Affiliate Programs & Check Cutting/Processing Fees
 

This question crossed my mind over the holidays & I was going to start a thread on it sometime this week, but today I got an email from Mayor's Money that made me think I was onto something.

A lot of affiliate programs pass along the cost of sending payments to the webmaster - whether it's checks (mail & express delivery) or wires or ePassporte or whatever.

I can see the cost of a wire being passed onto the webmaster, as that fee is usually pretty high.

I can see the cost of the express delivery (UPS, Fed Ex, etc) being passed onto the webmaster, as the shipping costs are high.

But is there really a need for a $2 fee for ePassport or a check sent via the US Mail?

ePassporte charges $0.25/transaction. I assume some data has to be imported when the payouts are sent & there is a cost for that employee performing the task, but $2 a transaction?

Jim's going to dig up some info on checks for me, but I can't see where it costs $2/check to have someone print it up & mail it...let alone the $5 that Mayor's Money is now going to charge me!

I'd love to hear from some sponsors that send out checks as well as some numbers - number of checks cut, cost of supplies, the employee's payroll costs, time spent on checks, etc. and, most importantly, the cost per check.

$5? Wow. :(

I think 25 cents is for regular people to send money a few times a day being the limit. Mass sending cost me $1.00 after 5 transfers in 1 day. Now the $2 fee is likely added to cover the costs of a check writing company to do payroll and payouts and that should NOT be passed onto the affiliate IMO.

I'd be interested in hearing this too.

The processing fees being charged by JuggCash sometimes is Very weird. $100 in sales and I make $55 then the next time $100 and I make $40 with no chargebacks. Very weird.

For business account every transaction in Epassporte is cost 2 USD. It's bad, but it exists. May be it is conditioned existing of account :(
I think, partnership programms must pay full sum for adverts without any comission.

Mayor's Money also advised people to get an ePassporte account, saying "Epassporte payments will be completely free" so I have no idea if they have a special arrangement with ePassporte or if they're eating the costs.

Jim gave me some rough numbers from the old Ultra Cash days.

1500 checks

Supplies: $200 (very rough figure, as he has no idea what the supplies actually cost back then)
Payroll: $200 (one employee did them in an 8 hour day)
Postage: $600 (based on US mailings - add $0.10 - $0.50 per check for foreign webmasters)

So $1000 for 1500 checks which is $0.67/check.

And remember, this was 8 years ago - new technology & programs have to make it even easier now.

I bitched about that one in the NATS thread - I figured it to be a 24% "processing fee" that comes off the top, so you end up getting 38% from a 50/50 program.

Yet another version of the shave.

I know this is going off subject but it is like here in the UK, you purchase an item, go to check-out and we have 17.5% vat added. However, many online companies do not add the 17.5% until after they have added the postage on so were also paying 17.5% on the postage charge |huh

I'm not sure what the law is in the UK re: VAT, but here in the US it varies by State whether or not the shipping should be included when calculating sales tax.

To me, the money it costs to send a check just seems that it should be the cost of doing business. I have to wonder with a US business, is the money both withheld from the webmaster and then written off as a business expense, tax time?

I guess I can see a reason for a program using a 3rd party service. We did that in the beginning with UltraCash. I forgot the cost but I think it might have been $3.50/check. But even then, we ate the cost. We only stopped using the company because they printed the wrong account number on a check run. Nothing like having the rumor of bouncing checks going around when the check says, "Refer to Maker". :) Good tip..."Refer to Maker", some problem other than bounced check. "NSF", bounced check.

There is a $2 fee to send transfers from business account.

My personal experience is that some programs pass it on to the webmaster others don't.

Isn't that a little high when you consider that:
1 - a pier to pier transfer is only $0.25
2 - the amount of transactions that an affiliate program would do in each pay period would justify a discount due to the large volume

anyone pay your bills with online checking

thats completly free and you dont even have to pay for a stamp

I was a little disapointed with Mayors Money
i just spent some time premoting them
if I would have known that I wouldnt have bothered

Been paying for just about everything using BofA's online bill payment for years now. I think I wrote less then ten checks in the last year.

If it wasn't for checks coming in the mail from sponsors then I wouldn't even need to go by the bank anymore.

Great point Tommy!

The initial setup might be a pain in the ass, but once that was done & you had all the affiliates in there in the same order as the spreadsheet of names & amounts, all you have to do is have someone enter the totals & press a button.

Yep, I use online bill pay for both corp and personal...works great. I do pay a flat monthly fee, but it sure as hell doesn't work out to $5 check.

I was very surprised to see that mail from Mayor's as well. The cost of cutting checks to pay vendors or affiliates in this case, should be part of the cost of doing business. No way in hell could it get close to $5/check.

