Merchants slamming affiliates with badly run in-house program?

[andreww]

I had a bad experience with a "web services" merchant who was paying me way below the merchant's same offer on a major affiliate network.

Boy, that was certainly a rude awakening.

I was upset enough to blog about it, though my focus is on the trust between merchant, affiliate network and affiliate, rather than naming and shaming the merchant.

If you'd like take a look at the post, and more importantly weigh in with your opinion, I'll gladly publish all on-topic comments.

My post is located at:
What Happens When Merchants Don't Play by Affiliate Marketing Rules?

Opinions by merchants, affiliate networks and affiliates are welcome.

More importantly, check out what the industry has had to say in the comments, through the opinions of Shawn Collins, Pepperjam, Super Affiliate Amit Mehta and others.

 

[Julia15]

Thanks for posting Andrew, it was an interesting read, especially the comments part.

Also, I respect the way you left out the company names so that the real issue was the main focus, rather than the post turning into a witch hunt.

Doing the research is necessary to find the top payout. I often have affiliates negotiate/barter payout rates with me for certain offers that are available through other networks, however it's helpful to keep in mind that payout isn't the only factor when choosing which network/program to partner with. That being said, the huge payout discrepancy that you experienced seems unusually high.

 

[Linda Buquet]

Hi Andrew,

Did see the blog yesterday but didn't have time to comment. Glad you brought it up here for discussion. It's a good topic.

It's a little hard for me because in issues like this I can see and relate to it from each different angle. These are so many issues at hand here. I'll comment on a couple.

If I were you I would be upset too. So I am on your side and feel your pain,
however...

"Regarding the “ethics”, I don’t think it’s ethical to do a two versions of the same prog."

I personally feel strongly that bigger and pro-actively managed programs SHOULD offer 2 versions.
In-house and a good network.

TYPICALLY, but not in this case the in-house commissions would be a little higher, possibly longer cookies, etc. to make the in-house option more attractive and offset network costs.

So I feel affiliates deserve a choice. In-house for higher payout and other perks OR the convenience of a network. Some affiliates only like to run network programs and some are gunshy of Indies. On the other hand some affiliates avoid certain networks, or don't like networks due to cookie blocking issues or other issues. So I do think running dual programs makes sense most of the time. (I DON'T think being on every CPA network and running on more than one network and one in-house program makes sense - in most cases.)

Now I don't know anything about the merchant or who it is, but a possible scenario hit me that COULD make sense of this situation. Not saying this scenario would make the sitn any easier for you to take but...

If the merchant, like many are was clueless and the affiliate program was not being tended to properly and they hired an OPM. The OPM said to build this program for you it, needs to be on CJ so we'll manage the CJ program. (Either the OPM said they would not manage the in-house program because it wasnt set up ideally or the mercahnt could not afford to pay the OPM to manage both BUT (good for you) at least didnt just close donw the indy, but left it open for the existing affiliates that were using it.

So now all the focus is on CJ - the OPM (working for the good of affiliates) talks merchant into raising commission after showing they need to based on other hosting companies on CJ. SO the OPM did a good thing talking the merchant into higher commish, the merchant did a good thing to agree to raise it. The only bad thing is the indy is like a small forgotten step child that no one cares about. The indy program is just hanging out there running on auto-pilot.

Again not saying thats what happened or that the above scenario justifies it, I can just see it happening.

 

[andreww]

Hi Julia,

Thanks for your feedback.

The message to "research, research, research" aspect has certainly come through for me loud and clear.

I have run businesses myself, so I was expecting gaps and discrepancies, but 50% is really..........I am at a loss of words at this.

If it's alright for you, I'm planning to do a wrap up on this matter and I'll use your opinion together with your title and network?

I'll do a wrap early next week.

Thanks.

Thanks for posting Andrew, it was an interesting read, especially the comments part.

Also, I respect the way you left out the company names so that the real issue was the main focus, rather than the post turning into a witch hunt.

Doing the research is necessary to find the top payout. I often have affiliates negotiate/barter payout rates with me for certain offers that are available through other networks, however it's helpful to keep in mind that payout isn't the only factor when choosing which network/program to partner with. That being said, the huge payout discrepancy that you experienced seems unusually high.

