This week I had the good fortune to meet with a couple who
own one of the dating services that I promote at
Sage-Hearts.com.
The extraordinary effort they made to travel to my location
to discuss business over dinner speaks volumes about the
value they place on their affiliates and their program.
They certainly didn't need to travel so far to make me aware
of their care and concern.
I've been affiliated with their program almost since its
inception, and have always been impressed by their fair and
ethical partnership approach.
Right from the outset, they paid one of the highest
commissions in the Internet dating service industry, and
continue to do so. They share commissions on both new and
recurring subscriptions equally with their affiliates.
Compare that with companies that have lowered commissions to
a paltry 15% despite the increasing costs to advertise an
affiliate site. Or how about those merchants that split
affiliate commissions 50/50 on initial subscriptions, but
not on recurring monthly fees.
Let's look at how much the merchant and the affiliate
partner will each earn, based on a fifty/fifty non-recurring
split.
According to industry statistics, a consumer who buys an
Internet dating service membership, will remain a member for
about 6 months. If the monthly membership fee is $25, the
gross revenue over six months will be $150. The affiliate's
share of the proceeds is $12.50, or 8.3 percent of the total
money earned.
Considering that advertising costs usually eat about 50% of
my gross income, my net profit in this particular case is
reduced to $6.25, or 4.16 percent of the total. The merchant
makes $137.50, and my take is $6.25. Even if the merchant's
expenses amount to fifty percent of their gross, they still
earn $68.75, or more than 10 times the amount they pay their
affiliates.
Is that fair?
Some may argue that merchants are entitled to a
significantly higher take because they invested in the
program software and have to hire staff to provide ongoing
customer service.
Bah humbug.
From the perspective of someone who also owns an online
dating site, software development is a finite business
expense and a tax write-off. It's not a cost that should be
indefinitely borne by affiliates. If the software is written
correctly, customer service is primarily self-service, as
signup, initial and recurring billing are all automated
processes. Hiring staff to provide timely responses to
customers and affiliates costs only a tiny fraction of the
proceeds, and in some cases, doesn't seem to be a budget
item at all.
The point is to know your industry both from the affiliate
and the merchant perspective. If your assessment uncovers a
less than equitable commission structure, get in there and
negotiate a fairer deal. If the merchant won't budge, go and
find a better program.
The merchants with whom you want to do business - or have
dinner - will understand from the outset that fifty percent
of your sale, is better than 90 percent of no sale at all.
Web Design - Software Sales - Site
Promotions - Programming
