The Dixons Commission Structure

[Julia Stent]

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

[Qui Gon Jinn]

Hi Julia,

Thank you for the report, but it doesn't address why Dixons, flouted good merchant / affiliate silent code of conduct by permitting (sneaking) 0% products into the feed, thus part of the initial question remains unanswered.

3.13% is 3.13%, on the figures so they "claim", doesn't matter if only 2% of that was attributed to 0% products, that is still money which otherwise could have been in the affiliates pocket & from a personal perspective 18000 clicks was lot more that 3.13% of the total clicks.

Also pointing out it's mentioned at 3.13% of sales value, what is the % of sales volume?

Maybe a different figure altogther. As white goods at £300 plus versus smaller ticket items at less than £30 for example offsets this by a 10:1 ratio and looks like possibly massaging the figures from the full facts. ie if three products sold at higher commission of £300 and one at 0%/0.5% (£30)this is a 25% of the sales order volume yet only approx 3% of sales value. Can you see how the figures given can be very misleading from the % of sales value you quote to the % of sales volume I quote and how there is a complete contrast.

All this has done is illustrate their own reasoning of commission tiers for product groups which in instances do not compare favourably with other merchants with a little sales pitch. In principle I like the concept of commission groups, but only if fairly applied & properly calculated for the higher grossing products, without liberties not being taken.

Thus the 0% products in the feed still remains. An answer hasn't been given!?

To complete the loop on discussions pertaining to Dixons. Here are the two main threads.

http://www.affiliates4u.com/forums/a...s-rubbish.html

http://www.affiliates4u.com/forums/a...stmas-not.html

[drivetowin]

Paul

I don't think it's really fair to say Dixons 'sneaked' the 0% and 0.5% products into the product feed, the commission tiers have been clearly shown on the Dixons programme page since the programme started - so no one can claim 'I didn't know' - the figures are there - and were also communicated on the forum and in an email back in September when some of the tiers changed.

The debate on whether they should be there is a fair one, but to say they 'sneaked' them is a misinterpretation of the true situation.

[Qui Gon Jinn]

"Sneaked" & with little consideration is what I will stand by. Your interpretation of sneaky maybe different to my own, mine refers to 0% products being included within a product feed in a "quiet & stealthy manner", done consciously (because how else could it be done) & with little consideration when they obviously knew they were in there..

I would also like to bring back to the point of why there is no mention of Dixons comments pertaining to 0% products actually being in the feed.

Was it .. oh affiliates won't mind & affiliates won't notice?

On a positive note, I think there is the potential for Affiliate Window to turn this around to their advantage, though my concerns are directly aimed at Dixons. AW have a very good tool continuously being developed in Shop Window, imagine the potential if this tool could allow affiliates to predetermine the commission levels on any given category, knowing the ranges on offer. That way perhaps feedback could fed to a merchant knowing they were not included in a product range by X% of affiliates because their offering was too low, it might actually make merchants appreciate the value of the channel & increase commissions appropiately (within an affordable level) in order to be included on a wider number of websites. That way the commission structure for any category might find it's natural equilibrium / level. Not the complete answer but maybe something to consider & expand upon in future discussions.

[Qui Gon Jinn]

A further feedback from Dixons please on answered questions or are they trying to lap up as much christmas trade as possible.