Is it fair for merchants to promote select affiliates?

One of my employees was on Paragon Gifts website the other day and noticed a banner for FreeShipping.com on the left sidebar. This isn’t some small banner either, it shouts out in a 206×150 banner that your order qualifies for free shipping!

FreeShipping.com is an affiliate of Paragon Gifts and gets the commission on any orders they refer.

For a customer coming to the Paragon Gifts site, who wouldn’t be enticed by an offer of free shipping on their order? If a regular affiliate sends traffic to Paragon Gifts, how many are clicking through to the FreeShipping.com site? How many affiliates are losing their commission? I bet quite a few.

About Connie Berg

Connie Berg is the Founder of FlamingoWorld.com and iShopDaily.com. Founded in 1998, FlamingoWorld.com offers discounts and coupons from online retailers, while iShopDaily.com focuses on price comparison and product search. ForMeToCoupon.com is a new venture which offers an automated, customized affiliate coupon feed which consolidates coupons and deals across all major affiliate networks in a standard format. You can find Connie on Twitter @connieberg.

29 Responses to Is it fair for merchants to promote select affiliates?

  1. Have you talked to Paragon about this yet? If so, what was their response? If I were in your position I would dump them if they weren't willing to remove the offending link.

  2. Connie Berg says:

    I did email them and got no response. I was hoping they would respond, I am curious about their reasoning for this.
    I have dumped them and removed them from my site.

  3. Peter Koning says:

    The free shipping .com people have a cool business model- great for them as an affiliate to many merchants. However any merchant showing their banner is risking upsetting all their other affiliates if it's true they snatch the commission away.

    Why wouldn't the merchant simply have their own "free shipping" promotion and offer it to all their affiliates – even make a banner for them – but give a smaller commission or split the costs etc.?

  4. Connie Berg says:

    To me it is no different than if a merchant would display ads for it's loyalty affiliates, such as "Your order qualifies for 5% cash back" at whatever loyalty site.

    It is unfair to other affiliates.

    They would be smarter to offer their own free shipping promotion and not have to pay the commission to FreeShipping.com.

  5. Mike Hyland says:

    Amazing this one flys as many of the thousands of merchants (Major Brands) don't allow incentive marketing affiliates. I see they are part of a group of loyality/reward sites and doesn't surprise me they charge a membership fee often hidden in the terms like those MetaRewards wanks.

    "General Membership Questions:
    I have a charge on my account for Insiders-Club.com. What is this?

    The Insiders-Club is a service that provides members with savings such as cash-back rebates on your shipping charges, price protection on your purchases and more. The charge on your account is most likely the membership fee for service. We operate several membership programs such as FreeShipping.com, the Internet Insiders-Club and the MyPoints Insiders-Club. Please click the "return" link above to look up your account.

    I don't remember joining, how did you get my information?

    All of the member information is collected at the time of enrollment, and is provided by the user. Sometimes we find that another household member may have joined the program! You may have seen an offer for our program elsewhere on the Internet, or perhaps through one of our Merchant Partners."

    Bet the merchant partner includes a AM getting a kick-back spiff for recruiting memeberships without full disclosure to their real merchant's management. Next up comes a forced click BHO cookie cannon.

  6. Peter Koning says:

    This has been thrown into the affiliate hive and they're buzzing already over at abestweb.

    http://forum.abestweb.com/showthread.php?t=78391

    Good find Connie.

    -Peter

  7. Jonathan (Trust) says:

    Connie, I imagine you don't like that group.

    http://www.internetretailer.com/internet/marketin

    Bring back memories?

  8. Connie Berg says:

    Jonathan, thanks for the link, that is from 2003, didn't know about that.
    FreeShipping.com's partnerships don't matter to me unless it directly affects me and my partnerships. Having a link on one of my merchant pages directly affects me.

  9. Scott Jangro says:

    I don't like to see "fairness" used as an argument in business. Life isn't fair.

    I prefer to call this just plain stupid. Walk away, and if you're feeling generous, tell them why.

  10. I think you're all missing the point and this string is (I'm sorry!) doing more harm than good for affiliates. It is, in fact, typical. The fact that it's viewed by me (and not only me but other advertisers) as typical should concern you.

    Connie, you're throwing your hands up in the air and walking away long before understanding WHY. Now Scott is here egging you on and I see more harm than good in it. Frankly I find the behavior to be immature. I'm not trying to be confrontational, please understand.

    Paragon has a reason and if they're smart they respect the opinions of their top affiliates. If they're smart they'll talk to their affiliates and explain the business reasoning which, perhaps, is faulty — built on false or even ridiculous assumptions. Aside from affiliates if Paragon is smart they'll have an open mind when considering their partnership with Freeshopping.com — even after they've made the decision.

    My point here is that you guys are making matters worse by reacting before knowing. Even if you do know why it's typical (and Abestweb is where it can be found) for affiliates to act in a manner that suggests they disrespect merchants for making the decisions they've made — for whatever (good or bad) reasons.

