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Merchant Not Willing to Pay Affiliate Commission

What legal steps can I take?

     
9:11 am on May 10, 2008 (gmt 0)

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Hi,

One of my merchants of whom I am an affiliate is NOT paying my commissions since Jan, 2008.

The amount runs into hundreds of dollars.

What can I do to get my money? Do I have any legal options?

Any help would be great.

9:52 am on May 10, 2008 (gmt 0)

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What reason do they give?

If they are in the same country as you, then check the contract, and see a lawyer.

If they are in a different country, chances are you've been scammed.

5:12 am on May 12, 2008 (gmt 0)

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In a different country.

Though when I told him that I will start taking legal action, he replied saying I am looking into the matter. The point is I donít think he has any intention to pay. He just bought some time to discuss with his friends/lawyers to access what action I can take if at all.

5:44 am on May 12, 2008 (gmt 0)

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Was it through a network or an individual one on one arrangement with the other party?
5:46 am on May 12, 2008 (gmt 0)

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Give him a reasonable period, then consider bringing the matter up on related forums (for every affiliation, there's always at least one!).

Unless he owes you tens of thousands, international law won't help you much.

Warning others (and applying pressure via other affiliates), just might work.

6:31 am on May 12, 2008 (gmt 0)

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Marcia I signed through a network and a very popular one. You may be right I can mail the network owner too.

Quadrille this is exactly what I was thinking. Thanks anyways.

8:11 am on May 12, 2008 (gmt 0)

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Absolutely contact the owner, in fact specifically by name if possible (which it is, in some cases). No doubt you're not the only one this has happened to.
4:35 pm on May 12, 2008 (gmt 0)

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Kfish, I don't want to discourage you, but if your are in (the affiliate) business, this is not very rare. For anything in the low 3 digits I don't even bother anymore. If a merchant is more than one month behind in payment I stop investing in them. Anything over 2 months and I put warnings on public forums. If they owe me over 3 digits I hire some legal muscle to take it from there. And yes, even the large networks, for example CJ, have merchants that do not pay their affiliates according to their agreement.

[edited by: BrandNewDay at 4:44 pm (utc) on May 12, 2008]

5:31 am on May 13, 2008 (gmt 0)

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BrandNewDay I am in the affiliate business for 4-5 years and I had an absolutely smooth experience as far as payments are concerned. This is the first time someone is unwilling to pay. Though when I warned him he says he will look into the matter.

Just to tell you there was a guy who closed his business (declared bankruptcy). I was his affiliate. The payment threshold was $50 and I had made $44. I mailed him and told him since your business is closed there is no way I can reach that mark. And the next day he sent me a check. :-)

You may be correct, but it depends on with whom you are signing up. I do a proper research before agreeing to be an affiliate.

6:09 am on May 13, 2008 (gmt 0)

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I generally shy away from indies, but I had one with one small sale from some obscure page that closed their program and sent me a check (it was either $16.42 or $6.42). Another at a big network closed their program and I got a check from their management company which I never deposited - good thing, all the checks from that mgmt. company bounced for a while and people got hit with bank charges.

Regarding the small networks, some can have some a very tacky, questionable colllection of "merchants" on board (especially with a very low entrance required), while there's one fairly "tiny" one (who I won't name, of course) that is as solid as a rock, though they're fairly top-heavy in 1 or 2 niches. Even if a merchant were to turn out to be a scoundrel, the network would cover the affiliates' commissions due themselves, and they won't let merchants slide. But they're very particular in personally screening, both for merchants and affiliates.

KFish, I have a suspicion who this might be, and though I doubt it will do any good, it's due diligence to contact the network anyway.

[edited by: Marcia at 6:15 am (utc) on May 13, 2008]

9:40 am on May 13, 2008 (gmt 0)

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But they're very particular in personally screening, both for merchants and affiliates.

Right on the nail - while you must do your research before becoming an affiliate, be suspicious of an affiliate scheme that fails to do its research on you. If they accept any Tom, Dick, Angelfire, and Etch-a-Sketch without asking for background info, then you may be picking a loser.

There's exceptions even to that warning - I'm an affiliate for one scheme that allows almost anyone in, but the only risk to me is the most recent transactions, as it works on a drop shipping basis. And a few sales a month at $100+ where I get to keep 64% has to be worth a little risk!

But, in general, I'd go for schemes where I can respect their behaviour; I like them to be choosy.

