Affiliate program and looking for feedback. I want to have a program that makes affiliates happy.
Note: Not actively looking for affiliates until we have enough data to provide solid conversion rates.

New company, medium niche, pretty open
selling digital solutions/products

One issue, our products' gross margin percentages vary wildly(~10% to 65%). How do we calculate affiliate % given that?

Paying out a percentage of the gross margin would be simplest, but I could see many affiliates balking at joining such a program with a new company.

Most factors are flexible:
Affiliate %: ?
Cookie Life: 90 Days
Payouts: Weekly, one month lock period
Minimum Payout: $50
Payouts By: Paypal(Payoneer could be set up on a per-affiliate basis)
Network: None, leaning towards ShareASale at a later date
Conversion Rate: N/A
Marketing Material: Banners, rss product feeds, video ads, widgets, blog.
Notes: Affiliate/customer support, no phone sales, some sort of bonus program, statistics tracking.

Thanks!
Logon
 
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Re: What do affiliates value in a merchant's program?

Wed Jul 24, 2013 11:32 pm

Logon wrote:One issue, our products' gross margin percentages vary wildly(~10% to 65%). How do we calculate affiliate % given that?

I think you should just calculate the highest fair commission you can afford to pay for each product. I don't see any major problem with telling affiliates that your commissions vary from, say 10% to 50%, or whatever, as long as you show affiliates a list of the products with the commission in dollars that they will receive for each product.

For me, the important thing to know is how much actual money I'll receive for a sale. I'd need more than a vague statement about the commission being a percentage of your profits.

Would that be complicated for you? Are you planning to have a massive list of products?

Cookie Life: 90 Days

Why not make it 5 or even 10 years, as some merchants do? It SOUNDS fantastic, but in the long run it won't make a heck of a lot of difference to you or the affiliate. If your products are reasonably priced, the vast majority of your sales will occur immediately or within the first 3 days of the first visit - not months or years later. (I read stats on that from an affiliate network years ago.)
AllanGardyne
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Fri Jul 26, 2013 3:34 am

Hi Allan,

Thank you for your reply.

Only carrying a couple proprietary digital products and then reselling a few in the same niche.

Is this the post you read regarding cookies? It supports your data:
http://www.amnavigator.com/blog/2009/03 ... -question/
5-10 years seems a bit extreme tho :)

Queston: How much weight is placed on marketing materials such as RSS product feeds, video ads, and various other widgets?

Thanks!
Logon
 
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Fri Jul 26, 2013 7:19 am

Logon wrote:Is this the post you read regarding cookies?

No. The item I read was older than that and was written by someone who had worked for an affiliate network, so it was based on a larger example of stats.

Still, I think the end result is somewhat similar. :)

How much weight is placed on marketing materials such as RSS product feeds, video ads, and various other widgets?

Affiliates are a diverse crowd. Some will want product feeds and all the help you can give to make their lives easier. Others will want to tread their own path.

However, we all tend to feel overwhelmed with too much to absorb and too much to do, so anything you do to simplify our lives is good.

One company I know creates videos I can paste into my pages to illustrate points in reviews I write, and keeps producing new videos. That's very handy.

I think the 4 most important things are:

1. Your site needs to LOOK as though it will make sales.
2. It needs to actually MAKE sales.
3. Good commission.
4. Products worth promoting! :)

All the rest is just detail, as far as I'm concerned. For example, recurring or lifetime commissions would be nice, but not essential.
AllanGardyne
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Merchant side perspective

Thu Sep 26, 2013 1:33 pm

Couple of important notes regarding running an affiliate program from a merchants perspective:

1. As much as we'd want to have affiliates, work with us, we still have to take some precautious measures against 'hit-and-run' guys. That's why we have a double payment requirement for first time joiners: min payment amount equal to $100 and min number of sales - 5. An affiliate could get $100 from just his first sale, but still would have to generate 4 more to ensure these transactions are valid and that is some real traffic he's lead the sale from. This might not be cool for some new affiliates, but is definitely helping them gain trust with the merchant, which in turn open the real benefits of each other's affiliate program.
2. Payouts - paypal, but some ask for other methods and you have to be ready for that.
3. Cookie Life: 90 or 120 days are the best, 120 days are rare though, but might give you some competitive advantage over other programs in the same nieche, if all other conditions are equal. This should not be confused with Lifelong commissions - e.g. a returning client, extending their memembership every year. That is can be 5 years and more. Coockie life cannot be that long for obvious reasons, besides visitors might be visiting all sorts of pages before that, and who knows what source will get attribution after visitor will make a purchase, maybe all of them or none, which is not fair.
4. Affiliate % - really depends on what you can afford and what is your month of payback.
5. Network - try out a couple of them, won't hurt at all.
6. conversion rate - of course that's important, and most likely every other merchant is giving rough estimates to the public, to avoid sharing some important data with the competitors.
7. Marketing materials - very important, don't forget about PPC and SEO keywords, example texts and ads, variety of design creatives. It would also greatly help if you could offer some inhouse design, so that affiliates could request additional sizes or designs should they need so.
8. Statistics is probably the most important part and I wouldn't put it into NOtes section. That is something most of the affiliate look into daily, especially those working on PPC. It should contain the most detailed information you can give them, hourly, daily, weekly, monthly, types of products, licenses, sales, etc. Export, notifications, etc. are also important.
9. Bonus program, contests- might be cool, but what really gets the affiliates probably is the tiers system, whereas you'd be giving higher & from a sale to those that give you more than 100 sales a month.

cheers
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Fri Nov 01, 2013 3:40 am

The most attractive program should avoid affiliates losing their orders to vendors as many as possible.
MixboxIam
 
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