Affiliate Marketing Blog

What’s this I hear you cry, something else for me to factor in when I pick a Merchant that is selling basically the same product as another Merchant, well sadly yes. It will also be something that you won’t really know is going on without really digging deep, as sadly the information is not always given by a Merchant or displayed by a Network, there will also be a few Merchants that have not update the new deal after making a change to stop paying commission on the vat or delivery at the command of the company financial director.

What should you expect as an Affiliate when % is worked out?

Well basically you should only expect to get paid commission on the product sold before vat and before delivery is charged to the customer.

But that’s not what you always get!

There is whole maze of deals to be had, some times the Merchant doesn’t even know they are doing it, other times there lack of technical ability and means you get additional commission.

Some merchants over charge for delivery as way to make money and you as an Affiliate should really be getting a commission from this also, however not every Merchant looks at it this way.

Keep in mind if a Merchants is making a loss, breaking even or only making a slight profit (pennies not pounds) from postage and packing after you factor in staff time, systems, packing and postage then you shouldn’t be expecting a commission as that’s only fair however strangely enough some Merchants pay you a commission on delivery when they don’t have to and are not reaping the benefits of this generosity as they don’t tell the Affiliates about this extra commission.

Another twist is when some Merchants actually charge the Affiliate for free delivery offers, by removing the delivery from the product price and then giving the commission on the product price minus what it costs them for delivery, is this fair, well not really if you don’t know that’s part of the deal, if you have been told up front then you can’t complain but the problem is most of the time your in the dark in an effort to make there offerings sound more attractive than the competitors.

Examples

So let’s take basic examples of couple of Merchants all offering 10% commission, they are all selling the same thing, but who do you go with? For these examples you need to exclude other factors such as is it a brand or ease in purchasing the product, that’s not the point of this article but is something in the real world of “who do I promote” you should be thinking about also. This article is trying to show you that 10% commission is not always 10% commission.

• Merchant A – 10% commission on the product sold excluding vat but including delivery.
• Merchant B – 10% commission on the product sold with vat and delivery.
• Merchant C – 10% commission on the product sold with vat but excluding delivery.
• Merchant D – 10% commission on the product sold before vat and delivery is added.
• Merchant E – 10% commission on the product sold excluding vat but has free delivery.
• Merchant F – 10% commission on the product sold excluding vat minus free delivery that actually costs the company £2.95 and that is taken from the cost of the product before the commission is worked out.

I actually had a few more examples to put here but as I feel I have got my point across I will stop here, so look at the 5 examples, can you correctly put them in order of who is offering the best commission deal? Answer is down the page a bit more if you want to try and figure it out.

Now if you are trying to work this out, my point is that it’s not always clear what the best deal is. I believe that most Affiliate don’t take the time to work out who is offering the best deal and are promoting the wrong Merchants or wrong deals as they either confused, or not given the full facts up front (very common) or are just lazy and stick with well this is working for me so why rock the boat, and that’s fair enough.

Have you passed the test?

So what was the correct order if everything equal and you had to pick purely on commission? B, C, A, E, D, F is the order you should be promoting the same product from different Merchants. Offers from Merchant C & A in the list are interchangeable based on if the delivery costs more than the amount removed to make the before VAT price, in the majority of cases C should beat A.

Merchant B basically said look whatever the customer pays us in total, we will pay you 10% in commission. While this is technically not correct, as you really should not be getting commission on VAT (VAT is Sales Tax for my USA friends reading this article) but delivery is at discretion of the retailer and decision to pay commission on this has to be based on will it cost you money to give the Affiliates commission on delivery, if the answer is yes then don’t but if you make money from the additional income from the delivery then you should be thinking about rewarding your Affiliates with commission on this also.

Ok I have gone and wrote a novel on what should be simple, but as you can see when a Merchant screams out that they offer 10% commission when a competitor is only paying 9% you need to ask yourself, is the deal on a like for like basis.

Last example: A product selling for £100 + £5 delivery.

Merchant A offering 10% on sale before vat and delivery is £8.51 (that’s 10% of £85.11 the price after vat is removed from the item selling for £100 to the consumer)

Merchant B offering 9% on the sale with vat and delivery is £9.45 (that’s 9% of £105.00 the total price if vat and delivery is not removed before commission is worked out).

Your actually £0.94 better off if you promote the Merchant B offering 9% commission than you are with the Merchant A offering 10% due to the way the deal is actually worked in practice.

I hope I have enlightened you to the fact not all deals are the same, Merchants and Networks often fail to get across that while there percentage looks lower on paper, in practice it’s actually worth more money a big plus for the Affiliate to promote that Merchant gone to waste. Due to the lack of information given up front you could be worse off promoting someone that sounds good on paper and you may never no this fact unless you buy something yourself and work out what you got the commission on.

Many years ago I wrote the first ever full explanation about what a “local cookie” is and how it can help Merchants on or considering using multiple networks. It’s been featured on many Affiliate forums and is the de-facto explanation in plan English as I can manage with a subject that is technical. Over the years I have seen many fancy attempts to reinvent this simple straight forward system and every one has been a massive and costly failure. So take it from me, read what I have to say, follow this advice and you will be setup to use “local cookies” in the simplest most straight forward and fair way available. Never trust the Network that says it can’t be done or doesn’t work, they are lying to you and have a vested interest in you not using another Network as they couldn’t stand seeing you make loads of sales via the competition as they found gaps in your Affiliate strategy that they couldn’t see. My advice to Merchants is always give Affiliates choice, be on at least 2 Networks, maybe 3 but 4 or more is just wasting your time. No matter how many you go with, just make sure you do “local cookies” right, as sadly very few Networks give the correct advice, instead they often say the only solution is to just use one network, them!

