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The biggest red flags as an affiliate?

by Kurt@viewswin
8 replies
When you are looking to join as an affiliate, what are the biggest red flags or things that make you run for the hills. I read on another thread that if a business does not ask for your tax I'd this seems dodgy? Or is it a bigger turn off to be asked for this information?

Also, I have been reading up on the use of the code of ethics by the world federation of direct sellers associations. http://www.wfdsa.org/files/world-codes/code-book.pdf link there for anyone interested. Would it be a turn off to require a check box for potential affiliates to confirm that they have read and wi abide by this code of ethics in order to be accepted. I am thinking this would be a good strategy for selling products or services with tiered commissions, (I am loathed to use the term MLM for fear of the thread dissipating into the usual oblivion), however that is what I mean, a legit mlm structure of commissions payment.

My thoughts are that firstly you cover yourself legally from the actions of unethical distributors. Next that you protect the brand, and finally you can delete an account at the drop of a hat if they start focussing to much on thee ru
Recruiting side of the income stream, or being misleading/deceitful.

So I guess my question is if an affiliate required you to provide tax identification, and agree to abide by the code of ethics, would that deter you (or even could it even encourage you to believe in the legitimacy of the company).

Also, would a mandatory 5% of earnings minimum to be donated to one of 10 charities supported by the company also send you running. (You the affiliate would get the tax deduction NOT the company).

Are there any other things that are immediate red flags as an affiliate (and unethical of unsustainable).

Feel free to be brutal with your criticism / suggestions

Thanks
#affiliate #biggest #flags #red
  • Profile picture of the author hango
    Originally Posted by Kurt@viewswin View Post

    When you are looking to join as an affiliate, what are the biggest red flags or things that make you run for the hills. I read on another thread that if a business does not ask for your tax I'd this seems dodgy? Or is it a bigger turn off to be asked for this information?

    Also, I have been reading up on the use of the code of ethics by the world federation of direct sellers associations. http://www.wfdsa.org/files/world-codes/code-book.pdf link there for anyone interested. Would it be a turn off to require a check box for potential affiliates to confirm that they have read and wi abide by this code of ethics in order to be accepted. I am thinking this would be a good strategy for selling products or services with tiered commissions, (I am loathed to use the term MLM for fear of the thread dissipating into the usual oblivion), however that is what I mean, a legit mlm structure of commissions payment.

    My thoughts are that firstly you cover yourself legally from the actions of unethical distributors. Next that you protect the brand, and finally you can delete an account at the drop of a hat if they start focussing to much on thee ru
    Recruiting side of the income stream, or being misleading/deceitful.

    So I guess my question is if an affiliate required you to provide tax identification, and agree to abide by the code of ethics, would that deter you (or even could it even encourage you to believe in the legitimacy of the company).

    Also, would a mandatory 5% of earnings minimum to be donated to one of 10 charities supported by the company also send you running. (You the affiliate would get the tax deduction NOT the company).

    Are there any other things that are immediate red flags as an affiliate (and unethical of unsustainable).

    Feel free to be brutal with your criticism / suggestions

    Thanks
    Kurt,

    Interesting thoughts, since I rely a lot on affiliates (via clickbank) for revenue. Since CB handles the legal, tax stuff, I focused on what you said about distributors focusing on recruiting affiliates vs. the customer. You made me worry since I recently raised my affiliate commission for a short period of time, to make up for an unexpected outage on my product. For me, since it's a one time purchase product, the only way I can "give back" is by letting people make money on my product while I take an almost 50% loss (compared to my normal revenue). Anyway, you have me second guessing on whether I did the right thing or not...

    Regarding your other points... I think you have to believe in the product you're selling. I would also be really cognizant of the taxes, etc. Your distributor should give you W9s (in the U.S.) for taxes, etc.

    I read up on being an affiliate and a distributor. You really have to get advice from a lawyer and a CPA if you're making a lot of money. It's better than big brother knocking on your door...

    Good post.
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    • Profile picture of the author SunilTanna
      First off, are you sure everything in the code is even applicable to affiliates. I only scan read the TOC, but a lot of the items seem to be about how the company conducts business. So why burden affiliates telling them about your responsibilities. Stick to telling them about theirs. Write your own document that focuses on what you want them to do, how you want them to behave, and nothing else.

      As for the charity. If you want to give your money to charity, that's up to you, and great. If the affiliates want to give their money to charity, that's up to them, and great. But it feels sleazy to *make* somebody else give to charity, especially if you don't give them a completely free choice of charities. If you want to give 5% of revenue to charity, take it from your own share, not theirs.

      Business opportunities that mention charity too prominently are often sleazy (not always obviously but sometimes). If you've been round the block a few times, you will see that pyramid schemes, etc., often hide behind "we are generating money for needy families/charities/etc.". These types of schemes use the name of a charity to add a spurious air of legitimacy to a dubious scheme. I'm not saying you are doing that, but even if you are 110% legit, then people may nevertheless assume you are a scheme.

      Finally, have you got permission to use the names of charities in this way? Some charities are quite sensitive about this kind of thing, having been burned by schemes before and wanting to protect their brand from any possible inappropriate association. Also, you might want to get advice on the legal aspects of collecting for charity - again there are laws in many places, which could get enforced if you start mixing charity with business opportunity.

      P.S. Tax ids = not a problem. You gotta do what you gotta do legally. Serious affiliates may however preferred to be paid by an established affiliate network such as ClickBank, CJ, etc., which has already established some confidence/credibility in reliability of payments.
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      • Profile picture of the author Kurt@viewswin
        Thanks for your thoughts I think you are right in most regards. I will answer in case anyone else is interested in this thread. I have thought every which way about this, and your post confirms some of my suspicions.

