Forum Moderators: skibum
We run a small affiliate programme through Kowabunga (MyAP).
I've just received an email from them telling me that they're increasing their fees as of July. For us this will be a 400% increase, i.e. the new fees will be 5x the old fees.
Does anyone know what's happening here? Have they gone round the bend?
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i suggest you to go for shareasale i guess its affordable and reputed network
This coincides with Kowabunga's purchase by Think Partnership, so presumably someone at corporate level has decided they're going to dump their smaller merchants.
We may not be one of their bigger clients, but I'm certain we're profitable for them. They must be as nutty as a basket full of squirrels.
Affiliates should stand by for lots of smaller merchants who use MyAP to very suddenly switch to a different system, I'm sure we're not the only ones who'll be leaving them.
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Now, the new owner is seeking to maximize profits by increasing fees for "legacy" clients (that is, the clients who helped build the company), and they don't care that the real effect is to purge 80% to 90% of merchants from their system. I think it's a big mistake, but it's not entirely unreasonable.
I expect that many (perhaps most) of the merchants who leave MyAP will switch to ShareASale.com; a few who are absolutely focused on "the lowest fee possible" might move to one of the "lower-tier" networks like ShareResults or ClixGalore. I expect that some merchants who haven't managed their affiliate programs well are going to just shut them down.
I'm not sure why they don't just do this with new customers. I pay $1800 a year now. Is it worth it to them if companies like mine and a hundred others leave them? That's a good amount of money out the door and they really don't have to do much with me. I never call them. I'm pretty turn-key for them.
I'm still holding a wee bit of hope that enough pissed off clients replied angrily and they reconsider some of this. Not holding my breath.
I never call them. I'm pretty turn-key for them.
I'm the same. This is why I'm sure we must be a profitable customer for them. I haven't had any contact with them by email for a couple of years (until this happened), I don't think I've *ever* spoken to them on the phone (we're outside the USA). Every contact we have with them is automated. As far as I can see their only cost for us is bandwidth. So why they would want to lose profitable customers is beyond me.
I'm also annoyed that they've given us so little notice: the terms change at the end of this month, so that's less than a month's notice.
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Changing affiliate programs is a pain in the ass - notifying EVERYONE to change links, re-sign up to a new program etc. and for what reason do I make up why we are changing? That I am a cheap #*$! and won't pay $500 a month for my affiliates sake?.....I guess so.
I really didn't want to do this again.
You are paying $150 per month now, and there are probably something like 100 merchants in the same situation, let's assume with an average fee of $100 per month; I suspect there are a LOT paying the current $50 minimum fee).
Kowabunga raises the minimum fee to $500 per month. Now, assume that out of the 100 merchants who are currently paying less than $500 per month, 90 leave and 10 remain.
As of last month, Kowabunga was collecting $10,000 from these merchants (100 x $100 average each). As of next month, Kowabunga will be collecting $5,000 from the merchants who stay (10 x $500 minimum fee each). It has cut its revenue by 50% but has cut its related expenses by 90%.
The result is a huge increase in profitability -- if we assume that the cost to "maintain an account" is $50 per month, then Kowabunga has shifted from $5,000 profit on $10,000 in revenue (50% profit), to $4,500 profit on $5,000 in sales (90% profit). The customers they eliminated were generating only $500 profit on $5,000 in revenue (10% profit).
I still think it's a foolish move -- by pushing these smaller merchants to competitors, Kowabunga is reducing its own exposure to prospective new clients (if Widgets.com leaves Kowabunga and joins SAS, then when someone launches AllWidgets.com and looks at its competitors' affiliate programs, it will find SAS and not Kowabunga). Kowabunga is also creating discomfort for its larger customers -- those who are now spending $500 or $1,000 per month should be thinking, "maybe we are next," and so they may look for alternatives sooner.
If you're going to have to change solutions, it's better to do it now and give your affiliates 20 days notice, rather than waiting another 10 days and give your affiliates 10 days notice, or waiting until June 30 and giving less than one-day notice.
