Is this legal & ethical? affiliate prog closing...

29 replies
I just got an email from a supposedly reputable web hosting company whom I have been receiving affiliate commissions (although not much) every single month for years, saying that their affiliate program is closing down and that we will only receive our last commissions next month:


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Note from xxxxxxxxx Inc.:

Dear Affiliate,



We regretfully inform you that due to the changing business climate, we are closing the xxxxxxxx Affiliate Program. The next payment you will receive will be for any commissions you earned in March 2010. That will be paid on April 30th, 2010. Thank you for all your effort no matter if you just joined or have been with us for the last 8 years.



Best Wishes for you continued success

xxxxxx and the xxxxx team

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I was like "what the heck??"...

Just like that!!?

I can understand if they company ceases the whole business but to just cease the affiliate program and stop paying ongoing commissions to affiliates is total bulls%21!!

I wonder how affiliates who have been receiving thousands of dollars of commissions every month could accept such news...

What do you guys think?

Ameer
#affiliate #closing #ethical #legal #prog
  • Profile picture of the author SuzanneH
    Why is it bullsh!t? It's their business, they can run an affiliate program or not; their decision. As long as they pay what's owed, there's no problem. I was an affiliate of a company that was bringing in over $600.00/month on just one single page (I have a content site). Having affiliates just wasn't working out for them and they shut their affiliate program down. Sure, I was disappointed. But that's biz. You just move on to the next thing.

    Suzanne
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  • Profile picture of the author badboy_Nick
    Its completely legit dude.

    Heres what YOU should do ASAP: Change your affiliate links to a similar offer so you can keep making money.

    Problem solved.

    Any questions let me know

    Nick
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    • Profile picture of the author Focused Action
      I have a friend who several years ago was one of the largest source of ppc traffic to ebay - he was "netting" 7 figures/yr - then ebay closed down accepting this form of traffic - poof....
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      • Profile picture of the author Azfi
        Nothing we can do. They own the affiliate program. They can open and close anytime they want. The solution is simple. Find and join other affiliates program.
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  • Profile picture of the author M Thompson
    Originally Posted by AmeerSalim View Post

    I just got an email from a supposedly reputable web hosting company whom I have been receiving affiliate commissions (although not much) every single month for years, saying that their affiliate program is closing down and that we will only receive our last commissions next month:


    ================================================== =====
    Note from xxxxxxxxx Inc.:

    Dear Affiliate,



    We regretfully inform you that due to the changing business climate, we are closing the xxxxxxxx Affiliate Program. The next payment you will receive will be for any commissions you earned in March 2010. That will be paid on April 30th, 2010. Thank you for all your effort no matter if you just joined or have been with us for the last 8 years.



    Best Wishes for you continued success

    xxxxxx and the xxxxx team

    ================================================== =====


    I was like "what the heck??"...

    Just like that!!?

    I can understand if they company ceases the whole business but to just cease the affiliate program and stop paying ongoing commissions to affiliates is total bulls%21!!

    I wonder how affiliates who have been receiving thousands of dollars of commissions every month could accept such news...

    What do you guys think?

    Ameer


    Nothing either remotely illegal or unethical about it.

    They have given you notice that it's going to happen. Business is business the company has to do what best for it's employees/shareholders owners etc.

    Last year i had a company i was affiliate for change affiliate system 3 times in 3 months and no one got paid.. now that was unethical
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    • Profile picture of the author kishorem
      Originally Posted by M Thompson View Post

      Nothing either remotely illegal or unethical about it.

      They have given you notice that it's going to happen. Business is business the company has to do what best for it's employees/shareholders owners etc.

      Last year i had a company i was affiliate for change affiliate system 3 times in 3 months and no one got paid.. now that was unethical
      When they never pay, then it is really unethical. Looking for a new Affiliate Program is one of your alternative. Anyway, there are many Monetizing Method... i. Selling your own product ii. Affiliate Program iii. CPA iv. Adsense etc
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  • Profile picture of the author Jon Tees
    There's usually a clause in the affiliate agreement that states the company reserves the right to change or discontinue the affiliate program at any given time. As an affiliate you are pretty much at their mercy and subject to their whims it comes with the territory in this business. To me it doesn't seem like an ethical move. They appear to have folded up their tent and left town in the middle of the night. But what's ethical or isn't ethical is often up to interpretation they'll probably get away with it.
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  • Profile picture of the author Barry Unruh
    Big Mike is hitting it exactly right. It really depends on how their affiliate agreement reads about ongoing commissions. I'd bet there was an escape clause in it allowing either party to terminate the agreement.

