Hi everyone
First of all, a reassurance to everyone contributing to
this thread that the team at Dixons are aware of your feedback and we discussed each point in detail during our meeting.
What is the current commission structure?
Dixons react to market conditions by altering their commission month-on-month. However, the following can be used as a basic rule of thumb for understanding their structure:
Top Level (3%-4%)
- White Goods
- Televisions
- Home Audio
Mid Range (1%-2%)
- DVD & Home Theatre
- Gaming
- PCs & Monitors
- GPS
Peripheral (0.5%)
- Photographic
- Portable Audio
- Telephony
- Gifts
- Small Kitchen Appliances
- PC Peripherals
Non Payment
- Add-ons & Accessories
- Extended Warranties
- Services & Specials
Please note this is intended as a guide only for the purposes of this post and a detailed breakdown of current commissions can be found within your affiliate account.
Why do Dixons structure their payments like this?
When Dixons moved to Affiliate Window, we had an extensive conversation with them about how they envisaged the affiliate channel developing and in what areas it could add significant value to their business. Dixons want to use their affiliate partners to drive sales and grow their presence in the white goods, television and home audio product ranges.
For Dixons, the cost of generating sales for products within the peripheral group highlighted above, almost outweighs the benefit. This includes items such as digital cameras, mobiles, USB leads, etc. Dixons would rather affiliates avoided these product areas either because the margin is significantly less than in other ranges, delivery and fulfilment do not make the sale viable or it does not fit with their overall online strategy.
By weighting commissions towards areas they want to develop, a mutually beneficial relationship is established that allows for greater investment in the affiliate channel further down the line.
What does this mean to affiliates?
At first glance, it appears that the majority of commission groups are set to lower levels. However this can be misleading – although they account for a larger proportion of the product groups they make up a small proportion of Dixons sales.
For November 2007, commission groups with values of 0% and 0.5% accounted for only
3.13% of Dixons affiliate sales value. (This is excluding delivery).
If affiliates tailor their promotions to the product ranges with higher commissions, we have proved they can enjoy significant success with high EPCs and sales in product ranges that are in line with Dixons’ strategy.
Rather than restricting affiliate opportunities, this approach allows more flexibility for affiliates to work closely with Dixons in tandem with their strategy.
I hope this helps affiliates appreciate why Dixons have made this their long term strategy.
You are welcome to get in contact with either Richard or myself to discuss this further.
Best wishes
Julia