[hummas]

Dear Retailers.
Your efforts are well respected and we look forward to doing more business with you.
Due to this severe downturn in the economy, we will have to send less clicks your way.
This decision was not taken lightly, and was thought through at the highest levels within the organization.
Please accept our new terms by December 23rd, if you do not, the new
terms will automatically kick in and we will decrease your traffic by 50%.
Thanks again for your hard work and we look forward to doing less business with you in 2009.

Sincerely your cheap and almost free traffic portal.

Hummas the affiliate

Seriously, How many more retailers are going to reduce our pay due to the
economy. Are we not subject to this downturn also? Do they dictate to the
TV and Newspaper folks how much they will pay for ads?

[Greywolf]

Do they dictate to the
TV and Newspaper folks how much they will pay for ads?They don't dictate, but they do have a say. Businesses shop around for the best value for their ad dollars, and the economy does have an effect on how much advertisers are willing to pay

Superbowl Advertising Rates post small decline in 2008
http://pbp.typepad.com/economy/2008/01/superbowl-adver.html

[ecomcity]

No reduction in commissions are necessary... nor raising of retail prices. Simply remove coupons from your marketing mix and leave them to food stuffs and pizza parlors. Actually makes sense to raise the commission rate on every referral sale that doesn't include a ROI killing coupon.

[Aamir]

I think it will all depend upon the merchant. Some will be forced to reduce their commission, due reducing margins. This is especially true in the UK, when the weakness of the £ has meant importing goods has become more expansive.

At the end of the day, affiliate marketing is amongst the most cost effective ways to acquire customers. So it merchants should be aware not to alienate their affiliates.

Aamir

[TerriFalcone]

Dear Retailers.
Seriously, How many more retailers are going to reduce our pay due to the
economy. Are we not subject to this downturn also? Do they dictate to the
TV and Newspaper folks how much they will pay for ads?
Who said they are going to buy TV and print ads or when they do that they won't negotiate rates that are lower than they were previously. Sorry to say but we are in a deep recession bordering on depression and almost everyone is feeling the pinch. Unless of course you are providing a huge percentage of their income or your sales have increased dramatically in the last few months. If that is the case and you have been getting form letters then I would write to whomever is in charge of their programs and let them know that they are throwing out the baby with the bathwater and that they need to reevaluate their reduction.

[peteg00_YIM]

I can say that the remnant media availability is increasing

[sunshiner]

No reduction in commissions are necessary... nor raising of retail prices. Simply remove coupons from your marketing mix and leave them to food stuffs and pizza parlors. Actually makes sense to raise the commission rate on every referral sale that doesn't include a ROI killing coupon.

Actually, coupons are a great incentive to make a shopper complete the purchase. If you are giving a 5 or 10% off coupon, and you make 100 sales, as compared to no coupon on 10 sales, you do come out ahead (in most cases because of a high market up products, ie: jewelry). So in essence, a coupon does make sense. Plus, since commission is being paid on the lesser amount, price minus the coupon, the merchants is paying out less commission. To me, having been in the retail business, its definately a win situation for the merchants.

[ETRdahir]

Great point sunshiner, but shouldn't merchants pay affiliates commissions on the PRE-coupon price (normal price) of the product? Short the margin of profit made per item sold with the coupon but not the affiliate commission if possible. I mean when factoring in a coupon you are already expecting X number of additional sales to make up for Y discount on each product. But still the Affiliate needs to be compensated the same. If not you are really just paying a Sales rep a smaller commission for a discounted product when the number of products being sold is greater (or should be) due to the discount. :errr:

[sunshiner]

Great point sunshiner, but shouldn't merchants pay affiliates commissions on the PRE-coupon price (normal price) of the product? Short the margin of profit made per item sold with the coupon but not the affiliate commission if possible. I mean when factoring in a coupon you are already expecting X number of additional sales to make up for Y discount on each product. But still the Affiliate needs to be compensated the same. If not you are really just paying a Sales rep a smaller commission for a discounted product when the number of products being sold is greater (or should be) due to the discount. :errr:

But, if I'm anticipating more sales due to the coupon, than I don't mind taking a lessor payout of commission either. If you give me a 15% off coupon, but my competition only has a 5%, I can pretty well assume that I am going to do at the minimum 50% more sales then he is, and though each individual commission is less, the total of all sales makes my commission higher, so, for me, I'm further ahead taking the commission based on the actual sale price rather then what it would have been precoupon, IF, I have a coupon that will close the deal for me. I'm also better off having sales with a coupon then not having any without the coupon. Its all basically a numbers game, but bottom line is, some sales are better then no sales, and some commission is better then no commission.

[ETRdahir]

Another good point.. There is not much I can debate here. I guess at the end of the day you just have to test and see which payout to coupon structure brings in the most profit and restructure if needed as you go along.

On a bit of a different note my affiliates receive a Commission bump once they reach a certain threshold in sales i.e. 10,000$ - 10% increase in payout, 25,000$ - 20%, and 75,000$ - 30% increase. This has worked well thus far since it promotes a competitive program and compensates affiliates for all their hard work.

Regards,
:)