Do affiliate networks earn their 30% over-ride?

[Top banana]

I think over-rides very from network to network, but i hear the norm is between 20% and 30%.

I personally think that us affiliates do the vast majority of the work to create traffic and orders , building sites, coming up with ideas, investing time and money in PPC and SEO, etc. So do you think affiliate networks earn a 30% over-ride?

30% is a lot of money which i feel would be better spent going directly to affiliates who actually drive orders, rather than the networks which are simply a facilitator (tracking, reporting, accounting).

Affiliates would exist without networks (by working direct with merchants), while networks wouldn't exist without affiliates. So surely affiliates should get a larger percentage of the pie!

[hirschnathan]

Affiliates would exist without networks (by working direct with merchants), while networks wouldn't exist without affiliates

Try it. Lots of indi progs are joining networks.

[Vivid]

I think it's highly unlikely you will get a balanced answer to this one. My opinion is that it very much depends case by case, network by network.

[drivetowin]

Wait till you promote 100s of merchants and then consider the option - a dozen invoices a month to networks or 600 invoices a month to merchants - I know which I would rather do.

If we were to have direct deals with every merchant we deal with then we would need to employ at least one person and probably two full time just to do credit control which would radically affect our bottom line.

[mattb811]

Affiliates would exist without networks (by working direct with merchants), while networks wouldn't exist without affiliates

I have to disagree with this. All networks, including my own, employ sales teams who go out to merchants and extol the benefits of the affiliate marketing channel. Many of these merchants would undoubtedly not have entered into affiliate marketing if it wasn't for these efforts. There would still be a market there but nowhere near the scale that it is at now.

Alongside the robust tracking technology, comprehensive accounting and strategic assistance to both clients and merchants I think the networks certainly have a place and earn their money.

[hpops]

Originally Posted by Top banana So surely affiliates should get a larger percentage of the pie!

Well, we do get a larger share of the pie - of 130% - we get 100%.

Affiliate marketing would be nowhere near as big in the UK without networks - Most of us would not earn as much money. Commission payouts would be smaller, content units would not be as sophisticated, etc, etc, etc.

I think that margins are being squeezed network-side and rightly so (I personally think 20% is considerably fairer) but it down to competition not lack of added value

[ppcexpert]

Originally Posted by drivetowin If we were to have direct deals with every merchant we deal with then we would need to employ at least one person and probably two full time just to do credit control which would radically affect our bottom line.

If you earned 30% more, then would this pay for the extra person?

My guess is it would, plus give you a little extra afterwards.

[Top banana]

Originally Posted by hpops Well, we do get a larger share of the pie - of 130% - we get 100%.

That isn't the right way to think about. The merchant is not giving you 100% of the commission. The merchant will work out how much they can pay, then minus the network's over-ride and what is left is the affiliate commission.

e.g. £100 commission + 30% over-ride = £130 (affiliate percentage is 77% of the total amount).

It is the largest percentage, but should networks get so much for tracking and accounting, etc. Personally, i think they should get closer to 10%.

[pistol101]

Personally, i think they should get closer to 10%.

Blimey are you trying to bankrupt all the networks, there's enough networks that don't even break-even at the moment!

[hpops]

Originally Posted by Top banana Personally, i think they should get closer to 10%.

That really would mean that there wouldn't be any networks - it simply isn't enough to run on, then they wouldn't exist and neither (I suspect) would a lot of us

[stevenm]

Personally, I think some affiliate networks have been a bit greedy in the past and that this perhaps colours the view some affiliates take. For example, I had an affiliate manager confirm to me that they paid a network £30 per sign up for a programme and yet the bottom tier on the network was a little over £10 and the top tier (100 sales per month or over) was still less than £20. I only have this verbally from the affiliate manager so I will not mention the name of the merchant or network but it is telling that when the programme opened on a second network it started at a flat payment of £20 or so per sale and the original network was forced to follow suit. Needless to say, I have switched my links away from the original network.

Steven