 

[andreww]

Hi Linda,
Thanks for your opinion.
Coming from a veteran in the industry, I think you expressing your thoughts add weight to this.

> "TYPICALLY, but not in this case the in-house commissions would be a little higher, possibly longer cookies, etc. to make the in-house option more attractive and offset network costs. "

My thoughts and exactly and that's what I'm hearing too.

The opposite has occured though, so that's left me feeling preplexed.

I go to events like affiliate summit and hear about stuff like affiliates, merchants and networks working closer together.

This kinda stuff just brings all parties further apart.
I guess to me "trust" is a central issue in the affiliate-network-merchant and though i'm very familiar with the caveat empor aspect of free markets, I'd have thought there's some unspoken covenant at hand.

But again, I realized as some may have mentioned the in-house program has not been managed well, and they could have just left things as they are for the last year or two and not managed anything at all.

In the end this gap ultimately hurts the merchant too, because the difference in commissions would have been something I could've used to bump up my marketing efforts (and possibly earn more for the merchant...).

I'm certainily not feeling bitter about the situation, I've experienced challenges previously and expect more in the future.

I guess the difference is that with a blog, it gives me a bigger avenue to know what others things and move on from here.

Thanks for your time and I'll do what I can to include your opinions in my balanced wrap-up.

Hi Andrew,

Did see the blog yesterday but didn't have time to comment. Glad you brought it up here for discussion. It's a good topic.

It's a little hard for me because in issues like this I can see and relate to it from each different angle. These are so many issues at hand here. I'll comment on a couple.

If I were you I would be upset too. So I am on your side and feel your pain,
however...

"Regarding the ?ethics?, I don?t think it?s ethical to do a two versions of the same prog."

I personally feel strongly that bigger and pro-actively managed programs SHOULD offer 2 versions.
In-house and a good network.

TYPICALLY, but not in this case the in-house commissions would be a little higher, possibly longer cookies, etc. to make the in-house option more attractive and offset network costs.

So I feel affiliates deserve a choice. In-house for higher payout and other perks OR the convenience of a network. Some affiliates only like to run network programs and some are gunshy of Indies. On the other hand some affiliates avoid certain networks, or don't like networks due to cookie blocking issues or other issues. So I do think running dual programs makes sense most of the time. (I DON'T think being on every CPA network and running on more than one network and one in-house program makes sense - in most cases.)

Now I don't know anything about the merchant or who it is, but a possible scenario hit me that COULD make sense of this situation. Not saying this scenario would make the sitn any easier for you to take but...

If the merchant, like many are was clueless and the affiliate program was not being tended to properly and they hired an OPM. The OPM said to build this program for you it, needs to be on CJ so we'll manage the CJ program. (Either the OPM said they would not manage the in-house program because it wasnt set up ideally or the mercahnt could not afford to pay the OPM to manage both BUT (good for you) at least didnt just close donw the indy, but left it open for the existing affiliates that were using it.

So now all the focus is on CJ - the OPM (working for the good of affiliates) talks merchant into raising commission after showing they need to based on other hosting companies on CJ. SO the OPM did a good thing talking the merchant into higher commish, the merchant did a good thing to agree to raise it. The only bad thing is the indy is like a small forgotten step child that no one cares about. The indy program is just hanging out there running on auto-pilot.

Again not saying thats what happened or that the above scenario justifies it, I can just see it happening.

 

[ayushpant]

Hi Andrew,

I most likely know what merchant you are talking about here. I had signed up with the same merchant through their website.

After I signed up, first thing I did was e-mailed them asking for their cookie duration which was none. Customer had to sign up there and then else you lose the sale.

The same merchant has $90 affiliate commission on CJ, and a longer cookie duration. I couldn't believe it. I immidietly cancelled my account from their website, and signed up on CJ. Didn't promote that merchant at all, that's a different story.

But, I found it very strange and not so good myself. I know what you must be feeling about this whole issue. But, I guess its a lesson learned. We need to double check that if the same merchant offers program somewhere else and what are their commissions, policies etc. in other places.

I don't think we can do anything about it, since they do not force us to join through their website, and offer the same program somewhere else, so we do have a choice to go with.

