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Don't Overpay for Selling your Products. Use Affiliates

Discussion in 'Affiliate Management and Recruitment' started by cdorob, Mar 22, 2007.

  1. cdorob

    cdorob Affiliate affiliate

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    Not sure where I should post this, but I've managed to write a little article of my own about the affiliate sales benefits for the merchants:

    If this sounds familiar:

    "I bet that when you are thinking about doing more sales, you are thinking about hiring a new Sales Manager or paying for some advertisements. No secret that the newly hired Sales will spend about 6 months trying to understand your products and the market (but, well, he gets paid even if he makes no sales in the learning time) and even when he starts selling it will still take 6 months to get him up to speed. About the advertisements, they are a sure cost and a not so sure result."

    then the rest of the article it's for you. I hope you will like the style:
    Don't Overpay for Selling your Products. Use Affiliates
     
  2. genericleaders

    genericleaders Affiliate affiliate

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    It's very interresting, however, because of the competition, we are already over paying our affiliates, when you have your own sales manager, you right about paying him for is learning time, but when after a few time your sales grow, your profits are more profitable for the company than having only affiliates.
    for example, at our company, we offer up to 30%, and if one of our affiliate came from another affiliate, or affiliate network we pay another 5%, we also pay arround 40% for the product and another 10% for the billing processor.
    it means that by working only with affiliates, we our payout is up to 85%!!!! per sale. also means that we get only 15% of the sale, and for that, we need to have a service team, sale team, logistic team, web-dev team.
    because we offer lifetime commissions, we cannot expect to make more profit on each affiliate sales.
    this is true that we offer the highest commissions in this market, but after few years of research, it was the only way to get more affiliates.

    bottom line, affiliates are great for the run-over of the company, BUT sales managers are great for the bigger profits, every internet commerce should consider using both.
     
  3. cdorob

    cdorob Affiliate affiliate

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    Hi,

    You are absolutely true. In fact, don't miss a very important line in my article: "when you are thinking about doing more sales" - which actually sets the story in the same limits as you did.

    Affiliates are not a substitute to good Sales Managers, every company needs to have a strong sales team. But then, there is also a point where hiring new sales is not as cost effective as having affiliates.

    We could also talk about percentages of sales done through Affiliates versus Sale Teams and other channels - the numbers are greatly different from one company to another - but I can bet that affiliate sales are just one channel in the greater distribution model for any company.

    By the way, very interesting details regarding the costs a merchant has when selling through affiliates. Affiliates think about their commissions as the only cost, but in fact vendors have more costs than just the commission.
     

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