Burts AIS, osCommerce & More Blog
New URL: www.osworld.biz

Wednesday, January 25, 2006

Does Commission Drive Sales?

So, you'll all have realised by now that I entered the Burts Challenge by having a product created which I am now selling via a website. Simple, so far. I have just one competitor, who launched a few days before I did. I spent too much time going over the details, gathering feedback and did not just get out there and "do it" as I normally do. The competition product sells for $197, which is due to increase to $297...he offers 50% commission. My product does a better job, much faster with more options and less hassle. And costs a lot, _lot_ less. Over the past few days, I've been contacting people who are in the affiliate marketing game to sell the product to their opt-in email lists and site/forum members. I sent around 25 to 30 emails to these people, and so far only one has replied. Basically his response was "wow! great tool - but I'd be missing out on $100 of commission if I sell yours; if you up the price I'll stop selling his and starting selling yours"...this kind of got me thinking - should the rate of return for an Affiliate determine whether or not he sells one product over another. In most cases, the answer is patently "yes", even though the superior (but cheaper, and consequently lower commission) tool would be better for his clients! I sincerely hope that I never start promoting products like this. I would rather say "this ABC product is crap, buy XYZ product instead" - even if it meant I earned no commission. Maybe, my view of the marketing world is not as cynical as these people yet. It appears that most marketers will do anyting it takes to get affiliate commissions, and that to me is wrong. Perhaps this harks back to my days as an offline salesman where the correct product had to be sold, or else we'd be fined for mis-selling.

Please, someone shoot me if I start promoting products based on rate of commission rather than what I believe will help you.
Of course, I could increase the product price to $197 and offer 50% commission, thereby matching my competitor - but I do not want to do that. That stinks :(

New URL: www.osworld.biz - thanks!

8 Comments:

At 1/25/2006 05:25:00 PM, Anonymous One Dollar A Day said...

Just reinforces my already cynical view of internet marketers and makes me trust them even less!

In a world where your word and reputation are eveything, it seems a bit wrong doesn't it?

Name and shame burt...go on...!

 
At 1/25/2006 05:49:00 PM, Anonymous Chance said...

As it gets closer to launch of my new service, affiliates are really starting to give me a headache.

I guess you can say "forget them" and only go with marketers who will promote your product because its actually better, but that does beg the question just how many affiliates you can attract that will have actual ethics.

 
At 1/25/2006 05:51:00 PM, Anonymous One Dollar A Day said...

Also, it makes you start thinking about how half of these marketing type products are priced...many of them don't seem to be worth their price tag...does the price get artifically inflated to attract the big affiliate marketers? I'm certain they do!

 
At 1/25/2006 05:58:00 PM, Anonymous dreamscape said...

Well perhaps I didn't read carefully enough, but it seems to me that there are 2 substitute products, yours and your competitors, which are similar to each other.

And the affiliate chooses to stay with the other over yours, because he sees he can make more money with it.

Frankly, I don't see where ethics or marketing comes in here. It is not as if the other guy's product is so different from yours that selling it would be unethical; they are substitute products, so if it is ok to market yours, then it must be ok to market the other guy's too. I personally prefer Crest toothpaste, but that does not make it wrong for someone to try to sell me Colgate, or wrong for them to choose to market Colgate over Crest. That is absolutely ridiculous if that's what you really believe.

You say yours is better, which is your naturally biased opinion; however to the affiliate it is not so much better that it would be worth taking a commission cut, and thereby having to place more effort and time in order to maintain income.

Where exactly does a cynical view of marketing come into play here? This is pure and simple economics and opportunity costs at play here.

The affiliate didn't make the wrong choice; he made the rational choice to his situation. We all do it every day, make rational choices based on perceived benefits and costs, which BTW means more than just money.

I think maybe you're just a tad too upset that only one affiliate wrote back, and he turned you down ;)

 
At 1/25/2006 07:22:00 PM, Blogger Gary B. said...

No, they are very different products. I won't go into more detail now as;

a/ I want to keep my site "secret" until Feb 1st..
b/ I don't want tpublically bash the other product..

Suffice to say that there are people who have bought both, and they are claiming a refund on the other tool - surely that tells a story ?

For reference (from a well known Internet Marketer):
OK, I had a chance to review Gary's program, which is called xxx xxxxx and I give it a big thumbs up when compared to yy yyyyyy program, both in productivity and price.

...

Overall, for what it does and considering the price, time and effort to doing it through yy yyyyyy system, I'd say the xxx xxxxx beats everything else hands down.


He's the only one that I know of who has said to this forum members, "here's a better tool"...

 
At 1/25/2006 07:36:00 PM, Anonymous Aitch said...

I’ll try to keep it simple here.

Product X sells for $100 and pays 30% commission to affiliates
Product Y sells for $300 and pays 50% commission to affiliates.

The affiliate has to come to his own decision here. Yes he gets a higher commission and return for selling product Y, but due its higher purchase price, how attractive is the item to potential buyers?

It might be the case that product X sells like hot cakes due to the lower price, and despite this lower cost and commission rate, the affiliate selling product X makes a killing on his commissions in comparison to the guy waiting for sales on product Y.

So, higher commissions are useless unless the product sells. It’s a bit of a gamble for the affiliate as he won’t know what sells until he tries. This is where those inviting the affiliates to sell their goods need to convince them why their product is best deal around.

 
At 1/25/2006 10:25:00 PM, Blogger Gary B. said...

Gary has really been super about quickly fixing bugs and adding features to xxx xxxxx. And the price is terrific. Are you kidding - $x for the amount of automation it will give you?

yy yyyyyyy tool costs almost $200. And you can't add your own snippets. You have to do it on his site. And you have to do each article one at a time. It's better than nothing at all. But Gary's xxx xxxxx is the Rolls Royce in the field right now.


Once people try it out, they see that it is the best! My problem is in getting sales of the product...

I really don't want to up the price just to get these marketers selling it, as that negates what I am all about. Bring a better service at less cost, which still makes me decent cash.

I won't change who I am for the sake of a few extra $$$ - even if that means my tool not taking off in the way I hoped.

 
At 1/27/2006 10:41:00 AM, Blogger Gary B. said...

From another of the BIG marketers:

unless I can build a monthly income, or a list, it's really
not benefitting to me to send my entire customer base to you for a one time sale


I offered 50% commission.

 

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