    It breeds more bad behavior by the merchants toward affiliates. I respectfully urge you to consider this.

    David Lewis where are you?

  11. Connie Berg says:

    Jeff, it doesn't matter to me what their reasoning is. They want affiliates to drive traffic to them and then once there, they send them to a different affiliate that they are promoting prominently on their site.

    I don't have to try to reason with them or spend time trying to understand, there are thousands of merchants to work with and hitting the delete button is easy.
    I did however feel the need to let other affiliates know what they were doing so they could make their own choice if they wanted to continue to be their affiliate. I don't find informing people of issues childish or disrespectful. I did try to contact them, they chose not to respond.

    It is their option to promote FreeShipping.com on their homepage, but I think that they should have let affiliates know when they started doing this. With over 1000 merchants on my site, I don't have time to check every one every day. Had they sent an email to affiliates letting us know, we could chalk it up to a business decision and make a choice if we wanted to continue to work with them. Instead it feels like they tried to pull one over on us. They made a choice of one affiliate over all the rest. Affiliate marketing is supposed to be a partnership; they weren't acting like partners of anyone but FreeShipping.com.

  12. Thank you for making people aware of this.

  13. Hey, I'm a merchant and I was thinking about promoting freeshipping.com on my website, so you've got me pondering. I think they pay $10 per sign-up.

    My question: Are you sure that someone buying the freeshippng.com membership will lose you your commission? After all, freeshipping's 30 day free trial page doesn't promote any merchants, just the membership benefits. Wouldn't your customer most likely use their browser's "back" button to complete their purchase at Paragon Gifts?

    Sure, there's competition among affilites, but compared with some of the sneaky stuff out there, this seems pretty tame. Am I mising something here?

  14. Connie Berg says:

    I believe in order to get the Free Shipping rebate, the user/member has to shop through FreeShipping.com's link.

    The merchant already has the shopper on the site, why would the then send them away to a link that they will have to pay commission on? Why not just offer their own free shipping offer and keep the shopper there.

    And for those merchants, who is to say the shopper won't click through, sign up and then forget about your site and shopping there because they are on the FreeShipping.com site looking around and get distracted.

    I cannot think of any logical reason a merchant would want to send traffic away.

  15. Perhaps merchants should promote freeshipping.com on their order confirmation page.

  16. Jonathan (Trust) says:

    ? Merchants with an affiliate program shouldn't promote any other affiliate on their site. In this case, it's just a big leak.

  17. Connie Berg says:

    Here is another one Joe Brands – at the bottom it says "Visit our Featured Partner's Websites Below."

    Merchants as affiliates. Do merchants have such lack of confidence in their own products that they have to send the visitors elsewhere?

    At least set it up so these don't show through for people clicking through from affiliate sites.

  18. Brian says:

    We just signed up to work with freeshipping as an affiliate for our phone card affiliate program.

    But we only work with them for our exit traffic on our site as a way to pool together resources with other merchants.

    this seems to be there main business model that doesn't conflict with other affilaites.

    free ship away!

  19. Hey Jeff,

    My point here is that you guys are making matters worse by reacting before knowing. Even if you do know why it's typical (and Abestweb is where it can be found) for affiliates to act in a manner that suggests they disrespect merchants for making the decisions they've made — for whatever (good or bad) reasons.

    Sure, there are a lot of merchants that are (business) smarter than most affiliates, at least more professional. But quite a few affiliates are (business) smarter than most Advertisers as well. It works both ways. Who is outsmarting who in this case needs to be seen. As you already said, we don't know (yet) and only (more or less professional and educated) Speculations are possible at this point.

    It breeds more bad behavior by the merchants toward affiliates. I respectfully urge you to consider this.

    The "noise" comes with affiliate marketing, Normal people that are not the "Trumps" of eBusiness and eMarketing. Normal people are usually a bit more emotional, at least when it comes to the first reaction to good and bad news for them.

    It is part of running a good affiliate program to filter out the noise and get to the core of the problems and, well, address them. Not responding at all is one way of addressing the problem, after giving the merchant a few days leadtime to respond, when the "heatwave" cooled down a little and after consulting internally how to say what you have/want to say to affiliates in public.

    I know that this is a common way of saying to a certain type of partners (or customers):" f**k you, take it or leave it, because we don't care about your business very much.".

    I personally do not prefer this method of sending a message, but that's just my humble opinion.

    David Lewis where are you?

    Finalizing his eComXpo presentation for tomorrow?! 🙂 Just guessing hehe.

  20. Jonathan (Trust) says:

    This really isn't a difficult issue to understand from the affiliate's perspective.

    Affiliates don't like leaks.

    Affiliates aren't here to send traffic to merchants so they can take that traffic and try to monetize for themselves without any compensation to affiliates.

