Network Fees

[steveaich]

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Time for a bit of a rant, we've been running a program with affwin for 4 years now, the only contact I've had with them in 4 years is to resolve technical issues. Just had my first call from them in 4 years, they wan't to increase my monthly fee's, not the overide commision, but the monthly fee that we have to pay wether they generate any sales or not.

So we paid a massive set up fee, a monthly fee, plus overide, now if I don't agree to paying an increased monthly fee our program will be closed! Is it me or is this really sh!t customer service.

The program is not generating a massive amount of business, and although I've yet to do the math, don't think it can justify a rise in fees.

60-70% of the sales generated through the program are through a large affiliate which we were signed up to before joining affwin, we put them through the program to make admin easier!

This forum is full of affilaites ranting about merchants, but we merchants get a hard time as well, we're the people who invest in stock, deal with the customers, and make the whole thing possible, yet everyone seems to be after a bigger and bigger slice of the pie, especially the networks.

If there is a network out there who don't charge fees unless they are based on performance, have a good data feed system and who want a merchant who pay their invoices regularly then drop me a line, as we are likely to be a merchant with no network very soon.

[Mogga]

What program is it?

[pricethat]

This forum is full of affilaites ranting about merchants, but we merchants get a hard time as well, we're the people who invest in stock, deal with the customers, and make the whole thing possible, yet everyone seems to be after a bigger and bigger slice of the pie, especially the networks.

If there is a network out there who don't charge fees unless they are based on performance, have a good data feed system and who want a merchant who pay their invoices regularly then drop me a line, as we are likely to be a merchant with no network very soon.

To answer your question yes, lots. One thing you might want to consider though is each network may or may not have their own goals, it makes no sense to have merchants on the network that are not doing any business, to a degree it doesnt matter how many you have but there comes a time when the network might want to improve its portfolio rather than having 500 merchants all doing nothing. Its far less rude to increase the charges than it is to just kick you off, this may be a way of doing this. If you stay with them then they obviously make more money, you may get a kick in the ass to work your program more because its costing you money etc. Networks are only the beginning of your little journey, not the end. A network is a needed tool to do that for the majority but you will find the most succesful programs are the ones where the merchants are working fulltime promoting and helping us, not merchants that havent spoken to the network for 4 years Turning it round the other way it might just be the kick up the ass you needed to start working some more, i can't imagine a merchant offering a scheme that wouldnt try and contact the network themselves in that period.

As for merchants getting a hard time i would suggest that this is not truly unfair. After all, you are the ones that are trying to sell your products. Our complaints and rants are generally aimed at the merchant or the network as a result of us spending our time and money promoting a merchant that has or hasnt done something. The merchant does not make it all "happen". If merchants did not exist then the kind of people you have in here would just be merchants. We are sales people that work with other sales people to make a profit, not sales people that work with people that havent been seen for 4 years if you see what i mean.

You can get a lot of positive out of this if you look at it in a different light. I know you will probably be of the mind to switch now but lets face it, any network willing to take on a program that in your own words doesnt do a great deal is just desperate.

Hope thats of some help

[steveaich]

Hopefully my URL is now in my signature, so that should tell you who we are. When I say the program is doing nothing, it's generating £2-£3k per month of sales for us, 60% through 2 or 3 large affiliates, the rest through a collection of 20 or so smaller active affilaites.

In the past year(s), there have been times when we have done little to promote the program, and times when we have put in a lot of effort in to try to keep affiliates up to date with offers, sort out the creative, I have often asked affwin for help/advice, but have always been told we're on a self managed program (so whats the management fee for?), so they are unable to help. At the times when we did put a lot of effort into regularly sending emails to affiliates and putting in new creative we saw very little increase in activity, even when we had an affilaite exclusive offer which was fairly generous, we had 1 sale generated through it.

In our case the network seems to be a barrier to communicating with our affiliates not a help which is what it should be.

We're more than happy to do more to promote the scheme, but affiliates never respond to any emails as to what they would like to see(we can't tell whether they are actually getting them) and the network stonewalls us as we are on a self managed program(so whats the management fee for?).

The whole basis of affiliate marking is that it is performance based, you generate us sales, we pay you(the affiliate), you help generate sales, we pay you(the network). Where in this model do fixed fees come in?

[pricethat]

It is quite simple, look at the difference between Clixgalore and Affiliate Window. One has monthly charges the other none. I would not touch Clixgalore as it stands, the quality of the merchants are much lower than that of Affiliate Window for example.