    I'd be upset to see a monthly recurring affiliate payment to suddenly disappear. I think many other responders were missing your point. It was not just commissions on new sales, but continued commissions for every month a customer continued using their service.

    I'll be surprised if you discover they did not have an escape clause in their affiliate agreement, making what they are doing 100% legal, more questionable on the ethical side of things.
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  • Profile picture of the author JohnGoodwin
    To me, this is exactly why affiliate marketing is a bad business model. You are dependent on someone else for your income. If they get up on the wrong side of the bed and change commissions or cease operations you are SOL. You are much better off selling your own products and keeping 100% of the profits.
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    • Profile picture of the author Robert Puddy
      Originally Posted by JohnGoodwin View Post

      To me, this is exactly why affiliate marketing is a bad business model. You are dependent on someone else for your income. If they get up on the wrong side of the bed and change commissions or cease operations you are SOL. You are much better off selling your own products and keeping 100% of the profits.
      Affiliate marketing should be just the icing on the cake... But it also has its advantages.

      While stuff like this can happen, for the length of the ongoing affiliate partnership the affiliate didnt have to deal with supprt, create products or deal with refunds blah blah

      If the worst happens you spend a day changing your links and email promo's then your done

      While i agree you can make 10 or 100 times as much selling your own products, we also get 10 or 100 times the work and grief (well my support team do anyway)
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  • Profile picture of the author seasoned
    There often IS a clause allowing it. What is unethical and illegal is the GOVERNMENT changing things as they have. It is like "YIKES, your making money! We can't have THAT! HERE'S a NEW tax!". This becomes ESPECIALLY clear after so many legislators today have said that taxes are to "LIMIT UNWANTED BEHAVIOUR".

    Anyway, affiliate programs just got more complicated and expensive. So they may just be unhappy about how others affected THEIR bottom line.

    BTW you want to hear a REALLY bad thing? I did business with one company, and paid $99/year for the "privilege". They EVEN took a portion of all my profit! Well, about a year ago, they had a problem getting the $99, sent messages from ANOTHER address so I couldn't see them, and basically stole ALL my customers AND, of course, put THEIR page on MY site! I had to leave it up to allow my now FORMER customers to use THEIR site. They even sent them all an EMAIL that was confusing. Since I was one of my customers, I got THAT email, which is how I first heard about it. I later heard again from a friend that was ALSO a customer. If I want to pay the $99, GREAT, but I would have to start over from scratch! The customers are GONE!

    OH WELL, serves me right, from now on, I will only use APIs to do that.

    And look at ROIBOT! IT not only stopped paying commissions, but redirected EVERY link goiing to it to its purchaser! *****MANY***** big affiliates used it to route ALL their affiliate links since it simplified updates and provided tracking, statistics.

    Steve
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    • Profile picture of the author mmurtha
      Originally Posted by seasoned View Post

      There often IS a clause allowing it. What is unethical and illegal is the GOVERNMENT changing things as they have. It is like "YIKES, your making money! We can't have THAT! HERE'S a NEW tax!". This becomes ESPECIALLY clear after so many legislators today have said that taxes are to "LIMIT UNWANTED BEHAVIOUR".

      Anyway, affiliate programs just got more complicated and expensive. So they may just be unhappy about how others affected THEIR bottom line.

      BTW you want to hear a REALLY bad thing? I did business with one company, and paid $99/year for the "privilege". They EVEN took a portion of all my profit! Well, about a year ago, they had a problem getting the $99, sent messages from ANOTHER address so I couldn't see them, and basically stole ALL my customers AND, of course, put THEIR page on MY site! I had to leave it up to allow my now FORMER customers to use THEIR site. They even sent them all an EMAIL that was confusing. Since I was one of my customers, I got THAT email, which is how I first heard about it. I later heard again from a friend that was ALSO a customer. If I want to pay the $99, GREAT, but I would have to start over from scratch! The customers are GONE!

      OH WELL, serves me right, from now on, I will only use APIs to do that.

      And look at ROIBOT! IT not only stopped paying commissions, but redirected EVERY link goiing to it to its purchaser! *****MANY***** big affiliates used it to route ALL their affiliate links since it simplified updates and provided tracking, statistics.

      Steve
      Dang Steve,

      Now that really bits!

      As for the OP,

      It is as legal as any other leagal business practice. The thing here is it is their business - not yours or anyone elses.

