Sunday, February 06, 2005

High Commission Payouts

This is something that really bothers me, and has been on my mind for awhile now. Regarding Affiliate Marketing, and some of the very high commission programs that are popular among Internet Marketers.

I should say upfront that I love Affiliate Marketing, and I love big commission checks - as much as the next person. But there's a point where it's just plain unethical (in my opinion), and I feel that merchants should draw the line so as not to devalue their product or service.

Let's take the "Big Seminar" as an example - and it's just an example, as there are plenty of similar programs. The ticket price is $1,997 and the affiliate payout is $1,000 per sale.

The ticket price, or price of any product/program is not the issue. Most of these are well worth their price tags (and then some, in most cases).

The problem is with the $1,000 commission (which in the case of the Big Seminar, is posted directly on the main sales page). I visited the sales page this weekend because the upcoming event is in Atlanta, GA and I have been considering going this time around.

After reading through it, I would be more than happy to pay $997 to attend, ordering directly from Armand of course. Obviously that is all the actual Seminar is worth (to him). Or at least that is the conclusion my subconcious draws after reading the Sales Letter.

On the flip side, I would also love to promote the Big Seminar coming up in Atlanta, GA. However, knowing how I feel about the value of the event... I wouldnt feel it was fair to accept $1,000 per ticket sold.

Give me $97, and the other 900+ you can put back in the attendees pockets. To me, that seems more than fair compensation for my marketing efforts - and fair to everyone involved.

This issue came up with Traffic Secrets when it first came out. The product was $997, and paid $475 in commission. To get around it, I offered a $400 rebate to those that ordered through my link. I earned a couple thousand (or so) for my marketing efforts... and the buyers got a better deal (closer to true value). And I chose to do that instead of earning over $10k for the sales I referred - because I think it would have killed me to put that much of their hard-earned money into my bank account... for practically nothing (on my end).

That didnt last long, of course, as John asked that no more cash rebates be offered. Understood, as he felt that the rebates themselves devalued the product. However, it was common knowledge that the commission rate was set so high...

I personally feel that it would really benefit us ALL if products (including services & events) were priced according to market value, with a fair compensation structure to affiliates or resellers.

Like I said, I love big commission checks as much as the next person... but I also like to earn my money fair and square. And I dont like the idea of my friends, peers, clients, subscribers or site visitors getting the idea that I am "getting rich off of them". It defeats the purpose of building a solid Internet Marketing community, and gaining the trust of your members.

I would much rather earn my big commission checks by other means - such as a PPC campaign running on auto pilot, or high search engine rankings for popular products/services (niche, non-IM)... or even honest recommendations for appropriately priced items.

[/rant] Any comments?