How Merchants Are Divying Up Your Commissions Among Themselves and Their Partners

Let’s take a small scenario. What if I promised you that if you spent 8 hours a day promoting Billy’s Shoes, and I’d pay you a commission for all the shoe sales you sent me? If you did the promoting and I paid the commission in a timely manner, we would theoretically be good partners.

Now what if I also owned Billy’s Auctions, Billy’s Games and a dozen other companies – and as soon as you sent me your hard earned shoe visitor, I’d try to steer them to my other sites instead; earning myself money and not having to pay you a commission. That could hardly be called a “partnership”.

Well welcome to Affiliate Marketing 2011.

This trend has been building steadily, and has finally reached the ridiculous level of “you don’t stand a chance” of earning a commission with some merchants.

Concrete Examples Advertisers Creating Internal Leaks

A merchant I dropped because they changed management, lowered commissions and moved to a different network is a case in point. Personal Creations‘ niche, like mine, is personalized gifts. They have links to 19 products on their homepage. But 21 links to their other companies. The whole top of the page – where their own header links should be – are full color logo banners for ProFlowers, ProPlants, RedEnvelope, Cherry Moon Farms, Sharies Berries.

Now the practice of retailers putting up banners or Adwords links on their sites is not new. Companies like Amazon and Overstock have been doing it for years. But here is the issue you, as a publishers, are not getting paid for revenue that the merchant creates based on your efforts.

In the case of Personal Creations, and the banners to the other companies on their website, they are all part of the same holding company Liberty Media Brands. Liberty Media Brands is leveraging traffic on each of its sites to create traffic for the others. Hover over any of the banners in the top-of-fold placement on Personal Creations and the site shows even bigger banners. You, as an affiliate, do NOT get paid if customers you sent click out to any other site to make a purchase. Half way down the page are more big logo banners for the same companies, and a few others. You don’t get paid if a visitor clicks them.

Near the bottom is yet more external links to more companies they own, like:

Other Liberty Media Brands and Services: Hand-Dipped Strawberries | Discovery Store | Camping Gear | Zoombak | Halloween Costumes | QVC | Worldwinner Cash Games | Skin Care

Clicking on any of these links to another of their “partner” sites leads to even more sites Liberty Media Brands owns!

While I’m at a loss as to what Worldwinner Cash Games has to do with personalized gifts, from the consumer’s point of view, I clicked the Zoombak link just to see what it is. You, the affiliate, have spent your time and maybe your money getting traffic for personalized gifts. You sent the visitor to Personal Creations. They sent them to Zoombak. The page doesn’t even open in a new window. You’ve LOST your original visitor and chance at a commission already.

Now when you go to Zoombak, that site wants to send visitors to Backcountry | BuyCostumes.com | ProFlowers | Cherry Moon Farms | Secret Spoon | Shari’s Berries | DIRECTV | Sirius XM

Sirius XM??? Really???

I’ve been in the personalized gift niche for 20 years. I know the niche intimately. People who come to my sites got there because they searched for “Personalized Graduation Gift” or “Engraved Crystal Wine Glass”.

For a merchant to send my affiliate traffic to Sirius XM instead is not only nonsensical from a consumer standpoint but is ultimately a big slap in the face to my efforts. No! Not a slap – a punch! There is blood oozing out my affiliate ears!

Why Performance Marketers Should Do More Due Diligence with Advertisers

Affiliates need to execute at least a minimum of due diligence before partnering with any merchant. At least visit the merchant site.

There are a lot of affiliates competing with you. If YOU got the visitor instead of all the other affiliate marketers in the world, congratulate yourself. You did a good job!

But getting a visitor is only HALF an affiliate’s job. Knowing which merchant to send that visitor to is just as important. It would be like working 50 weeks, saving your money each week for a vacation, filling up the gas tank – and not having any idea which direction to go!

A basic rule of thumb in our industry is affiliates have external links – merchants do not! Why? Because external links are leaks and where there are leaks affiliates tend to not get paid. Which, by the way, is against the nature of the very agreement merchants enter into with affiliates.

Even if the external links were just on their main page, this should not be acceptable to affiliates. But they’re on every page. Even the online order form page!

Why, if someone was on the page where they enter all their children’s names for the personalized Thanksgiving Gobbler Mug, would they want to have 21 big banners telling the visitor to go to another website?

While I am singling out Personal Creations for this example they are not the only merchant that uses this practice. It has become common place and the issue needs to be addressed.

We are almost at the point where merchants are simply using affiliates to siphon generate free traffic and leads. If you look at that example page again – with all it’s external links – it’s clear that they either forgot they have affiliates, or don’t care about their affiliates. There is no third choice.

About Billy Kay

You can find Billy Kay on Twitter @billykay.

11 Responses to How Merchants Are Divying Up Your Commissions Among Themselves and Their Partners

  1. […] How Merchants Are Divying Up Your Commissions Among Themselves and Their Partners (revenews.com) […]

  2. […] How Merchants Are Divying Up Your Commissions Among Themselves and Their Partners (revenews.com) […]

  3. Marilyn Holt says:

    We tried selling selected books via Powells and Amazon, and never received a "commission." I know a few books were purchased because people saw them on our website. This problems is a constant in online sales.

  4. Good article Billy and one that a lot of affiliates (especially newer ones) overlook. It's a good reminder to even check back with your existing merchants that you've been working with for a long time. A program I used to manage 4 years ago as their in house affiliate manager recently did this. If you go to their homepage now, you see leaks all over the place. It's really unfortunate when they discredite affiliate efforts and don't understand how hard it is to do what you do. Good examples and explanations here. I'll pass it on.

  5. BillyKay says:

    There's a lot of fights affiliates have apparently conceded to merchants and networks. There are many things affiliates are simply writing off as "the cost of doing business". I hope affiliates see this trend has the potential to to be as big as shoplifting, employee theft, shrinkage – and a hurricane wiping out your store – combined. IMO, affiliates should use the power of the "Drop this Merchant" button more. All my best, Billy Kay

  6. Liz Gazer says:

    Great piece, Billy. I know how frustrating it is when you've done all the work only to find the merchant is taking advantage and essentially, stealing commission from you. If the merchant really owns all those sites they're linking out to, why don't they create one umbrella affiliate program that covers all of them, so the affiliate earns credit regardless of which site the customer checks out on? If the customer initially got there via the affiliate, the affiliate should be paid, point blank.

    Ideally, however, they wouldn't have all those other store links to detract from closing the sale, in the first place. I understand including them in a discreet location, maybe in the footer, or on their own "partners" page. I don't understand having giant banners on your home page diverting your customers focus. It's not smart for them either. They're just delaying their own conversion and probably losing half their traffic along the way. You know what they say… when you try to catch 2 rabbits at once you most often get none. I'd be curious to know what their conversion rate is like.

  7. Gerri says:

    Thanks for the post. This could very easily put someone off affiliate marketing but I think it just goes to show that due diligence is needed when choosing a merchant. You summed it up very well – affiliates have external links – merchants do not!

  8. […] have a lot to worry about these days. Advertisers themselves are busy divying up affiliates’ commissions among themselves. The The New York Supreme Court, Appellate Division issued a ruling on the […]

  9. […] have a lot to worry about these days. Advertisers themselves are busy divying up affiliates’ commissions among themselves. The The New York Supreme Court, Appellate Division issued a ruling on the […]

  10. Anonymous says:

    It is an interesting post. But here as publishing revenue business for their efforts to create problems. Affiliate marketing is so useful.

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