How to minimize sales from affiliates...

7 replies
There's a certain product that I use and really like. A visitor asked me what I was using for this application, and before answering I headed over to their page to see if they have an affiliate link (considered a blog post review as an answer to his question).

This company does have an affiliate program. Here are the details:
  • Directly paid to PayPal account (good)
  • 20% commission (poor for a digital product)
  • Hold payment until the 15th of the following month (why, when you do direct to PayPal, other than to keep our money longer?)
  • No payment until your commission balance crosses a threshhold (so that they can keep the commissions forever - unless you're seriously promoting them)

I'm not going to waste my time with a blog post. I will give the visitor the name of the product.

I have quite a few affiliates that make sales of my products very sporadically. Why would I hinder ANYONE from selling my products, even if it's only a sale every couple of months? While I really appreciate those who push and sell more, the small sales add up over time, too.

Am I missing something?
#affiliates #minimize #sales
  • Profile picture of the author SeattlePurple
    I agree.

    To them it may seem they get more sales this way from affiliates, and they probably do.

    But how many potential affiliates read that and clicked the back button to go find a different product to promote?
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    • Profile picture of the author Mattk
      I wonder how much money CJ or even Google Adsense keeps due to their $100 threshold.
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  • Profile picture of the author Kelly Verge
    Not only all of the above, but these policies fly in the face of the best motivational practices. It's MUCH better for someone to receive small, instant rewards for incremental actions than to have to wait. This more quickly gives them a sense of accomplishment and encourages them to work harder.
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  • Profile picture of the author KristiDaniels
    All of those factors are probably due to a high fraud rate in that niche.

    Here is the scam they prevent:

    1. The scammer sees the affiliate program that is wide open and ready for this common scam because they pay affiliates immediately and they have no minimum number of sales or minimum threshold.

    2. They buy the product. Sometimes they use a stolen credit card or PayPal account. Other times they use their own credit card. Sometimes they get a friend involved to make the purchase.

    3. They collect the affiliate commission.

    4. If they used their own card or PayPal account, they now demand a refund, initiate a chargeback or put in a PayPal dispute. If they used a stolen card or PayPal account, the owner of that card/account will do the same once they discover the unauthorized charge.

    Scam complete. If the affiliate commission was 50% on a $100 item, they have now successfully scammed you out of $50.

    Even worse than being ripped off for the $50, you now have another chargeback or PayPal dispute on your record. Eventually you will lose your merchant account from all of the chargebacks.

    The minimum threshold helps prevent this because scammers are lazy. If your minimum threshold requires three sales, the scammer has to use three cards, three IP addresses, three friends, three email addresses, three PayPal accounts, etc. There is a good chance that you will notice some kind of pattern in the three sales and the scam won't go through.

    The minimum wait time also helps prevent this scam. If the scammer has to wait 30 days to get their payment, they only have another 30 days to do the refund request or the chargeback or PayPal dispute to complete the scam. If they wait period is longer than the chargeback or PayPal dispute length of time, then the scam becomes impossible.
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    • Profile picture of the author Kelly Verge
      Originally Posted by KristiDaniels View Post

      All of those factors are probably due to a high fraud rate in that niche.

      Here is the scam they prevent:

      1. The scammer sees the affiliate program that is wide open and ready for this common scam because they pay affiliates immediately and they have no minimum number of sales or minimum threshold.

      2. They buy the product. Sometimes they use a stolen credit card or PayPal account. Other times they use their own credit card. Sometimes they get a friend involved to make the purchase.

      3. They collect the affiliate commission.

      4. If they used their own card or PayPal account, they now demand a refund, initiate a chargeback or put in a PayPal dispute. If they used a stolen card or PayPal account, the owner of that card/account will do the same once they discover the unauthorized charge.

      Scam complete. If the affiliate commission was 50% on a $100 item, they have now successfully scammed you out of $50.

      Even worse than being ripped off for the $50, you now have another chargeback or PayPal dispute on your record. Eventually you will lose your merchant account from all of the chargebacks.

      The minimum threshold helps prevent this because scammers are lazy. If your minimum threshold requires three sales, the scammer has to use three cards, three IP addresses, three friends, three email addresses, three PayPal accounts, etc. There is a good chance that you will notice some kind of pattern in the three sales and the scam won't go through.

      The minimum wait time also helps prevent this scam. If the scammer has to wait 30 days to get their payment, they only have another 30 days to do the refund request or the chargeback or PayPal dispute to complete the scam. If they wait period is longer than the chargeback or PayPal dispute length of time, then the scam becomes impossible.
      That all makes sense.

      I guess that's why I prefer RAP for both my affiliates and me.
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  • Profile picture of the author rondo
    Almost all affiliate programs and affiliate networks work that way.
    30 or 60 day hold for the refund period is normal.
    The payment threshold reduces administration and maximises cashflow, but also deters buyers from buying through their own aff link.

    I agree 20% seems low for a digital product.


    Andrew
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  • Profile picture of the author Brad Gosse
    When your affiliate program grows to a certain size you will see why all of these restrictions and more might be necessary. Of course the exception being the poor commission structure. LOL
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