'White Label' pricing structure feedback please

[OME]

Tweet

For a while now, I have been working on a 'white label' system. My background is in programming and usability design, as well as being an affiliate in various sectors for around 2 years.

A short time ago, I decided to capitalise on my strengths by basically selling my own services to other affiliates.

So, for the past couple of months I have been putting together a system that will comprise various types of site - comparison sites etc etc. The idea is that each site, using your own domain name, will be hosted and managed by my company. So, you may create and customise the 'look and feel' of your site, with your own branding etc, but the actual content will be managed by us - as well as hosted.

Naturally, the above is a very simple explanation of the service, but it should give you a basic outline of the aim.

So, as the technology behind it is pretty much complete, I have been playing with different revenue models - each has it's own benefit to us and to the affiliates that will use the service. These are the 3 options we are currently evaluating, and I'd be grateful of any feedback from members on which they would personally prefer;

1) Basic subscription fee - we would charge a monthly fee per site which includes the system itself with associated reporting etc, hosting, and obviously the management.

2) Full Payment Management - we would charge a small percentage of commissions earned. Payments would then come from us, so you wouldn't be using your own account id's.

3) Pay Per Click - we charge a small fee each time a site visitor clicks on an affiliate link within your site.

There are various pro's and con's to each route, but I'll refrain from pointing these out at the moment. Would appreciate anyone's initial thoughts.

[Edwin]

For the would-be successful affiliate, option 1) is obviously the most appealing. The logic being that if I can write better content, do a better SEO job etc. than Bob down the road and hence generate more sales, but we're both hosting the same kind of site using your software, why should I be punished for my success in the form of higher fees? That's just nuts! Hosting companies don't take a cut of their customers' revenue, and neither do ASP solutions like blog software or discussion forum providers etc.

For an affiliate just getting started or someone who's not confident they're going to make much money, option 2) might make vague sense, but it would be better to do it on a tithe basis (e.g. 1/10th of visitors see your affiliate coded links, not the affiliate's own links) rather than put yet another middleman between an affiliate and their monthly paycheque.

Option 3) is hands-down the least appealing, since it penalises success AND will also punish an affiliate for sending lots of traffic to a merchant which converts less well than another (or which declines in conversion rate) - basically, you're getting paid but the affiliate isn't i.e. the classic Adwords model.

[drivetowin]

I'd agree with Edwin, the tithe basis is the best way to handle this sort of scenario - there are a number of providers doing this already and it can work pretty well - so say four out of five times the link will include the affiliates own affiliate code and one time out of five the link includes your affiliate code.