  21. Peter Koning says:

    "But we only work with them for our exit traffic on our site as a way to pool together resources with other merchants."

    So do your affiliates understand that traffic *they* sent you has a chance to get credited to another affiliate on exit?

  22. Kellie says:

    Connie I personally don't see anything disrespectful about your post. Looking at that link on Paragon Gifts, it appears that Paragon Gifts has become an affiliate of FreeShipping. And I have to agree that for you as an affiliate (and to other affiliates), the WHY behind Paragon's decision isn't relevant. Affiliate's knowing and understanding that this type of thing is increasing within the Industry is important…for their own business decisions.

    More and more people are wearing more than one hat. They are merchants and affiliates. They are Networks and affiliates. Sometimes they are all three. There is a lot of money floating around in affiliate marketing. There are an increasing number of people who attempting to monetize as many of the different perspectives as possible. Buy.com has an incent affiliate shopping site. DentalPlans has a full blown affiliate shopping portal. SharperImage promotes UPromise all over their site (although not as an affiliate I don't think). This list goes on and on. It's not just about a merchant leak. When a Merchant goes down that road, they are now not just a partner with their affiliates but a competitor as well. Affiliates would be remiss to not talk about it. By nature of the need to track commissions, Merchants and Networks gain a certain degree of insight into their partners businesses. Lots of data is tracked, recorded and aggregated. A whole other can of worms is opened up when those having access to such information become a competitor. There is no way around the potential conflict of interest for the affiliate.

    Why should an affiliate who is being paid for performance only hand off their traffic not only to someone who is now also their competitor but in this particular case to a competitor who then potentially hands it off to yet another competitor?

    The disrespect I see when these situations come to light is a disrespect to the affiliate/merchant partnerships within the offending Merchant's own affiliate program.

  23. Scott Hazard says:

    Connie,
    I am with you (and others) 100% on this. Quite frankly, it does not matter WHY they have this huge leak on their web site. All that matters is that it is there.
    As usual, Mr. Molander is applying his own unique sense of right and wrong to this situation, but don't let that bother you. He also said that LMI was great. All I can hope is that Mr. Molander is the jury foreman if I am ever on trial for a serious crime.
    There is no difference in the FreeShipping.com banner and Adsense or even affiliate links on the merchant's web site, but it is their right to have them there, so all you can do is walk away.

  24. Connie Berg says:

    It just keeps getting worse. Today I got an email from Dirt Devil's Affiliate Manager.

    "From September 15th – September 30th, all Affiliates will receive a 10% commission rate of the sales price"

    So in checking the link, you can see on the right side all the links to other stores to buy the product from.

    Sure, I really want to promote this special promotion! Lets send all our visitors there so they can buy from other stores so Dirt Devil makes money and the affiliates did all the work of bringing in the visitor.

  25. Eric Ewe says:

    I can't understand why dirt devil is sending traffic to circuit city, TriState Camera. From their stand point, a sale is still a sale and since you have the visitor on the product page, why send them elsewhere? I do not think that they are getting a CPC on that as it is powered by where2getit.com

    They are also siffening affiliate traffic and commission which is messed up!

  26. SandraR says:

    Check out these creeps>
    Inkgrabber.com

    Resource Page:
    http://www.inkgrabber.com/resources.htm
    The resource page is an affiliate page, if they decide to hide the page I do have a capture.

    Time to bring this blog post back to life!

  27. Jonathan (Trust) says:

    I don't like leaks but if the only way to get to that page is from the very tiny Resources link on the very bottom, probably not losing any traffic/money to that page. Leaks like these are the bad ones:

    http://www.youractivepet.com

    Right under Recommended Links, straight 1800Petmeds affiliate link, Your Active Pet a merchant at Linkshare. Above the fold, not hard to miss.

  28. SandraR says:

    Thanks for the heads up Jonathan, another one bites the dust with me.

    Creeps!

  29. EileenC says:

    I ordered a "free sample" of Slimscript shakes last year (April 2006) which automatically signed me up for a monthly membership with Slimscript, that I promptly cancelled. I was refunded some of the money they charged me for the 1st month supply, but they wouldn't give me a full refund because somewhere in the fine print it says that I only had 14 days to cancel. Well, I just realized that I was also charged $71.88 last year and again this year by the insiders-club.com for a yearly membership. I didn't realize that I had joined this club when I sent for the free sample. When I inquired about the charge on my bank statement, the bank informed me to call the 800 number for freeshipping.com to investigate the charge. When I did, the customer service dept at freeshipping.com just told me that there was a popup when I first signed up for the "free sample" from Slimscript that automatically signed me up for this insiders-club. The insiders-club agreed to refund me $63.61; not the full $71.88 that I was just charged for the second time. So, my "free sample" from Slimscript has cost me over $90. Don't deal with any vendor who uses freeshipping.com!!!!!!!!!!!