Forum Moderators: skibum
I started to get a few nice sales each week and then all of sudden around 90% of the sales got cancelled, the reasons given in the stats was what that they were credit card frauds. I found this really strange, because as a merchant I never had a fraudelant sale. I complained to the affiliate network and told them reason why I thought it was strange. The affiliate network agreed and said it does sound strange and even admitted that this merchant has an unusually high cancellation rate, compared to the other merchants, more alarms bells ringing for me! They said they will contact the merchant to query them and let me know. They also said to do a test by purchasing something myself and seeing if gets cancelled, I'm not spending my money on a $600 product just to see if they are dodgy or not.
They got back to me and told me the merchant said a few of the cancellations were that the customers had changed their minds and the others were credit card fraud from different countries, they said they are HAPPY with the merchants response. Um ok well what can I do?
So dodgy, my traffic is highly targetted and I never once had a fraudalent sale when I was the merchant, now all of a sudden the same traffic turns into fraudsters and i'm getting 5 fraudelant sales a week, coincidence? I think not.
I couldn't just switch to another merchant because this is the only merchant that had an affiliate program in my country for this product. I had good thing going but now I will no longer promote them.
I've thought of system which could would weed out dishonest merchants. Everytime this is an affiliate sale, it could also send the customer and product information to the affiliate network, this way the affiliate network has a way to ask the customers themselves whether they did a make a purchase or not if needed . Perhaps there are privacy issues with this I'm not sure?
This would also pick up if there was something wrong with merchants system.
This would weed out the dodgy merchants and make affiliates feel more trusting and work harder to promote the honest merchants.
It would require a little more integration between the merchant and the affiliate network, being a programmer I know this is not that difficult.
The networks make money regardless of how well or poorly the affiliates' business is working, and do very little for their cut. Until this changes and they are forced to add value in return for taking a margin, the networks remain an unnecessary middleman in our business.
The networks make money regardless of how well or poorly the affiliates' business is working
Not always true. Take the example of merchants defaulting on CJ - CJ don't get paid either, although I believe CJ should still pay out to affiliates, as some other networks do.
CJ
Linkshare
Shareasale
Performics
Those are the larger ones I am aware of. There may be some smaller ones.
Do you have other business relationships active? Google Adsense? Chitika? Amazon?
When one part of the online business fails, you should always have a backup plan with alternatives.
Maybe I should start my own affiliate network that has this feature, which prevents merchants from defaulting on sales, it doesn't seem so complex. I'm really not sure about merchants giving customer information though, althought I'm sure they could come up with some T&C's for it.
The problem that you face (first post) is one that can be avoided by diversification of income streams, a subject on which I have posted extensively elsewhere.
no network pays out when they've not been paid by their merchants
Not true of every UK network. Off the top of my head, I believe Affiliate Window and Buy.at both pay out, even if merchants don't pay them.
do you have any proof, or is it just your assumption?
Not an assumption, rather I've had this conversation with my contacts at the some of the UK networks. The reason I said 'if memory serves' is because they were verbal conversations (not emails/IM), so I can't check the exact wording. I've been lucky and it's never been an issue with any of the merchants I work with.
I had meetings with senior staff at Buy.at and Affiliate Window earlier this year regarding another matter, but - unless I'm very much mistaken - they both told me they have done and will continue to pay out when merchants default.
WebGains (UK and Europe) use prepayment for the majority of their merchants, which reduces the chances of affiliates getting fingers burned.
And when the network does have prepayment, the big brands won't deal with them, which is why AF, AW and Webgains have loads of tiddly merchants and very few big brands.
Big brands like to bully networks, and most will roll over and do whatever it takes to get their business. Until this changes, networks remain the lazy amnd wasteful middle men of our industry.
