How Short-Sighted Are Some Merchants?

I’m back at work.  With Scottish schools going back a month earlier than their English counterparts, my Summer holidays came to an abrupt end today when my kids left the house this morning in their new school uniforms.  Not that I’m complaining.  I’m really looking forward to the coming months and the run up to Christmas, and have a notepad full of things to do.

Strangely enough, despite the current economic climate, I’m very optimistic about the future.  Intenet use in the UK is growing both in terms of broadband users and the average number of hours spent online, and more importantly more and more people are buying goods and services online.  So as customers and their money go online, the market for internet sales grows and so does our ability for internet entrepreneurs to make money.  True, a growing market will always attract new participants and so that larger cake has to be sliced into more portions, but that still leaves plenty of scope to fill your belly.

Affiliate marketing for me is a fantastic way to help a business to grow online.  Afterall, you only pay commission on sales generated by affiliates, while the cost of driving visitors and sales to your website is borne by the affiliate.

In an ideal world it would be a win-win situation, with both merchants and affiliates benefiting from what should be a partnership built on trust.  Unfotunately we don’t live in such a world.  The IAB Affiliate Marketing Council obviously recognises this and has released an Ethical Merchant Charter to promote greater transparency in the industry and foster better relationships between publishers and merchants.  The guidelines address such issues as greater transparency on why sales get deleted and recommended notice periods for changes in terms and conditions.

Initiatives like this are very important and should give affiliates greater confidence when devoting resources to promoting merchants.  But you still need merchants to play ball and I’m not sure if guidelines alone will guarantee that.  In fact, I know they won’t.

For example, I wrote earlier this year about how I had placed an order myself with Carphone Warehouse, but was never paid any commission because the order had been “cancelled”.  It hadn’t been cancelled at all, not by me anyway – I had simply been told to phone to confirm some details and when the order was finalised by phone I was given a new order number.  So I got my phone, Carphone Warehouse got their order, but the affiliate (who happened to be me) got nothing.  Incidentally, I’ve still never received my commission for this – or indeed other “cancelled” sales.  What difference will the guidelines make to such cases?  None that I can see.

There are other techniques that merchants – whether by accident or design – use to reduce the amount of commissions payable to their affiliates.

Some are blatant – like the plastering of phone numbers over sales pages to encourage people to phone through orders instead of placing them online.  A merchant earlier this year even had the cheek to create banners advertising a sale – with a landing page that told visitors that the sale was at their retail premises!  I kid you not.

Others are more subtle.  For example, not all alternative payment methods are tracked by all merchants.  I bought two items this week via my own affiliate links and paid by Paypal – neither tracked or resulted in me earning a commission presumably because I didn’t go through the standard payment process.

Another trick.  Encouraging visitors to a merchant site to leave it to visit another site owned by the merchant.  Naturally this secondary site doesn’t pay any commission.  Once that visitor leaves the merchant’s main site and buys from their secondary site, affiliates lose any commission despite doing all the hard work of finding the customer in the first place.

Merchants who seek to cut the affiliate out of the equation by whatever means are incredibly short-sighted.  For short term gain, they jeopardise both their reputation and future sales.

For me the solution lies in two places.  With the affiliate networks and with the affiliates themselves.

It’s up to affiliate networks to not only make merchants aware of their responsibilities, but to police them too.  This isn’t being done well enough at present.

And affiliates.  If a merchant isn’t playing ball, we should all do the same thing.  Walk.  Walk away and promote another merchant that appreciates your efforts.