Who Are The Worst Commission Payers

[BILLYD]

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I thought this might be a interesting topic.......

Who are the worst holiday company commission payers in % terms

My choice for the top 2 are
Thomson holidays
Thomas Cook

It just so happens that they are the biggest 2 holiday companies

I know they are incentive based, but that is no good to affiliates who have a small site and only get a few sales a month......

The small holiday companies can offer % commissions 2 and 3 times more......
Can anyone explain why this is


Billy

[Chris Tradgett]

Hi BillyD

I'll not say this is the definitive answer, but if a customer is looking for a holiday, they know pretty much what a big brand has to offer so don't need a huge amount of research and of course they'll have a lot more on offer; a small unknown brand will get a lot of users clicking through to find out what they do.

So your conversion from click to sale with the major brands is always likely to be higher. In may cases the resultant EPC from a merchant paying 1.5% may well be higher than a non-brand paying 5% or more. So a smaller brand has had to pay more to get affiliates to promote them and as more enter the channel, the higher the 'entry rate' for an unknown brand to get looked at.

Thomson and Thomas Cook have always paid at about the same rates as now - so all the new entrants make their commissions look low - and as TC and TUI conversions are still OK, there's no need to lift them.

I think it would have been a better question to ask about EPCs - though not all affiliates will want to share that!

cheers

Chris

[Barry]

I wish I had a % for Thomson holidays instead of cash per lead + bonus.. . . . . ...

Ta

Baz

[mattg]

The small holiday companies can offer % commissions 2 and 3 times more......
Can anyone explain why this is

Billy, why do you think it is?

Make yourself a cup of tea, turn off your computer, go have a think about it.

Put yourself in the position of a major tour operator. You have a nationally known brand that you invest in every year with TV & print ads and a bunch more, you have a chain of your own high street shops, and a presence in many more. You maybe even have a TV channel. How does the affiliate channel fit in that picture? What does it do for you? (How important is BillyD in that picture?) What is it worth? What do your competitors do?

Do the same again putting yourself in the position of a smaller operation.

Break it down, think it through.

Hints:
* it's not about 'can offer'
* affiliate programs don't exist to make money for affiliates

Let us know what you think, & I'll say if I agree.

[Barry]

* affiliate programs don't exist to make money for affiliates

Good call. And a stark reality.

Ta

Baz

[BILLYD]

Hi BillyD

I'll not say this is the definitive answer, but if a customer is looking for a holiday, they know pretty much what a big brand has to offer so don't need a huge amount of research and of course they'll have a lot more on offer; a small unknown brand will get a lot of users clicking through to find out what they do.

So your conversion from click to sale with the major brands is always likely to be higher. In may cases the resultant EPC from a merchant paying 1.5% may well be higher than a non-brand paying 5% or more. So a smaller brand has had to pay more to get affiliates to promote them and as more enter the channel, the higher the 'entry rate' for an unknown brand to get looked at.

Thomson and Thomas Cook have always paid at about the same rates as now - so all the new entrants make their commissions look low - and as TC and TUI conversions are still OK, there's no need to lift them.

I think it would have been a better question to ask about EPCs - though not all affiliates will want to share that!

cheers

Chris

The 2 top mentioned tour operators are household names, but alot of the smaller holiday companies, do sell their holidays cheaper, than they do, identical holidays, to the same hotel, same board and even using their flights, yet the holidays can be over £100 cheaper per person.......

Billy

[BILLYD]

Billy, why do you think it is?

Make yourself a cup of tea, turn off your computer, go have a think about it.

Put yourself in the position of a major tour operator. You have a nationally known brand that you invest in every year with TV & print ads and a bunch more, you have a chain of your own high street shops, and a presence in many more. You maybe even have a TV channel. How does the affiliate channel fit in that picture? What does it do for you? (How important is BillyD in that picture?) What is it worth? What do your competitors do?

Do the same again putting yourself in the position of a smaller operation.

Break it down, think it through.

Hints:
* it's not about 'can offer'
* affiliate programs don't exist to make money for affiliates

Let us know what you think, & I'll say if I agree.

I do understand and thank you for pointing this out, this is what i wanted to know.......how other people see this and thats why everyone has their own opinion

But if i said to you.....You can have the same holiday for £100 less, than what these household names are offering......which one would you take ?