        Originally Posted by SunilTanna View Post

        First off, are you sure everything in the code is even applicable to affiliates. I only scan read the TOC, but a lot of the items seem to be about how the company conducts business. So why burden affiliates telling them about your responsibilities. Stick to telling them about theirs. Write your own document that focuses on what you want them to do, how you want them to behave, and nothing else.


        Sure, the terms and conditions will outline what is directly applicable to affiliates. However as part of complying with the Direct Sellers Association of Australia, (which is a member of the WFDSA), it is advisable to provide all direct sellers with a copy of the code of ethics. There are many parts which although are a responsibility of the company, still relate to affiliates and their rights, (if i am following the code of ethics that is), an example is cooling off period. I will definitely provide a summarized version for quick reference.


        Originally Posted by SunilTanna View Post

        As for the charity. If you want to give your money to charity, that's up to you, and great. If the affiliates want to give their money to charity, that's up to them, and great. But it feels sleazy to *make* somebody else give to charity, especially if you don't give them a completely free choice of charities. If you want to give 5% of revenue to charity, take it from your own share, not theirs.
        Good point, they will have the option to donate a percentage of their earnings, however not be forced.
        Originally Posted by SunilTanna View Post

        Business opportunities that mention charity too prominently are often sleazy (not always obviously but sometimes). If you've been round the block a few times, you will see that pyramid schemes, etc., often hide behind "we are generating money for needy families/charities/etc.". These types of schemes use the name of a charity to add a spurious air of legitimacy to a dubious scheme. I'm not saying you are doing that, but even if you are 110% legit, then people may nevertheless assume you are a scheme.


        Unfortunately you are right here I think. The mention of a charity is a red flag, which is crazy but true. The site will be donating all residual earnings that do not reach above the cash out threshold, (affiliates who earn $2.50 and such and then dissapear), users will also have the ability to select a percentage of earnings to donate to one of the 10 charitable funds. However even this (although 100% legit), seems to suggest dodgy. I am hoping once we have gotten the ball rolling and started posting how much has actually been donated then we will gain credibility. I plan to make all financial transactions in this regard available, and to post letter of thanks from each group.


        Originally Posted by SunilTanna View Post

        Finally, have you got permission to use the names of charities in this way? Some charities are quite sensitive about this kind of thing, having been burned by schemes before and wanting to protect their brand from any possible inappropriate association. Also, you might want to get advice on the legal aspects of collecting for charity - again there are laws in many places, which could get enforced if you start mixing charity with business opportunity.


        Yes I have a long history in Not for Profit, and a good understanding of the law in this regard. And plenty of contacts in the industry. I am struggling more with the end user perspective, and the usability issues. (which your response has helped with). Any more thoughts on this would be great!

        The other thing, is because I am actually involved with some of the major not for profits, this could rub people the wrong way. It makes no sense really, but I guess as an affiliate if you make a donation to an organisation, and then find that the owner of the company is involved with the organisation, then you might be thinking hey what's going on here? The truth is that I am honestly looking to create funds for good causes, however the cynical people might not believe or see it that way. (I am a cynic too so I completely understand this though process).


        Originally Posted by SunilTanna View Post

        P.S. Tax ids = not a problem. You gotta do what you gotta do legally. Serious affiliates may however preferred to be paid by an established affiliate network such as ClickBank, CJ, etc., which has already established some confidence/credibility in reliability of payments.


        Yes I have considered this, however the concept might be more suited to other methods. However thanks for pointing it out.
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    • Profile picture of the author Kurt@viewswin
      Hango, thanks for the reply. If I understand your message correctly then I don't see any problem with you increasing your commissions for a short time.

      I am really trying to gain an end user perspective on these issues, complying with the WFDSA code of conduct, requesting Tax Id, and if charity (although legit) actually reduces peoples perception of a company? (Online companies anyway).

      Has anyone been an affiliate with a company that has required that the WFDSA code of conduct be read and agreed to? (sorry i am sounding like a broken record repeating this, however I find it crucial)
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  • Profile picture of the author Social App Zone
    The biggest red flags are bad web/forum feedback. You can save a lot of grief by doing a background check on the companies history and conduct with affiliates.
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    • Profile picture of the author Kurt@viewswin
      Originally Posted by Social App Zone View Post

      The biggest red flags are bad web/forum feedback. You can save a lot of grief by doing a background check on the companies history and conduct with affiliates.
      Thanks, yes that is for sure. I am wondering whether supporting charities might bring some negative rants on forums from people who suspect the worst, (without actually knowing for sure). There are a number of strategies for per-emptivly addressing this. However I wonder if it is even an issue?

      Hope this post makes sense!
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  • Profile picture of the author pdrs
    Originally Posted by Kurt@viewswin View Post

    Also, would a mandatory 5% of earnings minimum to be donated to one of 10 charities supported by the company also send you running. (You the affiliate would get the tax deduction NOT the company).
    This is interesting and I've never come across it before, but if they were decent charities and I got the tax credit it certainly wouldn't turn me off.
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    • Profile picture of the author Kurt@viewswin
      Thanks for saying. However as pointed out by SunilTanna the mention of charities does conjure thoughts of dodgy operators. I think we would have to make it optional, with the affiliate still getting the tax deduction. We might have a monthly "good affiliate" feature where the higher donators receive recognition by having their profile featured. Maybe we can match their donation or something. Once we have actually made some significant donations and received letter of thanks to post in each section, (and media coverage) then we will have more credibility. We will also provide financial statements on the website regarding donations by the company.
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