We all hate paying charges but i think a monthly charge is in order, it does cost money to have a merchant on the network, it costs in time and technology advances that need to be made available to all merchants. This monthly charge probably does not even pay the programming costs so i wouldnt say it is in any way over the top and if anything i would say it is consistent with many of the other networks.

As the email from AWIN says, you are on a self managed plan, not hard to work that one out. Affiliates do not respond to emails because we get bombarded with about 5000 of them a day. Affiliates respond to people believe it or not, phone calls, meetings get togethers and it takes a long time. Jess is well liked, her programs get revenue in but thats only because people know jess and they know she would never shi$ on anyone and always look after the affiliates. I wouldnt suggest that the work you have been doing is wrong but when it comes to affiliate marketing working smart is much better than working, on a self managed plan your not going to get anyone teaching you how to do it for you when it probably cost the company many tens of thousands to learn itself or even teach their staff.

If you are doing 3000 at the moment then i am more sure than anything that you could be doing 30000 in a years time, its just how you work it and emails and offers are not the be all and end all of anything.

I would summarise your situation in that, you have the ability to offer an affiliate scheme at the moment, 3000 pounds a month doesnt really say its working does it. You are on a network that if you do your job properly will recoup any management charges a hundred times over each month if you was working it as other merchants seem to be able to work it. If you move to another network that does not have any charges, lets say clixgalore or a network desperate enough for the business then i would say you might be undermining the work that you may put in in the future.

I personally like the idea that there are charges, its one tiny little sign of comittment from the merchant that they can put their money where their mouth is and does protect us from the thousands of people that may try to not pay us or think we are some kind of free ride. I personally as an affiliate would love these charges to be much much higher as it would certainly weed out the merchants that can stand the course rather than dissapear all the time. I know there are many many good merchants, small ones and medium size that are honest and do work hard but in this world where bills need paying and people need their money back then its only programs that satisfy affiliates fears that get promoted heavily. You go a long to way to cover those fears before an affiliate asks these questions by showing that comittment to us by paying those fees. All you have to do now is go and tell all those people all about yourself.

Take a look at Justhom, this guy started humbly, he has been working hard, i doubt he will tell you he is a rich man but he is getting there slowly with it, it cant be any different for him as it is for you, maybe he is just working a little more differently than you. You wouldnt be so peaved about the charges if you were doing 20k a month compared to what your doing now would you.??

Just food for thought,

[Red]

I can see both points of view (probably from working both sides of the fence), the network only really wants programs that make them serious ££ and needs to charge extra for the extra time, bandwidth, admin etc that these 'smaller' merchants take up. Whilst the merchant doesn't see any added benefit from the network and isn't 'feeling the love' from them either (as they aren't a big client).

My issue that is not all programs are going to be massive and some will be niche (hey isn't that why affiliate marketing works so well?) - so suggesting because a program doesn't make enough money is a reason for them not being bothered with by the network or that the merchant themselves needs a kick up the arse, simply isn't fair. So if you've got a small niche program, that isn't going to make millions, what do you do?

I sympathise with you Steve as I have experienced similar issues with networks since I became a merchant - sometimes just getting hold of them is a nightmare. But there are some good guys (networks) out there, which are always on hand and easy to deal with (my personal favourites are POR and Affiliate Future ).

Good luck with sorting out the issue though

Red

[pricethat]

I can see both points of view (probably from working both sides of the fence)

You mean you have been batting for both sides?

[Mc661]

move to AF, most merchants are anyway.
I think AF have cheaper costs/overide straight away and as your moving away from awin I suspect ull get a deal.

But of course I dont know cos I dont work for them (though I do have shares like most of us)

[Red]

If you are doing 3000 at the moment then i am more sure than anything that you could be doing 30000 in a years time, its just how you work it and emails and offers are not the be all and end all of anything.

I would summarise your situation in that, you have the ability to offer an affiliate scheme at the moment, 3000 pounds a month doesnt really say its working does it. You are on a network that if you do your job properly will recoup any management charges a hundred times over each month if you was working it as other merchants seem to be able to work it. If you move to another network that does not have any charges, lets say clixgalore or a network desperate enough for the business then i would say you might be undermining the work that you may put in in the future.

Sorry I have to disagree here - not all programs have the appeal to make £30k a month. Yes if you are someone like John Lewis, Dial a Phone or even Prezzy box, but not if you are merchant like us that doesn't sell anything. So suggesting that a program is poor for earning £3k a month doesn't take into account the whole picture.

And no I haven't 'batted' for both teams in that sense cheeky!

