prepayment?!

[Lior MR]

hi ppl,

I wanted to hear your opinion about the prepayment issue.

as an affiliate manager, recruiting new affiliates usually starts with a basic payment (or a budget) to the affiliate to start it's campaign.
it sounds reasonable , because no one wants to work for free right?

but we all know and heard of scams and low quality leads that just don't justifies the payment.

so, how do you know who to trust upon? (not all affiliates are well known)
how you usually manages this whole negotiation with a new affiliate that you don't familiar with it's work?
we can't just give away campaign money for people we don't familiar with and not always deliver the traffic we want.

love to hear your take on that.

Cheers all!

 

[Demii]

Simply do not pre-pay anyone. Most affiliate networks do not prepay.
If an affiliate want's a pre-payment for CPL it's most of the time going to be shit quality traffic.

PPL = Pay Per Lead e.g. you're paying per lead. Affiliate marketing/performance marketing means the affiliate should get paid when they generate a lead or sale. In my opinion, they shouldn't get paid before they make a lead/sale except if you as the AM already have good experiences with that specific affiliate.

 

[Lior MR]

Simply do not pre-pay anyone. Most affiliate networks do not prepay.
If an affiliate want's a pre-payment for CPL it's most of the time going to be shit quality traffic.

PPL = Pay Per Lead e.g. you're paying per lead. Affiliate marketing/performance marketing means the affiliate should get paid when they generate a lead or sale. In my opinion, they shouldn't get paid before they make a lead/sale except if you as the AM already have good experiences with that specific affiliate.

the reason is always: ''there are costs for starting a campaign'' (in CPA for example , the aff' can run a campaign , spending money and not getting paid if the call center don't make a sale .

 

[merjoon]

so, how do you know who to trust upon? (not all affiliates are well known)

you can ask for real proofs that are showing their previous performances and feedbacks that they received from other advertisers.
also you can ask for credit references.
when you start asking about these, they will directly give clues if they are reliable or not.
because if it is a fraudster, they don't have any proof to share
(experienced similar issues a lot and I can say that this method is working so far)

 

[Graybeard]

I can see this issue from both sides.
We used to get co-op advertising allowances from the furniture factories we bought from years ago when I was involved in local retail furniture.
It worked like this:

• We had established credit and purchase history
  
  
• We received a pro-rata 50/50 split on our newspaper ads, Full page, Section A, Sunday Edition of a large US city newspaper.
  
  By*pro-rata* I mean;
  • if 1/4 of the ad was for Sealy Mattress (bedding) we would get 50/50 or 1/8 of the total cost of the ad --the ad was $1,800/a day (1974 money ).
  • So, we might get 2 co-ops from different factories on one ad.
  
  
• In now time
  • Why not offer some rebate on the ads that produce?
  • Seems to me that an ad source can be easily tagged in the URL parameters and that ads conversion rate accounted for in some ad co-op program.
  • What if you paid for 50% of that ad campaign on some proof of performance?

From an affiliate's POV: "Why should I invest my risk capital on you goofy idea (or offer)? The sword cuts both ways.

 

[Lior MR]

I can see this issue from both sides.
We used to get co-op advertising allowances from the furniture factories we bought from years ago when I was involved in local retail furniture.
It worked like this:

• We had established credit and purchase history
  
  
• We received a pro-rata 50/50 split on our newspaper ads, Full page, Section A, Sunday Edition of a large US city newspaper.
  
  By*pro-rata* I mean;
  • if 1/4 of the ad was for Sealy Mattress (bedding) we would get 50/50 or 1/8 of the total cost of the ad --the ad was $1,800/a day (1974 money ).
  • So, we might get 2 co-ops from different factories on one ad.
  
  
• In now time
  • Why not offer some rebate on the ads that produce?
  • Seems to me that an ad source can be easily tagged in the URL parameters and that ads conversion rate accounted for in some ad co-op program.
  • What if you paid for 50% of that ad campaign on some proof of performance?

From an affiliate's POV: "Why should I invest my risk capital on you goofy idea (or offer)? The sword cuts both ways.

i understand both ways too, and every side thinks he's the right one.
the advertiser can say: thats why i have affiliate program, or else i would had publish myself.

thats the risk of being an aff' (at least in CPA model) - you have to have the skills and knowledge to run a campaign that ends with a sale, no?

 

[Honeybadger]

Affiliate marketing/performance marketing means the affiliate should get paid when they generate a lead or sale

.. or in my case pay its 45-60 days after confirmed sale !!
(customer has 30 days to return item & affiliate network processing & affiliate program processing & maybe transaction in Cayman islands )
But okay now since the first payment arrived

 

[Graybeard]

Well, I can't audit the affiliate network or program sponsor's books either ... I spend my money selling someone else's product and that other party's actions are not verifiable. That has become a problem more than once (over the years). Or accountable other than in *Internet Court* a name calling PR spectacle ....

In the dinosaur days, when I learned how to sell IRL, face-to-face in the field:
I mailed my customer's orders to the home office or I handed them to my sales manager in person

--there was never any question if there was and order
--I had a customer signed copy.​

Getting paid was a very rare issue once the order was delivered and accepted by the customer

--there was transparency end to end with a document trail I could access and see
--there were charge backs from returns and such as in any product sales situation.
​

Some positions I was reimbursed for my business expenses including auto and travel expense. I personally, by my efforts, cold calling mainly, much like SEO here; I was the businesses advertising in many ways. My sales calls created company or brand awareness

--that was my risk or contribution.​

On a few occasions new customers called in and placed orders

--for the reason of my call reports
--these called in sales were paid a commission to me even when inside sales personnel took the initial order.​

I communicated freely with the customers

--I could discover the truth easily.​

Bottom line, in this affiliate marketing arena, the counter-party's honesty is assumed based on your best judgement until suspected or proven otherwise.

 

[ZedGZ]

Simply do not pre-pay anyone. Most affiliate networks do not prepay.
If an affiliate want's a pre-payment for CPL it's most of the time going to be shit quality traffic.

PPL = Pay Per Lead e.g. you're paying per lead. Affiliate marketing/performance marketing means the affiliate should get paid when they generate a lead or sale. In my opinion, they shouldn't get paid before they make a lead/sale except if you as the AM already have good experiences with that specific affiliate.

Totally agree with you.
CPL + prepayment = 99% troubles to come.
If the affiliate has no history with the network, better not offer any fast payment terms (prepay,Net7 etc).
Trust is what makes payment terms flexible, not the other way around.

 

[Lead Network]

Agree with you guys, we are usually don`t do prepayments, a lot of skam, you know.
First things first, money have to be earned.

 

[Graybeard]

Amazon is not going to intentionally shave or chump you for your commissions.
A sale is not final if bought with a credit card for 90-180 days from the purchase --there is chargeback liability (past any return guarantee) --so as waiting period is not uncommon.
The way around this is to use
What Are Verified By Visa & 3D Secure? | Merchant Maverick
Master Card has their own version
When I processed payments --these type payments were guaranteed good by the credit card issuing bank.
Problem is there is a higher purchase abandonment rate; if that is a fraud scrub it's a good thing IMO.

As an affiliate --why put your money and effort on the wood without at least some reputation and reliability confidence? That was my point.

 

[Jone]

Generally, no advance payment is made. But what are the channels that do not make advance payment? I hope I can recommend these channels

 

[Idoubledareyou]

I do prepay only when we have work several times and its just a cashflow thing.