Always thought Mayor was a pretty classy guy in the biz, but between this and the poor numbers I've seen with them in recent months...don't think I'll be building anything new for that program :(

Basicly it comes down to this:

Checks are an archaic throw back from last century. I am attempting to make it less appealing to get a check and more appealing to get your money instantly with Epassporte. Hell I am even paying for your new Epassporte account and I will set it up for you. If you don't like getting your money instantly then you may CHOOSE to pay $5 and get a check.

If someone has a real seroius issue with a paying $5 per check, of course I'll work with them. But I prefer to use the method of payment that deliveres the money the most efficiently. I am HAPPY to pay the epass fees to do this because it's more reliable and instant.

While checks may be archaic to some, they are just fine to others.

And it's not like you're doing us a favor - you're basically saying that unless we use ePassporte, we have to pay you a fee so that you pay us, and that's wrong (both the fee & being forced to use a certain payment method)

We are independent contractors of yours. We all get 1099's at the end of the year. I can not think of any other business that charges people/companies a fee to get their money (and a very high fee at that)

Tell me this: will you still send a US based independent contractor a 1099 if they get paid via an offshore ePassport account?

If you're going to Lie and say your numbers are falling I'll post the truth

(actual numbers & dollar amounts removed by greenguy)


Seems to me your numbers have gotten better but based on your volume I understand why $5 would hurt you. Why don't you accept my offer to create you an epassporte for free?

Yes of course, it doesn't matter where I pay you from, I am paying you from an US company and are therefore obligated to send you a 1099 For your information as a US citizen you are required BY LAW to report ALL income even offshore payments.

If you can find me a way to electronically pay people by check through a bank (even with a fee) I'll be happy to use it and withdraw my fees.

Problems with paper checks include the following:
Lost checks
Stolen checks
Late checks
Human error
Washed then rewritten for tens of thousands more.

It's not the money. We pay about the same for our check writing service as we do with epassporte. It's just that checks are inherantly more problems.

Well, so much for my comment about you being a classy guy. Mayor, I'm very disappointed that you would post my personal stats in a public thread. That my friend is not cool at all.

Firstly, you didn't go back far enough...there was a time numbers with your program were MUCH better than the existing stats. You also didn't pick up the 1:10000 numbers from last summer there big fella. Gee, wonder why I'm not sending you much traffic...duh.

Yanno Mayor, my post was in no way maligning your program...simply stating that I don't see good numbers anymore, so doubtful I'll build more for you...in light of this new check fee.

NOW, you come in here and do something as classless as you just did. I'm going to go have some coffee and a smoke, and see if I cool off a bit. Otherwise, I suspect I'll be yanking every fucking link I've got to you. Not cool at all Mayor...NOT AT ALL

Oh, and I already have an epass account...thanks anyway. Gawd, I'm SO fucking close to calling you names man...and I thought you were a classy guy...my mistake.

WOW! I'm just as shocked at MrYum.

I'm pulling my links - there's no need to publicly post someone's private information like that (which I have edited out)

You did call me "names"(was a pretty classy guy) also, you claimed you were doing poorly with mayors money in recent months when the real numbers state otherwise. If want to lie about your ratios with me I am going to call you on it. It has nothing to do with class, people should know the truth. As for being close to calling me names, go ahead. It doesn't change the facts. You were trying to sound all big and tough and I called you on your bullshit.

Fact is virtually EVERYONE has been doing great with Mayor's Money and that's why we STOPPED letting just anyone sign-up. I am keeping the program tight so that people keep enjoying the ratios we have by making the program invite only. If you want to give up your spot, let me know I have plenty of people waiting to take it.

Actually we generally use about a $5.00 figure now in systems design costing. The costs you mentioned plus, a ton more like ink/toner, maintenance. hardware depreciation, archiving/storage, reconciliation, etc.

I don't think that fair, he made an accusation that he was doing poorly and I called him on the lie. Is this the kind of board that allows lies to go unchallenged? His stats showed nothing of a personal nature, not URL's no names, no domain, nothing other than the fact his traffic stayed the same and his ratios got BETTER. The opposite of what he claimed.

You could have posted his ratios without the actual dollar amounts.

Mayor
Getting back on track and not mentioning the "posting of personal information" thing, some people have real problems using epassporte. Just because you want to work with them doesn't mean everyone else does. Why would you punish these people with a $5/check penalty?

?!? That's absurd but I'll happily re-post minus the dollar amount but the amount of traffic divided by the ratio multiplied by our average payout will give that anyway. Not posting his traffic would lead a person to believe that perhaps I was not giving the whole picture or his traffic was way down the last 3 months when it was STABLE. Either way, I am not going to post his numbers. Fact is he lied and I'll leave it at that.

