affiliatemarketingblog online marketing blog

Take a cut in pay, stop selling so much or we will drop you!

Written by FlamingoGirl on February 20th, 2009

From an email recieved a few minutes ago:

“As you may know from previous experience, XXXXXX works each month to a set budget. While in the past, if they surpass that budget, we have been forced to remove partners. This is never ideal and we want to prevent this from happening as much as possible. As of right now, we are on track to surpass our February budget. To prevent this, we are asking you to take a 1% commission cut through the rest of the month.

We ask that you opt into the lower-commission offer immediately, or we will have to remove you from the program. This is only a short-term adjustment, so we thank you, in advance, for your cooperation and understanding.”

So do they want us to make sales or not? If we make too many then they might go over budget and we will be removed. To make sure they don’t go over budget they want us to send the same amount of shoppers but get paid less?

I don’t understand companies that lump affiliate marketing into their advertising budgets. There should be no budget as they don’t pay out more unless more sales are made.

Post to Twitter Post to Plurk Post to Digg Post to Ping.fm

This entry was posted on Friday, February 20th, 2009 at 12:29 pm and is filed under Cyber Babble. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Cyber Babble
  • http://www.jgoode.com jgoode

    I agree, I think the goggles some decision makers are wearing right now have a little too much mud on them. They need to take them off and look it from a new perspective.

  • chris

    wow, thats a new one…haven't heard of that strategy before in the schools of Affiliate Marketing. “Congratulations on your success. Now Stop it”.

    i cant believe other companies are not jumping on the bandwagon to bring that award-winning plan to their programs. NOT!!!!!

  • http://www.amnavigator.com Geno Prussakov

    Telling affiliates that if they don't “opt into the lower-commission offer” they'll get removed? Someone pinch me! I must be dreaming. . .

    BTW, is it a CPL program?

  • http://judimoore.com Judi Moore

    I hate when merchants act like small town retailers. I posted about your post and tried to trackback, but I don't think it worked. Anyway – You Go Girl!

  • http://www.shareasaleblog.com brianlittleton

    My mind is spinning on that one. Sorry that you're going through it. :(

  • http://SnowProfessor.com SnowProfessor

    Seems counter intuitive to how affiliate marketing should work…it's performance driven. As long as you are turning good ROI, you should be able to do whatever you want. Profit from affiliate sales should be used to fund future sales.

    Also, on a commission structure, the merchant always wins–unless they have set up their commission structure to be unprofitable.

  • http://www.danielmclark.com Daniel M. Clark

    Although I understand why, I wish you didn't have to XXXX out the merchant's name… it's a shameful practice and they deserve to be outed in a very public way. Some people are just utterly clueless.

  • http://judimoore.com/?p=49 jMoore!

    Merchants can be idiots…

    Connie at I am Flamingo describes the worst way a merchant can look at budget cuts. She posted an excerpt from a merchant communication informing her that because their budget was almost gone for February, she needed to take a cut in commissions or se…

  • http://www.mgecom.com Matt Enders

    As I see it, whoever runs this affiliate program did not set it up correctly from the beginning. Step 1 in any affiliate program launch should always be, “figure out what commission rate you can pay and still be within overall margins”. This means a merchant has to consider, at a minimum, Their average margin, the commission they are paying to affiliates, the % the network is going to take, and the amount they are paying someone to manage the program (in house or outsourced, both cost a company money), and any discounts given to the customer. If the program is setup correctly at the beginning, then every sale which comes through the affiliate program SHOULD be profitable, even if only a small margin. It sounds to me that the company did not put in the time to figure out how their payout would affect their overall business.

    In my mind, you should be ecstatic to cut a $250,000 check to an affiliate in any given month. Why? Because you as the merchant should have made money as well on each of those sales. I know it can be hard to figure out every variable in advance, but as an affiliate manager/merchant, that is one of your main jobs in this industry.

  • http://www.shopping-bargains.com/ Mike Allen

    This is about as senseless as it would be to say the following: “The affiliate channel is performing better than we anticipated. Since we don't want to earn more than [insert value here] per month, we will have to cut back our marketing efforts. We know affiliate marketing works and so we are reducing our efforts there since we can track exactly how much we have to cut to avoid exceeding our earnings limit.”

  • http://www.netspray.com carrie

    “Thank you, in advance, for your cooperation and understanding,” so they think that you'll just accept a lower commission rate? Bogus!

  • http://www.netspray.com carrie

    “Thank you, in advance, for your cooperation and understanding,” so they think that you'll just accept a lower commission rate? Bogus!

  • http://howtosnowboardhq.com Contact

    Why would you even want to do that? What are they really thinking…seriously.