Why can't all networks pay commissions within 28 days

[drivetowin]

Tweet

If networks like Paid on Results can pay on demand, Webgains can pay every week, and Affiliate Window every two weeks, why do most of the other networks have such protracted payment processes (and indeed in some cases make it so damn difficult to work out how much you are going to be paid when, and once you have been paid work out what the payment was actually for). Even one small independent we deal with is better than some networks, they pay seven days after month end, and they self invoice to boot and the invoice always matches the payment amount.

Ignoring the cynical view for the moment that networks like to sit on our money and earn on it by playing the money markets, is there any other logical reason why this should be - is the cashflow of some of the large networks really so tight that they cannot afford to take a punt on paying affiliates before they themselves have got paid - if Affiliate Window can do it (and they are far from being the highest funded network if balance sheets are to be believed), then why do others like Tradedoubler and Buy.at find it so difficult to achieve?

Lets see all networks make a firm commitment that by six months time (how long does it take to implement an accounts system for heavens sake), they will all pay commissions within 14 days of the transaction being validated and that all transactions without exception will be autovalidated after 42 days if the merchant has not validated or declined them.

I know I'm dreaming when I hope this will happen, but hey, come on, post here and share the dream....

[123debtsolutions]

As you know we pay weekly and since introducing this type of quick payout I get a lot of happy introducers.
Quick turnover of cash is of paramount importance to affiliate marketing. Especially in the finance vertical as it carries such heavy demand on the pocket.

All the big players are doing is sitting on the huge wad of cash to earn additional interest on your dollar... Not on really.

[gadget]

This may not be totally in the networks hands. For example, I have a client who offer a free 21 day trial on their products. Whilst this is a great service it does mean that some products are returned. So in this particular example, the client confirms commissions after 21 days of the original order.

My point is that merchants may be having an impact on this. Good debate though.

[oxleyBM]

Hi ,

I agree that quick payment is certainly the best scenario, and I know I used to like Webgains for this when I was an affiliate.

However, I think that we also need to remember that with so many companies, there are also a very broad range of payment terms. It's definitely good for the Networks to persuade their clients to prepay affiliates or pay up very quickly , but ultimately I don't think they should be forced.

Many companies are used to dealing with advertising bills which they pay several months in arrears, and if Networks dictated very quick payment terms we'd probably find that we'd have a smaller selection of merchants to deal with. At least through Networks like TD which has a 2 month lag, Merchants have a choice of using this network that matches their payment terms.

The current affiliate marketing system rewards merchants & networks who pay early, while not closing the channel out to merchants who are not willing to budge on their payment terms. I think that's fair enough.

[drivetowin]

Networks are free to agree whatever payment terms with merchants that they wish. My point is why can they not be like other businesses who have to fund supplier (in our case affiliate) payments out of capital/reserves while waiting for their own payment from customers (in our case merchants). With some networks now having capital investments running into many millions of pounds, I can't really believe that they don't have the cash to be able to do this.

Pay when paid is outlawed in almost all elements of UK contract law, but for too long imho networks have played it to their advantage.

[ian-d]

I agree with you in terms of the network should be paying out, even prior to receiving the funds in themselves, whilst they are just wanting to cover themselves, isn't that what we are doing, we pay out for domains, hosting, ppc etc and in many ways are out of pocket for months on end whilst we wait for the money to be clawed back in.

My main real issue though is that some of the networks are not transparent in what you 'will' get paid on the next payment date, how much time do we have to waste going through the months to see what is now approved and when we 'think' it will be paid! Can't networks state 'your next payment date is x and will include £x'. AWin do this to a certain extent, but when approved commissions land inbetween month end and payment date the figure increases to higher than what you will get paid. Buy.at don't offer such a luxury, you just need to look two months back for approved commissions and as for TD, well, they even tell you which commissions they have submitted to the merchant and which they haven't, of which i don't really care, i just want the funds in as quickly as possible.

They are all overcomplexed and still have a lot of work to to be done here.

[kylah16]

I totally agree with Drivetowin. What I'm also shocked at is how Merchants are allowed to pay their invoices late - you already have to wait two months with Tradedoubler.
Some affiliates like myself don't have much money and it's frustrating that I've worked hard to drive sales to a big Merchant since November last year and have not been paid once even though the first payment was due on the 2nd January.
I really don't think it's fair that they can get away with that!

[aaclapham]

I don't know if its just me but I tend to promote the majority of merchants on networks that pay up quickly. Some networks are just taking the pi$$ in my opinion.