      It may be that their profit margin doesn't allow for it anymore - or at least not at the moment. And considering many businesses here in the US have either went bankrupt, cut staff, or whatever, that isn't a surprising move on their part..
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  • Profile picture of the author DogScout
    As long as you are not only selling as an affiliate to one product, there is nothing wrong with affiliate marketing. Sell one product and you could go to zero income overnight... sell 10 and you lose only 10% and a month or two can recoup that.

    Though as always, having your own product is the most lucrative model, but not everyone can do that and those that cannot, do not always understand that they can outsource the product production.
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  • Profile picture of the author Kay Zee
    It is their product, they can do whatever they want. LOL. I agree with the previous posters though. It is dangerous to have all your eggs in one basket.
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  • Profile picture of the author Glenellis
    I agree with Big Mike. If you brought a new client to the company and earned money every month when that client re-upped his hosting account (or whatever it was he did that got you paid) I'd be upset as well. I understand the fatalistic attitude of most of the posters, but if this were 100% legal and acceptable, what would stop any and every company from enticing you to send them customers, and then keeping the customers but telling you to shove off. I think there might be some legal issues (certainly some moral ones) you need to hash out with a competent attorney.
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    • Profile picture of the author seasoned
      Originally Posted by Glenellis View Post

      I agree with Big Mike. If you brought a new client to the company and earned money every month when that client re-upped his hosting account (or whatever it was he did that got you paid) I'd be upset as well. I understand the fatalistic attitude of most of the posters, but if this were 100% legal and acceptable, what would stop any and every company from enticing you to send them customers, and then keeping the customers but telling you to shove off. I think there might be some legal issues (certainly some moral ones) you need to hash out with a competent attorney.
      What company in their right mind would go to ALL that trouble for ONE customer!?!?!? Companies don't do it all the time because:

      1. If they did, then it WOULD be a scam and illegal.
      2. It would be unethical.
      3. They would get a bad reputation.
      4. They would NEVER get more than a few customers from each rep and some of those, being friends with the rep, would LEAVE!

      Steve
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  • Profile picture of the author drew_hause
    oh this sounds awful
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    • Profile picture of the author LilBlackDress
      That is very disappointing and in many ways like content sites such as Squidoo that delete lenses that are earning when they change the rules.

      So the overall best thing is to keep in mind that rules change all the time.
      Simple as that. And not depend on any source of income that you are not in control of.

      Sorry though, I know it is tough.
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  • Profile picture of the author jennypitts
    I am sorry to say that it is completely legal. I am sure, that somewhere in the fine print of the Affiliate agreement it states that either side can terminate relations without the consent of the other (or others in the case of affiliate program members). Just as others have said here, business is business, and just as with any other company, online or offline, when sales go bad adjustments have to be made. If this weren't true then how come we have such a high unemployment rate? Because unfortunately the economy is in a dire situation and most businesses have had to cut expenses all around, from commissions to even cutting staff.

    Let this be a lesson to always have a back up plan. As someone said here "don't put all your eggs in one basket", by doing so you are limiting your growth and success potential. If you want to get an attorney's opinion you can go ahead and do so, but I am almost certain that there probably isn't much you can do.
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  • Profile picture of the author kindsvater
    If you're getting paid a one-time fee for getting a customer, that is one issue. A company can cancel their affiliate program, make sure you're paid all commissions earned, and that's that.

    On the other hand, if a web hosting company is promising recurring commissions where you get a cut for the lifetime of the customer, that is an entirely different story.

    The company can cancel their affiliate program to cut-off newly owed commissions going forward. But for existing customers where you get a lifetime commission, they're probably on the hook to keep paying unless there was some real tight language in their affiliate contract when you signed up.

    .
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  • Profile picture of the author seasoned
    BTW did everyone here get THAT upset when Amazon DRASTICALLY cut THEIR commission? Remember THAT!?!?!? I NEVER saw anyone mention about roibot. I'm sure some major companies saw their profit drop to like ZERO OVERNIGHT!

    And what brian said is certainly right, but if they do it for YOU, they will have to do it for all. That could then become what is known as a "class action". If there are REAL reasons to avoid it, they could go bankrupt. If THAT happens, and you made a lot, don't be surprised if they ask for THAT back!

    Did you REALLY make that much?(having perhaps 10s of thousands of dollars on the line) Do THEY make that much?(say 10s of millions) If the answer to #1 is no, you probably don't want to persue it. If they answer to #2 is no, a lawyer probably won't.

