Do I have to pay commission twice for one sale?

[funfun168]

I want to sign up an affiliate network as a merchant

My company sell tailor made goods.

My company allows customers buy a few samples first. We ship them. After they try it, they choose the ones he likes, then we tailor made the products using the samples

Here is the case:
1: An affiliate refers its visitor, John , to my site
2: John visits my site, and he is interested in four products(product A, B,C & D), he bought the four samples from my site ($25 each, total=$100, free shipping)
3: I pay the affiliate $10 commission(assume commission rate=10%)
4: We ship the four samples to John
5: John receives and tries them, he finds that he likes product A&B, and don't like product C&D
6: John ship the 4 samples back to us. He tells us he would like to make tailor made product based on sample A&B and return product C&D. (The tailor made workmanship fee to be $25 each)
7: We issue $100 gift certificate to him.
8: John configure what he would like to do on product A&B and check out again(order total=$100, $25 each and $25 workmanship fee for each product)
9: We ship the tailor made product A&B to him, and bring product C&D to my warehouse.

If John buy again one month later(as a repeat customer), I would like to pay commission to the affiliate again for that order
May I know whether I have to pay the affiliate commission again on Step 8 and may I know how to avoid it?

Thank you

[Habtom]

May I know whether I have to pay the affiliate commission again on Step 8 and may I know how to avoid it?

Well, I think it depends on the deal you have, and how you want to keep your relationship with the person and for how long. If you don't think it is a long term relationship, set the commission a bit higher for the first time, and let the person know he/she won't get anything on repeat customers.

Or, you can put the commission lower, and the affilate gets a certain commission on the repeat customers, may be lower or may be the same amount.

But it depends all on how you want to handle the relationship.

Habtom

[edited by: Habtom at 7:43 am (utc) on Aug. 19, 2007]

[Essex_boy]

Youll find it easier to recruit affs if you pay out on all transactions by one customer for a given period of time, say a year.

[funfun168]

Thank you , Essex_boy
but if I do so, I would pay commission twice when John buy the custom product A and B.
If I cut the commission rate by half, the affiliate would not join my program.......

[funfun168]

Thank you,Habtom

Normally would a merchant pay commission to the affiliate for orders by repeat customers?

[Dinkar]

Actually you don't have to pay commission twice; but you should pay commission on step-8.

It's really pretty simple.

Customer has returned the product on step-6, so deduct the commission here.

And pay commission on stop-8 as the customer ordered new products.

[funfun168]

Thank you, Dinkar

This is a good idea

what evidence should I show to the affiliate and the affiliate network that the customer have returned the product to me?

[eljefe3]

It's much easier to keep an affiliate happy by paying recurring commissions.

[vincevincevince]

I'd treat this more as an exchange arrangement and pay the commission on extras only

Example:

Samples value $100
Returned (and via gift cert + $50 extra) exchanged for goods value $120

Original commission for samples sale: 10% of $100 = $10
Additional commission due to increase during exchange: 10% of $20 = $2

So yes, I'd expect you to pay commission twice, but only on the difference, so that the total commission paid is based on the total amount taken from the customer less the 'gift cert' refunds

You cannot be expected to have paid more commission than your total takings less refunds X the commission rate.

[funfun168]

Thank you, vincevincevince
Do I have to give any evidence to the affiliate and the affiliate network to prove the customer have return the sample to me?