If you had 1,000 SMALL affiliates and each one had 1 sale per month, that is 1,000 sales per month extra you would have.......So Mr big who manages to get 20 sales per week on his big site, has only got you 80 holidays......so who are your main assets ?

I know what your saying "affiliate programs don't exist to make money for affiliates"
but those 1,000 small affiliates are a big asset to you, i know they have only made 1 sale each per month.......but those little cogs turn the big cogs.....

Is a 1,000 websites not better than 1 website ?

Billy

[BILLYD]

As far as the high street stores are concerned, you have to pay wages, gas/electric shop rental etc,etc.......what do you pay online

Advertising on the TV costs a lot of money for a small ad, what could you get online for the same investment and how many more people can see it....

Look at the USA president elections, they are now using the internet to get to more people than what they would if they had a ad on TV for each state.....most people have at least one computer and a advert on UTUBE/MYSPACE can bee seen by millions......

So they are now concentrating online, rather than the TV and it costs peanuts towards a TV ADVERT.......

So is the high street shop a thing of the past ?

If you had a holiday brochure........once it is printed, thats it, mistakes etc......
if you had a online brochure, it can be changed to suit anytime, you could even print out the page you wanted.

Can you visit a travel shop at 3am........or 24/7........(NO)....online you can

So does that not shift everything towards the........AFFILIATES

It would be very interesting to know how many sales a day a high street travel shop chain gets...... ?

and how many total sales the HUMBLE AFFILIATES gets in a day.......
Then you might have a answer to how important we really are

Billy

[mattg]

Then you might have a answer to how important we really are

Billy, what's the service you provide to your clients that they can't buy elsewhere for the same price?

[BILLYD]

Billy, what's the service you provide to your clients that they can't buy elsewhere for the same price?

It would be very interesting to know how many sales a day a high street travel shop chain gets...... ?
and how many total sales the HUMBLE AFFILIATES gets in a day.......
Then you might have a answer to how important we really are

I am not on about me.......I am saying ALL AFFILIATES (how important WE really are)

Affiliates sales (v) Their sales - gained without the help of affiliates

YOUR QUOTE : affiliate programs don't exist to make money for affiliates

Then who needs who the most........The Merchant or The Affiliate

To clarify it more.......I am a affiliate........Not a merchant

Billy

[BILLYD]

I will give you a fantastic example of a holiday company that understands affiliates...

It is........SUNSHINE.co.uk........On affiliate future

They give a very generous commission of 7%
They listen to what you have got to say and act upon it and i think they will go a long way.......and i wish them the best of luck

Billy

[voucherz]

I wish I had a % for Thomson holidays instead of cash per lead + bonus.. . . . . ...

Ta

Baz

Agreed - Have had a few sales worth over 2K - yet still getting the flat fee :-(

[pistol101]

I wouldn't even look at commissions when you start out, it's all about conversions. Start working on commissions when you know what works for you and your delivering volumes.

Remember that the big name travel companies are actually better off this year without affiliates. They have all seriously reduced capacity and are busy selling it with traffic directly to their sites.

Margins are very tight in travel at the moment.

[findlite]

On the subject of the internet and travel its a well known fact that the over 60's demographic book a fair chunk of the holidays on offer and tend to by phone or in person at a travel agent. In the past month i think the over 60 demographic became the largest in the UK for the first time and its a trend which will continue due to better health care etc etc.

Anyone who runs an internet only operation misses out on this and never forget that even today there are alot of people who just don't get computers, don't have the internet and just cant be bothered with it.

Its easy for us to forget that as we are at the other end of the scale. Completely immersed in the internet 24 hours a day :drool.

A good example is car insurance. AIG run Elephant.co.uk which is web only but also own other brands which are via the telephone like admiral. You cant afford to not sell to people who don't have a computer yet as they still makeup a massive section of the community.

[robermd]

One important issue that hasn't been mentioned, it that although the big tour operators may only pay 2% commission on sales, they do actually pay their affiliates on time.

A significant number of other smaller accommodation only providers that we have dealt with may pay 7%, but it's often 3 - 4 months (in one case 18 months) before you see the money, and then only after numerous emails/phone calls to them.