Forum Moderators: skibum
Judging from the SE landscape and some of their financials in press releases, generating 0.5% to 1% of thier annual sales with a fairly significant investment of time & money is not out of the question.
Is it generally better to bring up long term sales incentives right at the start or send em' say 50K in sales to prove you can deliver and then start talking about big annual sales goals and incentives?
After the first 50k in sales, assuming not to much changes (big asumption), it should just roll from there without much more work and should be pretty easy to forecast annual sales rates. It is the type of setup where links can be switched to a competitor at the drop of a hat, but is also something the merchant could fairly easily replicate if they have good tracking tools.
Good Question. I would probably say once you have proved yourself. Is this another of those GoogleCash money makers?
C.K.
Are you against Google Cash now? I admit it is getting harder, but it is a great learning expierence... Especially when you are promoting only CB products.
I may start doing a website affiliate thing soon though too. Much more predictable I think than relying on AdWords.
C.K.
As a merchant, I'd definitely want to see a solid track record from an affiliate partner before I committed to altering my payment scheme. Like most things in life, I think it is important (and a much more powerful statement) to prove yourself first and then wait for the spoils.
It's analogous to the employee who demands tons of stock options on the first day of work, or the new associate attorney who wants to be made partner in his first month. Bring in the business, and then we'll talk.
Of course, if you can demonstrate to the merchant that you have had great success with other programs in the past, that might make it easier for the merchant to make you a sweeter deal sooner rather than later.
AdWords to affiliate programs still works in some spaces but its getting mighty tight virtually everywhere as far as I can tell. It seems to be going from finding needle in a haystack to a gold spec buried somewhere at the bottom of the ocean, but like anything else, it can still work.
Moving more towards building sites here too. Then you actually have an asset to build on instead of just a campaign that fails eventually when the market for AdWords gets completely flooded.
Would you be open to bonuses based on sales targets from the start that are only awarded if certain sales targets are met, i.e same standard commission rates as everyone else unless aggressive periodic sales levels are achieved?
I would certainly entertain that notion of yours. You get paid the same as the rest but if you achieve certain agreed milestones then I believe that you have obtained the right to be judged at a different level to the rest. I am a merchant and would be very welcoming of that approach as it means more sales for me, Having a track record would convince me further (does not matter what industry you come from)
As ymkg has mentioned though I would also be hesitant of having an agreement from the word go which gives someone a better deal before proving themselves.
If you deliver the goods I would reward you better than someone else who can not deliver to your ability.
It has to be a “you scratch my back I will scratch yours” kind of arrangement
The structure that you propose (bonus if certain milestones reached) seems to make sense. Both affiliate and merchant are clear on the parameters, and it's a win-win both everyone. Not to mention, it is easy to track, you simply pay the bonus if the quota is met. No messing around with several different commission structures for various productive affiliates.
My personal rule about important partnerships with merchants is to structure the agreement such that they're happy with what you're doing and that it always remains profitable for them, so that they want you to achieve those targets.
In every case, if I want to work with them, I make it clear that I intend to deliver them a significant volume of business, based on my business with other similar merchants. Even if this is not true, I explain that I don't set things up for small traffic.
I then make it clear that I'd like to start on their top tier, and will happily refund them in the event that they are unsatisfied with the volume - I've yet to refund a penny to anyone.I also encourage them to talk to other merchants that I work with, if they want to back up my claims.
So my advice would be to start by demanding the most, based on your known power to deliver them business. It earns respect, and if carried out professionally, sets an excellent basis for the future of the relationship.
Best Negotiable Alternative.
With it, you are super man. Without it, you're just a chest thumping pud (ok, bit of exaggeration..)
Still, shop around with the competitors you've talked about and get some tentative agreements. Let them know how well you're doing (but try to avoid specifics, especially names of who you're currently working with).
And then go back and tell your advertiser what you'd like to see for compensation. Base it on what you've talked about with their competitors. Mentioning that you've talked to specific competitors is a bad idea .. just that you've been talking to your friends in the industry and they think the new #s are more appropiate.
Try to develop a specific, agreed upon time-line with your current advertiser to come to a negotiated conclusion so that if time is important to you, you can develop a paralell negotiation with the other interested firms if it looks like negotiations aren't going well with the first.
The agreed timeline is also an ethical way to treat your advertiser. They will now know that they need to respond to you within a certain period of time and if they don't, you're welcome to go elsewhere.
If you do switch, how you start working with your alternative is just as important. You may want to ease your new folks in. Do a soft roll out and start out by just including some links alongside with what you already have. Or use cookies to send 25% traffic one way, 75% another.
Consider broaching your current advertiser first to let them know that you don't want to do all this because your current deal is so sweet, but that you want to do this because your 'partners' are afraid of tying so much revenue up in one company or that they think they can get more revenue this way.
Faking a bad cop/good cop is a given in any good negotiation, as it lets you stay on good terms with the other side.
In fact, quite often, the other side knows your faking bad/good copy and plays along just because they don't want it to get personal either. After all, it's only business and who really needs the extra headache.
And if things go awry (the new advertisers turn out to be flakey) .. it'll be a lot easier to come crawling back. :)
Still in the end, it's really all about the alternative advertiser. The existence, offer, and risk of going with that alternative advertiser will (and, really, rightly should) realistically price out what your 'bonus payment' should be about.
BNA is a fundamental cornerstone of capitalism's first rule - price is a factor of supply and demand.
BTW if there are no competitors, consider approaching someone and mentoring them into a becoming a competitor.
Though try that one .. and beware! ;)
What has concerned me for a while is that I don't have a BNA... the only thing I can think of that I can put to the merchant is this:
"If you increase my compensation, I'll do more of what I'm doing and you'll make more sales. If you keep my compensation the same, I'll concentrate my efforts on other things and I'll increase my income elsewhere.
"Since you pay me a fixed commission per sale and your products vary in price, it's probably in your interest that your number of overall sales increases. Increasing the level of commission you pay me would be a good way to incentivize me to spend more of my time making your programme work."
That way it's a time issue - either I can spend more time on their programme or I can spend more time on other programmes... it doesn't have teeth though, does it?
