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Comparison Of Real World And Online Affiliate ProgramsComparison Of Real World And Online Affiliate Programs
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Subjects > Computers > Internet > Web > Web Culture Discussion
See also Sample Affiliate Programs
Online affiliate programs resemble programs of companies that in the real world common people term as pyramid schemes . The usually structure their programs so they are not pyramid schemes , but in practice they probably have many of the worst features of pyramid scams.
In the online world, some programs, such as Amazon Associates (Amazon Associates Program ) from Amazon , prohibit an affiliate from ordering from their own account. The companies have decided that they dont want people to sign up for an affiliate account just to have a way of ordering their own products at a discount. Such schemes are often easily circumvented by doing ordering to deliver to friends, or ordering through other affiliates sites as a reward for some service such as programming or web design help.
A few online affiliate programs require the affiliate to first purchase products of the company. For some, such as the Internet Marketing courses of Corey Rudl, this is optional, but encouraged.
The vast majority of online affiliate programs, in the absence of requirements that affiliates must purhase product, instead set unrealistically high minimum commission pay out threshholds. Although there has been a federal law that, because of tax reasons, requires affiliate programs to pay affiliates their accumulated earnings at the end of the year, whether or not arbitrary minimum threshholds were met, few programs are compliant with this law.
By setting very high initial payment threshholds, the online affiliate based marketing program is emulating some of the worst features of real world programs that require an affiliate to sell a considerable volume before having any hope of recieving a check. As an example, Amazon's policies typically require a an affiliate to sell anywhere from 50 to 150 books in order to accumulate the minimum $100 payout. An affiliate also has the option to get a smaller payout in the form of non-negotiable, easy to loose, emailed gift certificates for later purchases at full price on Amazon. (Affiliates are not given any commission on the use of that gift certificate.) For the typical small site with 20 or less visitors a day (95% of all websites fall into this category), and typical conversion rates of only 1% - 2%, if the site sent every visitor to Amazon, they might only expect to sell 30 books a year. They might need to be an affiliate for 3 or 4 years just to receive their first $100 check.
Several real world affiliate programs charge some kind of monthly maintenance fee. Many require the monthly purchase of "business building" materials in order to qualify for the highest bonuses. Typically these business building materials are not commissionable, and only a small group of very successful people in the organization get to design, produce, and make money from presenting these materials to everyone in the organization. Some of those people make more money from selling these motivational and instructional items than they make from sales of the companies real products. I am not aware of any online affiliate program, that did not begin as a real world company, that requires such purchases from their affiliates.
Unfortunately, some online affiliate programs, such as Amazon, are emulating their real world counterparts in this area of charging fees to the affiliates. Some now charging a fee for every real check sent to their affiliates. By using oddly named banks that no one outside a small area has heard of, they can also make it more difficult for affiliates to be able to cash the checks that they receive. They try to pressure affiliates into accepting electronic deposit arrangements. Have you ever had to sort out an electronic deposit gone wrong? It can take many months.
Some extra details about [affiliate programs and pyramid schemes].
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