His comments were a blatant lie and I wanted to defend my company. We work our asses off to make sure we have the best converting sites around period. You can see the pride we take in that when you go to Mayor's Money and brag that YOU even found we convert better than any other program.


I took it personally. I always do, because I pour everything into this company to make it what it is and when someone whom I've gone out of my way to take care of takes a cheap shot I get angry. I am sure you would too judging by the comment about pulling our links. Sad that you'd take the side of a newb liar over someone you've been doing business with since 1997.

Oh please...going to get into semantics huh...'was' a classy guy...wtf. Didn't say you weren't anymore...geez, you're a sensitive lil fella aren't ya.

Didn't lie about my numbers at all...they suck. The fact that they suck less now, than they did last summer doesn't mean they don't suck.

Big and tough...again, please get a grip...what I posted was far from trying to sound big and tough. It was a simple, non threatening statement of MY perception and you waltz in here, post my personal stats and proceed to call me a liar numerous times.

I was going to hit you up on ICQ to see if we could talk about this like adults before I yank my tiny amounts of traffic. Given your post, it's pretty clear you don't give a crap and would rather get into a piss fest on the board.

And now I see that you've decided to call me a liar a couple more times. I'm fuckin floored here Mayor...I honestly thought you were a pretty cool guy. We've spoken a few times on ICQ...and now...THIS |banghead|

Fuck it...I can't work with someone who calls me a liar in a public forum. Go ahead and give up that spot to someone else Mayor...feel fuckin free. I'll have your links down by later this evening. Oh, and yea...charge me the $5 and send a check for whatever payments are owed at this point.

Of all the programs, you were about the last one I would have expected to post shit like that...and it's not just the personal stats. I take great offense to being called a liar...nothing could be farther from the truth.

It's not punishment, it's a fee and it's a choice. If someone has real issues with it, they can talk to me. We're working on ACH push as well but that's going to take some time.

I didn't know that Pimp Dawg bought Mayor's Money.

Links pulled. There goes that 259 hits per year. :D

Funny Mr Yum, it's OK for you to say my program wasn't converting well for you in recent months but when I defend myself and proove you're lying about that I am suddenly I am the asshole? =

I don't know how that company ran their office, but you might need to figure in the salary (or part of) for the employee who took care of these things. 1500 Checks per period sounds like it might keep somebody pretty busy, even if it's just dealing with papercuts from licking so many envelopes.

It's my understanding that both Prodigy and Taboo check writing services charge the program $3-3.50/checks.
note: Prodigy may or may not be in business still due to the cohf circumstances, and Taboo will reduce their fees based on volume

The banking industry is not what it was 8 years ago. Nowadays they too punish people for paper checks with high fees. A check cashed on my business account costs me $1.75

There are genuinely good arguments for using a third party- timely payments rather than waiting on forgetful small program owners being the first that comes to mind. However, the program should account for these fees (or any parts beyond reasonable) in their numbers before deciding what % or pps amount to offer.

FYI:
CCBill charges .39 cents
Paycom/Epoch charges $2.00

Like I said, if would have been ok if you posted ONLY the ratios & not the dollar amounts & total clicks. That information is no one business but yours & his.

I've been meaning to suggest to Wizzo for the last 8 months that you guys might want to pull down the November 2005 stats totals.

I'm not taking the side of a "newb liar". I'm taking the side of a friend & a valued member of this board that's been working in this business since 2000.

***

Like I said in my 1st post, I was thinking that the $2 fee that most places charge was a little high & I was going to start a thread on the topic sometime this week when I had some free time. But the email about the $5 fee I got this morning made me think that I should start the thread today. It was not meant as a personal attack on your company, just the straw that broke the camel's back.

I do plan to call out some other sponsors on their fees when I get a chance, because I have a really hard time believing that it costs a company $2/check (let alone $5)

|huh

Posting someones traffic total & their conv. ratio is the same as posting how much money they make.


Just the ratios would have been sufficient to prove Mr. Yum was lying. But I can't tell if he was because GreenGuy edited the post and didn't leave just the ratios.

So there is no way for me to know.

So what was his ratio during these recent months?

Was it bad or good?

That's what the $200 Employee total was - he remembers it took a day or so (sometimes more, sometimes less) for his employee to print the checks, stuff the ednvelopes & run them thru the postage machine (no licking of enveloped for Jim's employees - lol)

So even if it took that emplyee 2 days to complete the task, you only at $0.80/check.

duh- how did I block that line out?

$200 to stuff envelopes for a day- sounds like one of those jobs offered in the back of tabloids :D

Nah...only took a day. Sparky would send me a quickbooks file, I would import it, throw the checks in a BIG printer and click print :) Susy only had to stuff the envelopes and the postage machine took care of the rest. Of course, that $200 is high by today's standards. We paid the secretary $1k/week for filtering my email and stuffing evenlopes :)