First a disclosure and mea culpa. I signed up as an affiliate for InstantAttention several days before buying it. When I decided to purchase it, I intended to buy it through Anthony Blake's affiliate because he is the one who turned me on to it. Well, I mistakenly ordered it through my own affiliate link.

Well, it happens to me a lot - today, in fact. I see orders for my products where the buyer is abusing the purchase price by signing up as an affiliate and buying my product with a 75% discount.

Is this just part of the cost of doing business? I've thought about hiding the affiliate sign-up page, but then the number of legitimate affiliates would probably decline significantly.

So should I just grin and bear it?

Kelley, awthrawthr@yahoo.com

Kelley,

There are a couple of schools of thought on this topic.

Some are aggressively against the practice. They go so far as to cancel the affiliate status of anyone they catch doing this (Wordtracker.com for example.) And ban their email and IP addresses from buying, subscribing or even viewing their websites.

A second group actually subtly encourages the practice. The thinking here is that any time you can make a prospective customer feel like they are ripping you off or pulling one over on you, your response rates will go up.

Myself, I am somewhere in the middle.

I accept that some affiliates will do this, but most won't. Its just one of the small costs of doing business online.

My thinking is this...

The small boost in response from the few who do buy in this manner (many of which wouldn't have purchased without this "discount"), balances out over time with the lower average sale price.

But don't make your affiliate program harder to join, just to stop the few "bad apples". That will probably cost you more in the long run than you save in paying commissions on affiliates buying through their own links.

Eric

Hi Kelley,

Here's my opinion about this issue.

I think that most people that have the liberty of choosing whether to pay the full price for a product or a reduced one - will go with the 2nd option (how surprising...unbelievable...).

I don't see it as a theft and I don't think it's immoral.
In fact, I do it myself when I buy a Clickbank product, for example - because it's so easy.

You can't beat human nature.
Not yours and neither your clientele's.

I assume that people that start affiliate programs, still have a decent profit even after the commission went to their affiliate (or to the client, in this case).

As far as I'm concerned, I don't care if I paid the commission to the affiliate or to the "affiliate".
A sale is a sale and if the client feels like he received the deal of the century - why not ?

Sure, we all prefer that all clients will pay the full price, but getting a sale minus a commission beats not getting a sale at all.

I say, let them "rip you off" - even make it easy on them.
It probably beats all the "free bonus" stuff, anyway.

One last thing.
I think that this issue is mostly relevant to internet marketing related products.
As for other sectors and niches, I bet that 99% of potential shoppers don't even know what an affiliate program is.


Avishai

Thanks for your answer. I was afraid that there isn't much that could be done about it.

So it's sort of like shoplifting (a euphemism for retail theft.) As the seller you don't like it, but it's hard to eliminate.

I'm going to take a look at Wordtracker.com just out of curiousity, but for now, not taking any steps to block anyone.

Kelley, awthrawthr@yahoo.com

Wow, what a refreshing breath of whatever that was.

Yes, there are people out there like you with a different set of moral standards, which was the reason I posed my original question. How can I stop the people with lower standards?

It's been my experience that when someone does something that smells bad, they almost always justify it through a rationalization that eases their conscience. There might be no solution for that dynamic, which is why I was seeking a technical solution to block it if there were one.

FYI, my portion of the sale from an affiliate does NOT provide a decent profit to me if their "self-sale" is the only 'sale' the person is intending to make. It costs me money to generate prospects.

Your practice is akin to going into a store and deciding that you're only going to pay the profit that the seller would have made from the sale of a product, rather than the actual price.

When a legitimate affiliate makes a sale for, he or she generated the prospect. So in that case, my portion is "plus" money that I would not have gotten.

Also, note that legitimate affiliates aren't buying or receiving the product from me when they make a sale. They are merely selling it to someone else. When you "self-sale" you are getting the product for your own use.

I don't expect you to stop what you're doing. But I needed to share my views from a different ethical perspective, just as you expressed yours.

Kelley,

A strategy that I've seen work is adding a requirement that in order to become an affiliate, you must FIRST become a customer.

You will have to manually approve affiliates by checking that they are in fact customers...but it solves your problem...especially if your product is high-end.

Ed

Thanks, Ed!

Right now I use Clickbank. I'll need to check to see if they have that option. If not, it's still good to know should I start using another credit card processor.

Thank you again.

Kelley Eidem, awthrawthr@yahoo.com

Ed makes an excellent point.

Clickbank does not allow this option, however for your larger back-end products, this is a great way to handle things.

And it improves the overall quality of your affiliates, because they should all be more familiar with your products.

This is the exact method Armand uses for many of his products including Multitrack Generator.

Eric

I don't think it's so much an issue of giving an individual a discount or not (you have the affiliate program after all). What's important is whether or not your affiliates who are sending you traffic are protected or not.

If their CR% is too low because others are hijacking their affiliate links - you risk losing them. It's in your best interest to take this into serious consideration.

One way to protect against this is to use tracking that goes with 1st referrer, and that does not overwrite cookies (at least within a certain time frame). This too is debated as a strategy among affiliates - some for, some against.

Regarding forcing someone to purchase before they can become an affiliate - I think this is ok if you have just one tier, but if you have a two-tier program, then if I remember correctly, it may actually be illegal, and put you, as a merchant, into the category of a pyramid scheme - so be careful and look at legislation closely before this is done (or simply don't make it a written condition in your terms - just "hide" your sign-up page from non-purchasers).

It's a sticky subject, but as a merchant, make sure you take steps to protect your current sales partners - in the end, only a very small percentage will produce - keep them happy!

Just some thoughts,

Tim

When it comes to internet marketing related products, the vast majority of your potential clients are people with "low moral standards", as you put it (Hmmm, hmmm - did someone say self righteousness?).

Let's take an example of a site that created a lot of buzz recently: The Rich Jerk.

The product costs 97$.
The affiliate (or the "affiliate") gets 50% - that's 48.50$.

Now, let me ask you this: excluding all the total newbies that know nothing about Clickbank, how many of the purchasers that are familiar with the Clickbank system, used the option of buying the product in the reduced price ? 30% ? 50% ? 70% ?
How about 80% or even 90% (which is more realistic if you're asking me).

Now let's think about the rich jerk himself.
Do you think he's angry and frustrated because so many people "abuse" the Clickbank system ?

Well, you're pretty naive if you do.

And by the way, if you do look for a way to prevent this - here's another idea.

Let's say you have a product that costs 50$ and the commission is 50% (25$).
You just set the minimum payment on 30$ and unless the affiliate will make another sale- he'll not get the commission.

But I wouldn't do it.