Of course, I assume that you can extend your Kowabunga contract for one or two months at the new $500-per-month rate, which might make sense to placate affiliates who can't immediately change their links. (This may be a nice little profit boost for Kowabunga to book during the normally-slow months of July and August.)
Moving an affiliate program is a HUGE deal, as you already know. You will lose 80% to 90% of your current enrolled affiliates, no matter what you do, and even if you provide a reasonable notice and transition period, you will probably lose 30% of your current affiliate-driven sales (possibly 80%) during the first month after the "old solution" is disabled. If you handle the move correctly, the transition can be a success. If you handle it badly, your affiliate program may earn a "bad reputation" that will stick for years.
I've worked with companies that have switched "affiliate solutions," and it's a process that requires a lot of planning and a lot of staff time to facilitate the transition. With good communication and planning, the program can actually grow from the experience.
Changing affiliate programs is a pain in the ass - notifying EVERYONE to change links, re-sign up to a new program etc.
I've been in discussions with MyAP about joining the network. This price strucutre is not new to me, I think I heard about it well over a year ago. I'm pretty sure it was high then.
I've not joined them yet because I am waiting for them to be able to offer support for sites which sell in more than one currency. However it looks like I will be joining them.
Although this issue does concern me a bit. I am concerned that the same will happen to us in the future as one month's notice is a joke, if that is true of course.
one month's notice is a joke, if that is true of course
It's less than one month's notice.
I can confirm that it's true - stickymail me if you like and I'll send you a link to our affiliate scheme, you'll be able to tell we're using MyAP.
The guy at MyAP with whom I'm in email correspondence is currently claiming that, although the fees change on July 1st and they only told us last week, this constitutes more than one month's notice because the July invoice doesn't come through until August. Which is the most transparent line of bull**** that I've come across for some time.
I think they're handling this very shabbily. Sure, it's their prerogative to change their fees, but to do it at such short notice for such a massive change is very unprofessional. I'm surprised to see what was formerly a decent company behaving with such little integrity.
I'm sure they're in breach of the new parent company (Think Partnership)'s ethics code, I'm making a complaint to Think's auditors under their whistleblower provisions.
I guess we'll all know for the future that Think Partnership's portfolio firms are worth avoiding.
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still think it's a foolish move -- by pushing these smaller merchants to competitors, Kowabunga is reducing its own exposure to prospective new clients
Also, it's bound to give MyAP a bad reputation in the industry, particularly as they've made the change with such a desultory notice period: anyone who's currently managing a MyAP affiliate programme for a small merchant, and moves jobs to start a new programme at a larger merchant in the future, is likely to avoid MyAP now.
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Also, it's bound to give MyAP a bad reputation in the industry, particularly as they've made the change with such a desultory notice period: anyone who's currently managing a MyAP affiliate programme for a small merchant, and moves jobs to start a new programme at a larger merchant in the future, is likely to avoid MyAP now.
Yes. Aside from my own sites and business - I consult and do SEO/Marketing projects for others. Part of my service is recommending tools like affiliate programs. MyAP is on the "do not use" list right now. Although I still may be forced to stick with them for a little while.
I can't change this %hit in a month. I also can't afford to lose any affiliates right now. Actually I'll need to add more to make up the $. So, I hope I can either negotiate something with MyAp or switch to something in a few months when I know I will not lose what I got. Too much pressure to switch now, so they'll get my $500 at least once most likely.
Second Bite has some privacy implications that may "spook" some consumers. And as noted in this thread, Kowabunga has just given less than a month's notice of a 10x increase in its minimum fees.
I haven't talked with anyone in the industry who thinks that any of these changes are positive. I believe that the buyer here is seeking to make fast profits by exploiting a company that has a long history and once had a stellar reputation. Merchants who use Kowabunga are now faced with the very real possibility that their affiliate lists and sales data may be resold to competitors, or otherwise exploited in ways that were never anticipated when they began doing business with Kowabunga.