If you are merchant on one of these networks you are missing out on sales from me!!

[hirschnathan]

If networks like Paid on Results can pay on demand,

Just to correct you, por only pay when the merchant has paid, so they dont pay on demand.

[Paul Newton]

I just wanted to clarify the payment processes in place on the buy.at network at present.

A large proportion of our merchants are set up to pay affiliates in the second month after the transaction takes place, so January sales are paid out in March. A small number pay out after a single month delay and an even smaller number pay out only when transactions are approved by the merchant. These are typically processed before the second month of trade, but one or two merchants do take longer depending upon the nature of their offering.

I want to make it clear that buy.at;

a) Have a consistent payment date that you can rely upon (25th of the month for cheques, or the prior working day in case of weekend or bank holiday, and a few days later form BACS)

b) Have never withheld payments to affiliates if a merchant/agency has not paid us before the affiliate payment date.

c) In the past, have paid out to affiliates despite merchants or agencies not paying us on a number of occasions (be it through dispute or insolvency)

I can see your point of view that a two month lag is maybe not ideal, but the counter argument is that the risk of slow payment stops with the network, not the affiliates. We have a number of agencies and merchants that regularly pays us on 90 day terms (and even beyond!).

It wouldn’t be ethical of me to name and shame them in a public forum but trust me, we have had some battles that have dragged on for many months more than the two months before affiliates are paid. All of this goes on "behind closed doors" as far as affiliates are concerned.

If anyone has anything that they wish to follow up on this issue, or any other, please feel free to contact me any time.

[8601cam]

Shouldn't part of a networks 'value add' to affiliates and merchants be the ability to ease the payment burden on both sides?

Paul does make a good point about the late payment of certain partners. But it is for this reason that networks should minimise the knock on effect that ends up with affiliates having to wait long periods before payment with networks merely operating (where payment is concerned), as cash clearing intermediaries.

By paying AW affiliates on a 2 weekly cycle in advance of merchant payments it ensures a number of important factors:

1. We act as the financial buffer allowing merchants their own standard payment terms whilst paying out to affiliates in the fastest possible time frame.

2. All issues must be resolved quickly with the burden of responsibility residing with the network since legitimate commissions paid out cannot be clawed back. This ensures the network has a vested interest in both quick payment and dealing with concerns.

3. The resource and technology to offer this transparency must be in place for both parties to limit questions and concerns regarding sales and commissions.

4. Ultimately any network has to be able to manage the situation of cash flow with the confidence to pay out and retrieve payment without impacting on other aspects of the organisation such as service, technology and innovation.

All of this goes on "behind closed doors" as far as affiliates are concerned.

The question is whether this has a negative impact on affiliates or indeed whether it even should.

Kind Regards

Mark

[andrewshipway]

Surely the majority of merchants have cash at the bank. If they take card payments from consumers, they will have that payment in the bank very swiftly..

[ian-d]

True, usually next day, but that doesn't take into account cancellations, chargebacks etc, for which they do need to cover themselves on. They also need to ensure affiliates are following by the rules before approving etc. Certainly think all could be done and dusted within 28 days though.

[LateRooms.com]

an interesting and valid debate. we have a slightly different approach in terms of a travel merchant, as we don't take upfront payment - customers pay when they stay. this means a booking could be made today for a july arrival. we don't pay out until we get that booking revenue, so we have to pay affiliates on arrival.

however, a bulk of our lead-times are same-month bookings (as you would expect with our brand), which means that a bulk of payments are effected swiftly, therefore it's less of a problem.

we did find with one network we used to work with (and who shall remain nameless) that we were paying them monthly (as is our norm) yet they were taking 2 months to pay their affiliates - meaning we were paying them a month in advance, which was great for the network's cashflow, but pretty unfair on the affiliate, and us. worth keeping tabs on.

duncan

[jess1]

I don’t know what it is about money transactions and why we are a nation of late payers.
Is the statistics one billion owed in late payment. There are and should be no reason why any one cant pay at will, there are mitigating circumstances in some cases as one has been highlighted. Another reason for merchant not being able to pay twice a month is down to their returns policy and if they claw back from affiliates.

Prepayment is a good way to go forwards but again its down to the merchant if they can accommodate based on their payment terms.

So the question is, what do affiliates deem as a suitable period of time b4 they get paid from date of transaction or lead?
1 week, 2 weeks, 3 weeks, 4 weeks, 5 weeks, 6 weeks?

Also at what point do affiliates say.. this is an unacceptable period of time?