Shocked by Clickbank processing fee of 10%

by Justin Koh 30 replies
hi,

I just launch my product http://www.urgencyoffermanager.com yesterday.
it retail at $37 currently.

when i check my clickbank stat, the personal sale that i made is reflected as $33.22

$37 - $33.22 = $3.78

$3.78/$37 = 10.21%

I am quite shocked.. how come the processing fee are so high?
I was expecting around 1-3%..

even my affiliate ask me why the clickbank charges are so high.

am i missing something somewhere?
anybody know about this? can provide some insight...?
justin Koh
#main internet marketing discussion forum #10% #clickbank #fee #processing #shocked
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  • Profile picture of the author Harold Hsu
    Hi Justin,

    The Clickbank fee for your product is $1 + 7.5%.

    That about right - you should be getting $33.22 for your direct sales...

    Don't sweat it though, I'd advise you to focus your time and energy in getting more traffic and sales rather than worry about the fee.

    Until there is a serious contender for Clickbank (Paydotcom?), most of us will probably be sticking to Clickbank.
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    • Profile picture of the author jjpmarketing
      These processing companies are getting downright greedy. I didn't realize clickbank charged so much. They are more or less pulling an eBay. Because of their dominance as an affiliate marketplace, they charge more. It is almost worth it to invest in your own affiliate program.
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      • Profile picture of the author jhongren
        that is most of our business model - money slipping through our fingers without us knowing :_(

        Cheers,
        John
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        • Profile picture of the author jjpmarketing
          Save $3 per sale... 1000 sales would give you an additional $3000. Instead Clickbank has your $3000.
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          • Profile picture of the author rwil02
            You need to consider that the processing fees charged to ClickBank are probably around 2.5% to 3% to start with, maybe more considering these are "card not present" transactions.
            Then the development cost.
            Servers.
            Bandwidth.
            Support staff.

            2Checkout is 5.5% + 0.45 per transaction. They don't provide affiliate support in any way.

            Overall, I consider ClickBanks fees quite reasonable.
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            • Profile picture of the author jjpmarketing
              Really it isn't even clickbanks fault. It is the rapid demise of many large banks causing this. They are losing money on loans, so they jack up processing fees to help soften the the blow from the losses on the loans.
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              • Profile picture of the author Harvey Segal
                Clickbank fees have remained the same for at least the six years I have used them.

                Here is a calculator to help you see how the proceeds are shared out.

                ClickBank Calculator

                Harvey
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                • Profile picture of the author Platinum Matt
                  Lots of you are missing the bigger picture. Admittedly, in the current online climate I don't feel there's any room for Clickbank to INCREASE prices, I do however believe they offer GOOD value for money... I'm a long term, very happy user of Clickbank.
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                  • Profile picture of the author milan
                    I'm confuzed. Do you want us to go to your site and buy or to discuss the Clickbank fees? You don't want us to believe the name of the url has to do something with the fees? Sheesh.
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                    • Profile picture of the author Didier Faucher
                      I usually don't buy ClickBank products unless that's something I really need (opposed to "want" ) and can't find anywhere else, because they add 19.6% for VAT to the final price (I'm in France; UK VAT is 17.5%).

                      Note that VAT is paid by European Union customers only.

                      Your customers pay 15-25% more depending the country they live in.
                      As a seller, you get less from EU purchases.

                      Didier
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                      • Profile picture of the author CDawson
                        Banned
                        Well if you wanted to get 37 dollars why not add the 3 dollars to that when you tell them the price. They get their charge and you get the price you want?
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                      • Profile picture of the author JPaston
                        Originally Posted by Didier Faucher View Post

                        I usually don't buy ClickBank products unless that's something I really need (opposed to "want" ) and can't find anywhere else, because they add 19.6% for VAT to the final price (I'm in France; UK VAT is 17.5%).

                        Note that VAT is paid by European Union customers only.

                        Your customers pay 15-25% more depending the country they live in.
                        As a seller, you get less from EU purchases.

                        Didier
                        Don't let that put you off ClickBank. I know you, honestly, shouldn't do this but just enter the zip code of someone you know who lives in North America on the Clickbank payment page if you really want to avoid the VAT being added.
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                        • Profile picture of the author LB
                          Clickbank charges anywhere from 2-5% more than a regular merchant account depending on the kind of rates you can get.

