I called the merchant and talk to them, and what they told me surprised me.

But first, a summary: With a gap in a web service merchant’s affiliate commission payouts on an affiliate network and their in-house program, I was keen to hear what veterans in the affiliate industry had to say. The commission payout through the affiliate network was about 50% higher, compared to the merchant’s in-house program.

Communicating with the merchant was certainly a key point in addressing this issue and some might say the information gap was being unfairly used in this instance:

“That’s retarded. Tell them to retroactively apply the network rate to your in-house sales from the date they started that network rate. If they won’t, dump them..” – Geordie Carswell, RevenueWire EVP.

“I attribute the fault in this to the affiliate manager/team handling your account. It is he or she’s job is to make sure affiliates (super or not) are taken care of. That person should have given you the choice as to which network you promote their program through, or at least told you about both offers. You are a well known affiliate and blogger and you should have been informed of both options. The affiliate marketing managers of Pepperjam are in constant contact with the affiliates who make a difference our programs. We build and form relationships to gain trust. The affiliate manager who was assigned to you did not do that.” – Robyn Martin, Pepperjam Affiliate Marketing Director.

“Before I began working for LinkConnector Affiliate Network, I was the affiliate manager for a few different companies. I considered it one of my responsibilities to keep our payouts consistent between the in-house program and the network programs. If anything, our in-house program sometimes had a higher payout because no additional fees were involved. I would never have considered that disparity between commissions – that’s just shooting yourself in the foot.” – Jeannine Crooks, LinkConnector.com Affiliate Sales Manager.

“I personally feel strongly that bigger and pro-actively managed programs SHOULD offer 2 versions.
In-house and a good network. TYPICALLY, but not in this case the in-house commissions would be a little higher, possibly longer cookies, etc. to make the in-house option more attractive and offset network costs…a possible scenario hit me that COULD make sense of this situation. Not saying this scenario would make the situation any easier for you to take but…
If the merchant, like many are was clueless and the affiliate program was not being tended to properly and they hired an OPM.” – Linda Buquet, 5Star Affiliate Programs Founder.[See the 5Star discussion thread]

Which is in-line with what I would expect. An in-house program would have lower operating costs and could give out higher payouts, but the opposite scenario is at work here.

And Chickenfeed AKA Millnic Media‘s Jason Bailey chimed in with:

“you got hosed and it is your own fault. This IS the standard practice and fully within the marketers code of ethics. (I can see the shit flying at me already…)…In House programs are notoriously low payers. They are also usually the most poorly managed of the places you can pull a particular offer from. CPA networks have schwacks of experience with a wide variety of offers, merchants and publishers. In house affiliate managers are often the webmaster as well, and quite possibly the night doorman to boot (not always — **dodges shit** –)…

You got hosed. If you were doing well at $60, think how much better you’ll at $90. Hell if the CPA network is offering at $90 on the street and you can push some volume, I’ll bet the can get $95 no sweat. Suck it up. Don’t make that mistake again. Lot at the bright side – You just got a $30 pay bump!..Join all the big networks and shop around. Get them fighting each other for your traffic. You have to be the squeaky wheel to get the big payouts. Logging into CJ to see what is new doesn’t cut it.

And as Share Results Network affiliate manager Julia Stead suggests:

“Doing the research is necessary to find the top payout. I often have affiliates negotiate/barter payout rates with me for certain offers that are available through other networks, however it’s helpful to keep in mind that payout isn’t the only factor when choosing which network/program to partner with. That being said, the huge payout discrepancy that you experienced seems unusually high. ”

As an affiliate marketer, having all the information at your fingers (joining both affiliate networks AND a merchant in-house program) are necessary if you want to succeed.

Remember, as an affiliate marketer, you’re more a traffic broker, so you need to join every relevant program relevant to your niche.

I heard some interesting alternatives to the situation too:

“Merchant should be required to disclose to affiliate what networks their offers are running on + in house offers and what the respective payout are. Affiliate have a right to know. This could be done through industry self-regulation.” – Amit Mehta, Super Affiliate, SuperAffiliateMindset.com.

“I’d attribute this to one of two things:
1) lack of communication between two people that are handing things at the company. I was on the short end of this at a previous job when I managed the affiliate program. There was somebody else in the company doing “media buys” for a higher caliber of publisher than i was getting. Turned out they were cannibalizing some of my biggest affiliates for 50% more than I was permitted to pay.

2) pure idiocy. Some companies really don’t think affiliates will connect the dots when they wildly vary payouts in different places.

Either way, tell them you expect $100 a lead now.” – Shawn Collins, Shawn Collins Consulting, AffiliateTip blog, Affiliate Summit.

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So what was the outcome?

I called the merchant during their stated hours of operation “8am to 6pm” for affiliate and business development matters. And was told the affiliate guy comes in at 10am. So much for posting that information on the website.

I never got to talk to the affiliate manager and instead spoke to a series of sales guys. All of whom told me the same thing “The affiliate network determines the payout.”

“But aren’t you paying the affiliate network? Don’t you plan to synchronise your payouts?”

“The affiliate network is a third party, we don’t control them. We aren’t concerned about the commission discrepancy. You can choose which program you want to promote.”

Perhaps they could pitch this development as a new reality TV series: “Affiliate Programs Gone Wild”.

So much for customer service. I’ll be promoting other merchants from now on.

You can check out Linda’s Affiliate Forum Blogging Contest and decide if you meet the criteria and take part in the contest.

I’d first heard Linda on the Shoemoney Net Income radio show.

If you missed it you can listen to the podcast here:

Download audio file (NI100306.mp3)

I remember Linda gave a few nuggests of affiliate marketing advice on the show.

Let’s look at contests for a moment.

Are they worth taking part in?

For experienced affiliates $400 will seem like chump change, but the big payout comes in the form of the intangibles that come with participation.

Let’s look at the spinoffs:

• Visibility: By virtue of participation, you’ll have visitors checking out your contest entry. If you have compelling content, great presentation or better yet a combination of both, you’ll stand head and shoulders above the competition. You’ll build a following, especially from those who haven’t been to your blog yet.
• Social Linkage: Contests, memes and writing projects lend themselves to leading to interaction, particularly among participants. If you don’t already know the big players in your industry, this is a good opportunity to build some bridges.
• Building Social Goodwill: Any community only survives as long as people are willing to help each other. If you are actively helping someone, or being helped, it pushes forward the vicious cycle of kindness. You’ll want this cycle to be as big as possible.

So take part in the contest?

The prize is always compelling, but the payout from participation could be much, much bigger.

If you’re planning to take part, good luck!