[moogie]

Interesting thread this one. I can see Steveaich's point of view as a friend of mine was hit with the same increase. Basically someone phoned stating the monthly for this particular program was going up as of yesterday from £100 to £200 end of. The contract had been reviewed and his program was on the old one which had now been updated.

Now, I know the money wasn't the issue involved , it was the point of principle; to increase your costs by 100% without prior warning was a difficult one to swallow. Can you imagine if this happened in other industries, a better option would be to at least tell the merchants in advance?

I agree that costs are necessary for a network, their overheads are steep like everyone else's, haven't got a problem with that. From a merchants point of view it is a competitive World they operate in and money is tight so knowing in advance what your overheads are is a great advantage.

One thing I would say Steve, all the best programs are well managed. Affiliates will work better on your behalf if you are consisitant and they are kept in the loop. Without a shameless plug intended you need someone to grab hold of your program and give it a kick up the backside!

[Hero]

Time for a bit of a rant, we've been running a program with affwin for 4 years now, the only contact I've had with them in 4 years is to resolve technical issues. Just had my first call from them in 4 years, they wan't to increase my monthly fee's, not the overide commision, but the monthly fee that we have to pay wether they generate any sales or not.

First of all, if you have been running with an affiliate network for 4 years, you have many more reasons to be satisfied or dissatisfied with them than simply the monthly fees.

The program is not generating a massive amount of business, and although I've yet to do the math, don't think it can justify a rise in fees.

Second, the monthly fees are not related to performance. The monthly fee usually covers administration, support and marketing from the network's side. There are many networks out there that don't charge monthly fees for self-managed programs, simple reason being that you don't get a designated account manager to do their part of the equation. Although, of course, you do still get the support for your affiliates or you etc etc. If you think about it, some networks allow you to use their technology, their platform, their name, their affiliate list without paying for them unless your program performs. Plus, you signed a contract 4 years ago, when costs where such that £100 fee was covering them. 4 years down the line, these costs have gone up, so it's only natural that fees will go up. If you rent a house for 4 years, you don't expect to pay the same rent for 4 years, do you? Although, of course, you would expect to get a notification in advance and given the chance to negotiate.

In the past year(s), there have been times when we have done little to promote the program, and times when we have put in a lot of effort in to try to keep affiliates up to date with offers, sort out the creative, I have often asked affwin for help/advice, but have always been told we're on a self managed program (so whats the management fee for?), so they are unable to help. At the times when we did put a lot of effort into regularly sending emails to affiliates and putting in new creative we saw very little increase in activity, even when we had an affilaite exclusive offer which was fairly generous, we had 1 sale generated through it.

Third, and this is a very common complaint from small to medium merchants, affiliate marketing is a long term marketing activity and investment. You can't possibly expect to put in the effort for a couple of months, then do nothing, then do another couple of months of promotions, and expect it to bring in shed loads of sales. The analogy is with an athlete: if they want to win an olympic medal, they constantly need to train, improve, correct mistakes. Not train once every 6 months.

Four, affiliates get literally bombarded with emails, so simply emailing them won't get the message across. You need to combine emails with forum posts, with phone calls, with network announcements. Otherwise, it's lost in translation.
The fact that they haven't replied to your enquiries about what they want you to offer them, well, did you really expect them to? What, in effect, you're asking them to do is go in your site, search and find what they want to use, what promotions would fit them, what creative would suit them. Sorry, but that's your job: you know who your affiliates are, you know what type of promotions they run, you know what creative they prefer to use, and you provide them. If you have made all that available and still not getting the exposure, you then contact them to see what prevents them from doing it. It might be that your conversion rate is very low, it might be that your product range is not big enough, it might be that your creative is tacky, it might be that your prices are not competitive enough, it might be.... oh, you get the picture.

If you are doing 3000 at the moment then i am more sure than anything that you could be doing 30000 in a years time

See, no, that's not true. Not all programs can (or, even, want) do £30k. What would be nice to know, from a network's perspective, which we very very rarely get to know, even though we ask over and over again, is where the merchant wants the program to go, set specific targets over the year and in the long run. Whenever I have asked the merchants I manage "what do you want to achieve from the affiliate program" they just reply "sales" or "more sales". Fair enough, but something a bit more specific would make our job easier. 'Cause, at the end of the day, £2k is sales, as far as I'm concerned that's job done, but if the merchant in his mind is expecting £20k, then nothing has been done. Usually, those that can't reply to the questions are those without a business plan, without set targets for the marketing as an overall activity and don't see the bigger picture, no strategy for long term promotions, they just want the quick money and customers.