    And good luck trying to PROVE that they still have the customers. Apparently, there is often a lot of turnaround.

    Steve
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    • Profile picture of the author JohnMcCabe
      For the legal aspect, I'll gladly defer to Brian Kindsvater on this one. Ethical, if the promise was "lifetime commissions"? Whiffs a bit, to me.

      If you have your hosting with this company as well, I'd think about looking for another host if it was me.

      A hosting company running an affiliate program for eight years is suddenly in such a bind it has to kill its affiliate program? I'd guess that even if they continued paying commissions for existing customers, they might not be paying for long...
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      • Profile picture of the author seasoned
        Originally Posted by JohnMcCabe View Post

        A hosting company running an affiliate program for eight years is suddenly in such a bind it has to kill its affiliate program? I'd guess that even if they continued paying commissions for existing customers, they might not be paying for long...
        Over the past 18 years, the hosting business has changed a LOT! You used to be paid a LOT for hosting HTML over a limited bandwidth with overages kicking in quickly.

        TODAY, you are generally paid LITTLE for hosting practically everything over high bandwidth and overages kick in late.

        ALSO, LAWS have changed!

        So you can't really say they have been "running an affiliate program for eight years", because they probably HAVEN'T! What is there today may be very different from 8 years ago.

        Just devil's advocate!

        Steve
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        • Profile picture of the author JohnMcCabe
          Originally Posted by seasoned View Post

          Over the past 18 years, the hosting business has changed a LOT! You used to be paid a LOT for hosting HTML over a limited bandwidth with overages kicking in quickly.

          TODAY, you are generally paid LITTLE for hosting practically everything over high bandwidth and overages kick in late.

          ALSO, LAWS have changed!

          So you can't really say they have been "running an affiliate program for eight years", because they probably HAVEN'T! What is there today may be very different from 8 years ago.

          Just devil's advocate!

          Steve
          Can't argue with what you said, all of which could contribute to a hosting company biting the dust.

          I didn't say the company in question ran their affiliate program for eight years, they did in their email to the OP. Over that span, I imagine there have been quite a few changes to the program. That's to be expected.

          But I have to think that killing their affiliate program, absent other information, is a sign of a company having hard times. Which tells me it's time to make sure there is a Plan B ready to go...

          BTW, the devil has a pretty good advocate...
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          • Profile picture of the author seasoned
            Originally Posted by JohnMcCabe View Post

            BTW, the devil has a pretty good advocate...
            I'll take that as a compliment. 8-) Yeah, DEFINITELY go to plan B! I am simply saying that:

            1. they may have valid reasons for doing this
            2. they are likely on legal ground
            3. suing them can backfire
            4. they may not be worth suing

            It just kind of upsets me when people feel that they should be treated as majority partners, etc... when they take NONE of the rest, and are so quick to scream scam. Of course, all those points are valid.

            Steve
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  • Profile picture of the author Mohammad Afaq
    If I were the web host I would think 50 times before closing it but it's their business and it's totally their choice.

    Affiliates just get a commission and they are different from partners.

    That's the reason you should start thinking about starting your own company and selling your own products because no matter how much recurring income you are making as an affiliate, it can go down.

    Also, you should promote a reputable hosting company who you know won't turn their back on ya!
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  • Profile picture of the author Underground SEO
    I've heard of this happening a couple of times. It is annoying if you've spent months or maybe years building up your sites and backlinks for that product but there is absolutely nothing you can do about it. It's their decision at the end of the day
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    • Profile picture of the author seasoned
      Originally Posted by fryerben View Post

      I've heard of this happening a couple of times. It is annoying if you've spent months or maybe years building up your sites and backlinks for that product but there is absolutely nothing you can do about it. It's their decision at the end of the day
      If it is a webhost, and you spent years building up SPECIFIC sites, then you should look ELSEWHERE. As for backlinks? This is one reason many link THROUGH THEIR site.

      Seriously, for a host, content should be GENERAL HELP, SPECIFIC APP HELP, HOST HELP, probably in that order. You should find ALL hosts fit the general help, most fit the specific app help, and SOME might even fit most of the host help, so switching to another host should be relatively simple.

      Steve
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  • Profile picture of the author sbucciarel
    Banned
    Geeesh ... the things people say are unethical. The company belongs to them. The company wishes to cease their affiliate program. It's in the company's best interest to cease their affiliate program or they wouldn't be doing it.

    They don't have to ask your permission to run any aspect of their business. They notified you so move on.
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