At the same time, most merchants have an "Affiliate Link" at the bottom after which you are redirected to the network on which you can join. Most of us are used to the fact that a merchant offers the affiliate program at only one place. So we get tricked there.

In your case, they did not make it clear that you did have the option to join through CJ. I personally feel it is tricking innocent publishers. This way they can just get traffic through you. The customer comes back at a later time, signs up and you get nothing. I read somewhere that an average customer has to look at the product 7 times before making their mind for the purchase. In this case, that merchant gains the customer and you lose your $60 (+$30 through CJ).

It angered me too that they had no cookie duration and lower commission through their website. Fortunately, I happened to search for that merchant on CJ too. I always tend to double check if the merchant is on some other network as well and what they have to offer on the other network.

In case you didn't know do check about the cookie duration of that merchant too by asking them and compare it to the other network.

 

[andreww]

Hi Ayush,

>>> After I signed up, first thing I did was e-mailed them asking for their cookie duration which was none. Customer had to sign up there and then else you lose the sale.


It just keeps getting better and better.

>>> But, I guess its a lesson learned. We need to double check that if the same merchant offers program somewhere else and what are their commissions, policies etc. in other places.


This certainly isn't a lesson I'll be forgetting soon.


>>> It angered me too that they had no cookie duration and lower commission through their website. Fortunately, I happened to search for that merchant on CJ too. I always tend to double check if the merchant is on some other network as well and what they have to offer on the other network.

In case you didn't know do check about the cookie duration of that merchant too by asking them and compare it to the other network.

I checked the merchant's site. No info on cookie duration.

Thanks for the lesson, I'll certainly keep these in mind in the future.

 

[Julia15]

Hi Andrew,

Sorry I didn't get back to you sooner, I was home sick yesterday

Please feel free to use any of my comments if I'm not too late.

Cheers,

 

[andreww]

Hi Julia,
No worries, i'll be doing a roundup over the next day or so.

You're good!

 

[andreww]

Hi Linda, Julia, Ayush,
thanks for weighing in with your comments, I've posted a followup over at:
What Happens When Merchants Don?€™t Play By Affiliate Marketing Rules Part 2 at Andrew Wee | Blogging | Affiliate Marketing | Social Traffic Generation | Internet Marketing

 

[Linda Buquet]

THanks for the update Andrew.

FYI the 5 Star link goes to an error page on your site.
Also was thinking you may want to link to this thread instead of my home
page in case anyone wants to read more discussion here on the topic.
Just a thought.

 

[andreww]

Hi Linda,
Thanks for the heads-up.
I went in there and fixed the URL to 5Star and also had a link to this thread.

THanks for the update Andrew.

FYI the 5 Star link goes to an error page on your site.
Also was thinking you may want to link to this thread instead of my home
page in case anyone wants to read more discussion here on the topic.
Just a thought.

 

[Linda Buquet]

Thanks Andrew!

 

[Julia15]

Great update Andrew.

I'm surprised to hear the merchant's reaction -

?The affiliate network determines the payout.?

?The affiliate network is a third party, we don?t control them. We aren?t concerned about the commission discrepancy. You can choose which program you want to promote.?

Even though (or because?) they are a third party, merchants should definitely work closely with the affiliate networks. How else can the merchant control the quality or their brand? I guess the bottom line is that they don't....

 

[andreww]

Hi Julia,
Thanks.

The guys didn't seem bothered (or didn't care) about the discrepancy.

They almost seemed to be saying "You can choose to promote our program, or not. We don't care".

The part I didn't mention in the blog is that the CEO has a blog up, and has said if we have any comments or feedback about the company or its services to mail him direct.

It's been at least 4 working days. (or 6 days including the weekend) No reply.

Oh well...

Great update Andrew.

I'm surprised to hear the merchant's reaction -

Even though (or because?) they are a third party, merchants should definitely work closely with the affiliate networks. How else can the merchant control the quality or their brand? I guess the bottom line is that they don't....

 

[MrCat]

Very well written Andrew! I just hope such merchants would stop bringing shame to the same industry I am in. Do we have a section here where we can post scammers and stuff?

 

[Larwee]

MrCat, no we do not have such a section and we probably won't add such a section.