                          For that fee they expose your products to a huge pool of affiliates, pay all of them anywhere in the world, handle any of their inquiries not to mention billing and payment problems, collect VAT and sales tax and remit it to the appropriate governments, issue 1099s at the end of the year for tax purposes, print their number on billing statements so you don't get called about billing issues and finally, after 10 years online I can say they pay more reliably than just about anyone out there.

                          I think their fee is high if you compare them to a standard merchant account- they are not a standard merchant account.

                          (not to mention that my last merchant account basically stole my money)
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                          • Profile picture of the author rajhu
                            LB -- You are right on the money about Clickbank.

                            I do however don't like some of the limitations with using Clickbank. For one you'll have a hard time selling expensive products beyond $50.

                            I mean you need to get it approved and I do believe they have a fairly low upper price limit for your products.

                            Next if you want to have your affiliates join just one affiliate program but get credit for multiple types of products sold, that won't work with Clickbank.

                            Say I'm an affiliate and I send traffic to sell a fitness product. I only get credit for selling that product and the product owner will get a customer and or many subscribers because of me. Then he can continue selling other products to those customers.

                            A better system would pay the affiliates for all of the products that company sells. So that the affiliate is making sales of products he or she didn't even know existed.

                            This is a much better system and makes it much more attractive for affiliates because they can make way more money in this way. I love being parts of these kinds of affiliate programs and will send them more traffic because of lifetime sales and selling multiple products.

                            One other limitation is that the highest payout is 75%. There are times when I'd like it higher. And I'd like to be able to give JV partners higher commissions. With Clickbank it's one commission rate per account. Although you can adjust it up or down as you wish.

                            Roger
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                            • Profile picture of the author Tuzic
                              Banned
                              Hi,

                              yes these are the fees they charge! it does seem high so you can also focus on get paid traffic then or do lots of social book mark & social network adsvertising as they are the cost effective ways.
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                            • Profile picture of the author LB
                              Originally Posted by rajhu View Post

                              LB -- You are right on the money about Clickbank.

                              I do however don't like some of the limitations with using Clickbank. For one you'll have a hard time selling expensive products beyond $50.

                              I mean you need to get it approved and I do believe they have a fairly low upper price limit for your products.

                              Next if you want to have your affiliates join just one affiliate program but get credit for multiple types of products sold, that won't work with Clickbank.

                              Say I'm an affiliate and I send traffic to sell a fitness product. I only get credit for selling that product and the product owner will get a customer and or many subscribers because of me. Then he can continue selling other products to those customers.

                              A better system would pay the affiliates for all of the products that company sells. So that the affiliate is making sales of products he or she didn't even know existed.

                              This is a much better system and makes it much more attractive for affiliates because they can make way more money in this way. I love being parts of these kinds of affiliate programs and will send them more traffic because of lifetime sales and selling multiple products.

                              One other limitation is that the highest payout is 75%. There are times when I'd like it higher. And I'd like to be able to give JV partners higher commissions. With Clickbank it's one commission rate per account. Although you can adjust it up or down as you wish.

                              Roger
                              The 41-Year-Old Teenager
                              I do agree that Clickbank could add a lot more functionality to their product and affiliate system. 100% commissions and varying commission rates within one account would be great for a start.
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                              • Profile picture of the author seasoned
                                Justin,

                                YOU can't charge a person! CLICKBANK can't charge a person! The BANK does! And the bank can't ask the customer for money, so they would make NO money if the customer paid on time, and in fact would LOSE! SO, the bank charges CLICKBANK! It is known as a DISCOUNT! That can range from .5-5%! .19-1.85 in your example! They may ALSO charge a processing fee of about .20 to about $1! So that is .39-$2.85!

                                Besides, are you one of those people that think your customers pay you? HA! The BANK pays you! The CUSTOMER pays the BANK back LATER! They may not even get the bill for two months! So the BANK is trusting you with their money. If you shut down 100%, and were foreign, and the customer did a chargeback, the bank, might be out the money.

                                ALSO, YOU can't very well ask the bank to charge, and clickbank can't either, so you need a GATEWAY! THAT could cost .20 to .70 easy. So that is like .59-$3.55!