[edited by: Quadrille at 9:41 am (utc) on May 13, 2008]

1:24 pm on May 13, 2008 (gmt 0)

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BrandNewDay I am in the affiliate business for 4-5 years and I had an absolutely smooth experience as far as payments are concerned. This is the first time someone is unwilling to pay.

Then you are either extremely lucky or much smarter than I am.
I have always been careful with chosing my merchants, but have been disappointed numerous times.

7:41 am on May 14, 2008 (gmt 0)

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BrandNewDay I donít know if I am lucky or smart, but Thank You anyways.

I also look for brand reputation of the company before applying to be an affiliate. Better reputed companies usually pay their affiliates on time.

I have given him time till 15th of this month, after which if he fails to pay I will start taking action.

8:11 am on May 14, 2008 (gmt 0)

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KFish, if this merchant is in the US, and it turns out that other affiliates have also been done in, you might want to print out copies of both the network and merchant agreements. There could be recourse, legal and otherwise, other than costly litigation.

Start gathering documentation, like sources of traffic, print-outs of network sales and earnings (and reversal) records, etc.

12:24 pm on May 14, 2008 (gmt 0)

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And a few sales a month at $100+ where I get to keep 64% has to be worth a little risk!

Quadrille never heard of this. 64% commission? The most people are willing to pay is 25-30%. Exceptions are downloadable products like ebooks etc. Is this a downloadable product too?

Marcia I will do that thanks.

[edited by: KFish at 12:26 pm (utc) on May 14, 2008]

8:29 pm on May 14, 2008 (gmt 0)

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Not downloadable, but not bulky, and it's nice work when I can get it.

I think it helps that the company have no web skills, so many affiliates (including me), rank better than they do. But they aren't about to starve on their 36% :)

But I've always preached that for the little guy (I'm 5'9"), niche markets are the only way to do well. That's why Amazon only pays me 6% (or thereabouts).

6:58 am on May 15, 2008 (gmt 0)

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Hi guys, there is some good news. He has finally paid me. :-)

I threatened him with whatever I learned from this thread and the poor fellow go so scared that he paid me.

Thanks to all of you for your valuable comments/suggestions.

Thanks to the owner of WebmasterWorld too. Your site helped me to get my money.

BTW Quadrille 5'9" seems to be above average height. ;-)

8:41 am on May 15, 2008 (gmt 0)

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Congratulations; our bill for 15% is in the post, and if you don't pay, we're starting a thread on how to make you pay :)

5'9" seems to be above average height.

Depends if it's 'real height' or 'internet height' ;)

6:13 am on May 19, 2008 (gmt 0)

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Just to tell you there was a guy who closed his business (declared bankruptcy). I was his affiliate. The payment threshold was $50 and I had made $44. I mailed him and told him since your business is closed there is no way I can reach that mark. And the next day he sent me a check. :-)

If the company was in bankruptcy and he paid you with company funds, he broke the law. Don't count on that happening again.

You're very lucky if you haven't been an affiliate of a merchant who was under bankruptcy protection who did follow the law. There are many very large companies in the major networks who are currently under bankruptcy protection. Their affiliates will never see a penny of their pre-bankruptcy earned but unpaid commissions.

Fortunately, I've only had one merchant go bankrupt and that was Delta Air Lines.

5:38 am on May 20, 2008 (gmt 0)

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Thanks MyNewPC I didnít knew it. I should have thanked him.

Their affiliates will never see a penny of their pre-bankruptcy earned

If the employees can get their payments pre-bankruptcy, I donít see an issue with affiliates not getting paid. If this is the law then it should be amended.

Quadrille I can pay but the amount will be so less that you will laugh at me ;-)

8:46 am on May 20, 2008 (gmt 0)

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:)

If the employees can get their payments pre-bankruptcy, I donít see an issue with affiliates not getting paid.

In bankruptcy, there's two issues that apply here;

First, there's a certain order of priorities for payouts; employees are fairly high up that list, as the employer has duty of care - the employment contract suggests that if the worker works, then the employer pays. For affiliates, the contract is more 'one to one', a partnership. So the payout priority is lower.

Second, the official in charge of the liquidation decides who gets paid and when - the bankrupt is not allowed within 23.8 metres of the checkbook.

BTW, I am not a lawyer, and these details will vary a lot between countries, and your mileage may vary.

[edited by: Quadrille at 8:46 am (utc) on May 20, 2008]

9:45 am on May 20, 2008 (gmt 0)

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the bankrupt is not allowed within 23.8 metres of the checkbook

Quadrille, I must admit - you have a great sense of humor. :-)