Increasingly as Merchants are signing up to more than one Affiliate Network to compare the services on offer. Local cookies have been the preferred method of eliminating multi-network tracking issues. They allow a Merchant to accurately know which network sent a sale/lead to them. When set-up correctly, the local cookie is a reliable way to ensure correct attributing of commission and avoidance of payment duplication.

I address some of the common misconceptions and explain some of the benefits of local cookies to you as a Merchant.

Multi-network tracking issues include:

• How do I know what network sent me a sale/lead if it’s showing in both accounts at each network?
• I have been paying out £1 a click on PPC and I noticed that some of my PPC sales are being credited to Affiliates, how do I know what one resulted in the final sale?
• I had been told that Deep links wouldn’t work if I use local cookies?

Industry Standard

To address these issues the generally agreed ‘best method’, and one that’s been used for years by big Merchants who are paying to be on multi-platforms, not just affiliate networks but PPC, CPM, Portals and countless other places is to set a local cookie.

The local cookie, which is just a normal cookie, stores the name or reference to the network/advert which last referred the customer to the site. Your order/checkout systems can then read this local cookie and show the tracking code for that network or promotional campaign. A local cookie (when set-up correctly) will be as reliable as the network cookie and will mean you will be able to spend money on other campaigns such as PPC, CPM and so on while only ever paying commission to the source responsible for last referring the customer when they make the actual sale/lead.

A Little Respect

To succeed in Affiliate Marketing it is very important that you must always treat all sources of sales with the same respect and on a level playing field. For example just because you have paid for a search engine ad campaign doesn’t mean you should ignore setting a local cookie to track when an Affiliate sends you a customer. The same is true if you paid for PPC but a visitor sent via this doesn’t initially purchase but returns later via an Affiliate link. In this case the last refer (the Affiliate) should be the one set in your local cookie. You will have to write the script that sets and reads the cookie yourself, however we can assist you and perform full testing to ensure you have it set-up and are calling it correctly (and fairly). This will ensure Affiliates are paid correctly regardless of the network they are promoting you through. It will in turn build a relationship of trust and mutually benefit everyone as the Affiliate will be more inclined to promote you and to recommend you to other Affiliates. This set-up is really rather simple to do, your only obstacle might be if a network refuses to work with you to accomplish it, then you might want to reconsider you business relationship with them.

Deep Linking

The great thing is that deep links can continue to work even if you are directing all traffic to a script to set the local cookie before taking the visitor to the page on your site. As long as the Affiliate Network can include the deep link onto the query string of the URL then your script can set the cookie and then redirect to the deep link given on the query string. Or with Paid On Results, the Merchant can redirect the visitor back to us after setting the local cookie. We will then redirect the visitor again but this time to the deep link and not through any script which originally set the local cookie for the Merchant. NB (the URL used is a static URL meaning you the Merchant doesn’t have to pass along any extra values to it for the feature to work).

Here is a simple example of the style of URL that could be used when deep linking to a local cookies script.

^{merchant.com/affiliate-script.[asp|pl|cgi]?network=XX&deeplink=/product-123.html}

You would simply set the local cookie to contain the network=XX value, and then redirect to merchant.com/product-123.html

A Solution For All

Using multiple networks needn’t be the preserve of big Merchants, it can be a choice for all. Not having a local cookie in place and then reversing sales will make you look amateur in the eyes of the Affiliates. Additionally it is unfair for them to have to suffer reversals because you didn’t implement this straightforward solution. I would recommend that you speak to your current network providers to see if they can advise you on what might need changed, if they say it can’t be done (probably because they don’t want you working with another Network) or refuse to help, give me a shout and I will explain it to you.

The alternative is to simply approve sales on all your networks even if they are duplicates, of course this is far from ideal for you as a Merchant and makes things easier for an Affiliate involved attempting fraud.

Check List

Some things you should check, before going live with your local cookie system. This is not an exhaustive list, just the main things, networks like Paid On Results carry out additional check above these, however these are the basics.

• Your local cookie lasts exactly the same length as your Network cookie + 1 day.
• You set and replace the last refereeing source of traffic as it hits your script, example Network 1 is replace by Network 2 when they send the same visitor via one of there Affiliates and vice versa.
• You are applying the same rules to all forms of traffic your are monitoring this way such as your own PPC, if the Network sends someone who has already visited your site via your own PPC, the local cookie would be overwritten in favour of the Network and the same applies when someone who came to your site via the Network comes via your own PPC later.
• You can not include direct domain type in traffic, SEO direct to your site, your own email newsletters; paid listing in other newsletter can use the local cookie system for tracking if you wish.
• If you have no referrer in you local cookie, you must show all tracking codes for all Networks, this will catch any situation where the local cookie has failed such as when a user removes the local cookie from there system but still has the Network cookie planted on there machine, this doesn’t happen often but is also a back up for local cookie failure.
• Regularly test your setup when you add or remove a referrer from it or when update your site design or checkout pages, you will be amazed at the number of Merchants that forgot to add the Networks tracking code in when they design a new site

I hope you find this article useful, feel free to link to it and use extracts from it, but please credit affiliatemarketingblog.co.uk as the source in any articles.