There are so many merchants that a couple of months from launch start complaining that their ROI is awful because of the monthly fee, and that the business we bring in doesn't justify the monthly fee, so want the fees waived. This is a case of the pie full and the dog not hungry at the same time (or however english have that saying). They agree to a contract knowing that affiliate marketing doesn't usually work overnight, yet they complaing when it doesn't work overnight. They agree to a contract wishing to show their commitment to the affiliates, yet they pull the plug before the end of the term because it's not profitable enough, even though they never specified what profitable means. They want the program to work on a self managed or a supported program, yet they put no effort in, they expect the network to do everything for them and then put the blame on the network. When their program does start to perform, they take the credit and leave the network's role out of it.

So, then you wonder, do you want to do business with merchant like these? The answer is, yes, not only because we're mentally instable , but because if we see the potential (=niche market, good products, good site, good prices) in a merchant, we'll try to explain all these to them and get them to understand how affiliate marketing works and what their role is. They will complain, even those that do understand will complain, but, hey, that's the nature of this business!!!

Back to promoting merchants now

[KGP]

Hero is quite right, but i have many friends as well considering to move to an Affiliate Network but they are hesitated when they hear what the bill is going to be.

Most of them want to make a small start with a self managed solution.

I believe thats the reason that more and more merchants that are starting their "affiliate experience" start with SAS -Share a Sale- even from UK.

But on the other hand, most of the merchants dont have any confirmed plan... just some thoughts, they dont know why they are doing it, how and what they want from it -not to mention the budget-.

so from my point of view the whole issue is a catch22.


Ps btw where is AW???

[pricethat]

It may be catch 22 but there are many here that are sympathetic as well as not. We spend 50-60 hours a week for many of us, if not more working to promote merchants. This is our time and for many people our money. It may be catch 22 for the nice people out there but its also an indicator of mindset as well. The only common indicator i have seen that a merchant is comitted to this channel is paying for it. I can start a network tomorrow with 200 merchants that are willing to pay nothing for setup and maintenance fees as long as they dont have to pay the comissions upfront. The experienced among us will know that getting payment from 200 customers that didnt pay anything upfront or any management fees will know that many affiliates will go hungry.

It may be a barrier to smaller merchants but that is life, for every 100companies that cant afford such setup costs there are 1 or 2 that can and will and also have no problems paying us. It is bad enough now with merchants not paying, dropping standards any lower will just result in many affiliates going under as well.

From my own experience i know of many people that want their cake without putting anything into it to begin with. That is not how the world works, the networks are here to make money, if you do not like it then of course there will be lots of other people that will step in to take that area of the market. As KGP said there are other networks that will do it for less.

If you look at individual attitudes though i would be less worried about working with merchants i know have made a comittment (that being cash as it tends to speak lots of words) and i know can and will pay. I do not get that information or trust from clixgalore, sharesale or anything else of that type so its only your own hard work that is going to overcome that, so what you dont spend you have to make up in work.

Back to the 30,000 comment, this was just a figure from the top of my head, but its certainly not something anyone should be disagreeing with. 30,000 of merchant turnover (basket value) equates to 50 orders a day with an average basket value of 20 pounds, its not like that is rocket science is it. In context of this merchant i do not see it anything less than a small target.

[BenKowaBunga]

From a network point of view (Kolimbo.com), I agree with much of what Hero said.

I think you need to be more active in your affiliate program management all year round - more creative, special offers (You got Father's Day sorted out yet?), pick up the phone and get feedback from your active affiliates, check out the competition (eg. You're paying 6%, groominglounge.com is paying 12%).

I assume the monthly fee is fix? Which is good because the more you make the rate stays the same. Some networks charge a fixed monthly fee AND a percentage Network fee on top.

[steveaich]

Wow, that's quite a lot of response, and there was me thinking this section of the site was pretty quiet.

There are many points I could respond to, but to keep it short, pricethat, I'm sure from your point of view you don't want to waste money promoting a merchant that doesn't pay up, and you want the networks to ensure that this isn't the case, this can be done in more effective ways than to simply charge money upfront. To insinuate that because we don't want to pay a monthly fee means that we won't pay commisions is wrong and unfair.

To the networks which are listening, affiliate marketing is performance related, you perform, we pay you. Set fees are not performance related. Yes I can see how you want to promote genuine trustworthy merchants, and ones which will be proactive in working with you, but to charge a fee just means that the merchant will expect ROI, if not we can spend our marketing budget on PPC and get ROI immediately, and yes that means ROI now, not in three years.