                                SO, Clickbank is getting like $3.19(Trust me, I DOUBT it is near that!), OR .23(also UNLIKELY, but possible. This would be if they had bad credit, too many chargebacks, and/or sold things like X rated stuff.). So $1.48 might be just about right(That is about 4%). And they have to pay for a number of things out of that.(For THAT, you get simpler use, advertising, and affiliates) WHY do people compare clickbank to paypal when they are totally different!?!?!? HECK, clickbank now has paypal as an option, so they OBVIOUSLY have to charge MORE than paypal!

                                If you think 4% is too much, change your prices to 4% above your costs, because I guess you aren't getting enough! If you are charging MORE, I don't get your point?

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

                                  If you think 4% is too much, change your prices to 4% above your costs, because I guess you aren't getting enough! If you are charging MORE, I don't get your point?

                                  Steve
                                  Do you seriously not get the difference between a % based fee and a profit margin?
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                                  • Profile picture of the author seasoned
                                    Originally Posted by Jelasco View Post

                                    Do you seriously not get the difference between a % based fee and a profit margin?

                                    Do you SERIOUSLY not get the point that I am saying that it IS a profit margin(What CLICKBANK is making), and that the person I wrote to implied that they were charging less for THEM!?!?!? The FEE, on top of expenses, and profit margin, are the SAME thing! THEIR profit is simply part of YOUR expense, or do YOU seriously not get that!?!?!?

                                    Steve
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                                    • Profile picture of the author Rick M
                                      What people need to keep in mind is that most banks regard "ebooks" as high risk and charge a premium rate for it or just flat out reject processing for it. And when you consider the VOLUME clickbank must do on a monthly basis it doesn't surprise me that they are higher than paypal.
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              • Profile picture of the author Jelasco
                Originally Posted by jjpmarketing View Post

                Really it isn't even clickbanks fault. It is the rapid demise of many large banks causing this. They are losing money on loans, so they jack up processing fees to help soften the the blow from the losses on the loans.
                I assume you're kidding.

                Clickbank has had those high fees for many years. What do a few bank failures have to do with it? I haven't heard of merchant accounts raising their transaction fees- the issue in this thread is the huge amount CB adds on top of that.
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            • Profile picture of the author Jelasco
              Originally Posted by rwil02 View Post

              You need to consider that the processing fees charged to ClickBank are probably around 2.5% to 3% to start with, maybe more considering these are "card not present" transactions.
              Then the development cost.
              Servers.
              Bandwidth.
              Support staff.

              Overall, I consider ClickBanks fees quite reasonable.
              Then how is PayPal able to charge me under 3%? Don't they have servers, staff, etc. as well?

              This discussion doesn't even include all the ways CB keeps even more of our money beyond their per-sale fee.
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  • Profile picture of the author rwil02
    FROM the FAQ:


    --------------------------------------------------------------------------------

    1. How much will I receive for products sold through ClickBank?
    For standard products, initial payments for recurring subscriptions, and all installment payments, ClickBank purchases the product from the publisher at a wholesale price equal to 92.5% of retail, less a $1 stocking charge. This is also true of rebills for recurring billing subscriptions when the rebill price is $40 or more. However, for recurring billing subscriptions where the rebill price is less than $40, ClickBank purchases the rebills for the subscription from the publisher at a wholesale price equal to 90.1% of retail. For affiliate directed sales, the commission percentage is subtracted from the net sale price.

    For affiliate directed sales, the commission percentage is subtracted from the net sale price.


    7.5% * 37 = $2.775 + $1 = $3.78
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    • Profile picture of the author pjs
      Wow! I've never sold on Clickbank before, I've always used my own processor (merchant acct / paypal).. That's wild. I guess it's worth it for the built in audience and affiliates..
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      • Profile picture of the author star007
        Yes and don't forget that clickbank also handles all of your refund activity. It's just a cost of doing business. One good thing about them is there are no monthly processing and statement fees like there are with traditional merchant accounts
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    • Profile picture of the author Marian Berghes
      thats why i use click2sell.eu, only takes 1to3 $ depending on your price...even if its not that big as clickbank but it offers great service in my opinion
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