Processing Fees

[nekrom]

Some programs deduct the processing fee from the affiliate payout % and others absorb it from their own %, so the affiliate gets a clean % split.

-N

[Chop Smith]

A couple of years ago, I was pondering the same question so I did some research. I lost the exact numbers in a hard drive crash but maybe this will help some.

1. Most affiliates of a program thinks of a 50/50 split as a true 50% of gross. So if the subscription is $30 then they are expecting $15
2. If you advertise 50/50 and pay them on gross net of processing then you would be paying about 42.5% of gross.
3. You could advertise a 60/40 split and hide the fact that you are going to pay based on gross less processing and in dollars be at about the same amount as a true 50/50 split.

If I could give you the numbers, it would amaze you at how many choose the third approach. I chose to do number 1. I rather pay the extra $2.17 to my affiliates and never have my honesty questioned. Further, I consider my affiliates true partners and treat them equally. For example, lets say Mr Big Link List says I will promote your sites if you will pay 60% of gross. If I agreed to his terms, I would immediately charge my webmasters' site to say "we pay everyone a true 60% of gross".

I reread this reply and it smells like a can of .

[SirMoby]

Originally Posted by Chop Smith

I reread this reply and it smells like a can of .

We love you any way.

[Simon]

Originally Posted by Chop Smith

3. You could advertise a 60/40 split and hide the fact that you are going to pay based on gross less processing and in dollars be at about the same amount as a true 50/50 split.

I've always looked at that as "penciling the deal" and I never like it when someone tries to do that to me. Anytime I have to check the TOS to be sure how I'll be paid, and find something like that, it turns me off to the program.

I agree with Chop that #1 is a better way, although I take a little different stance on incentive pay. We pay out 50% to 70% of gross, with the sliding percentage based on how many signups someone can generate. If some Mr. Big would like a higher payout on his account, I don't have any reservations about setting his account that way from the start. Of course, I don't have reservations about asking for more traffic and more orders later on, if I don't see that the account is performing like we all thought it would.

I'd like to treat all partners the same, and I try to when it comes to helping them. Usually the Mr Bigs don't need the same help and hand-holding that some of our smaller accounts do. Anytime we can help a smaller webmaster start earning at a higher percentage, I think that's a good thing.

One other thing to check on, SpeedyG, is whether the program will be charging you back for anything. We don't do that, but there are also some programs that will take money from you for things like chargebacks from surfers.

Like anything else, it's a case of webmaster beware.

[[BV]]

[quote=Simon]One other thing to check on, SpeedyG, is whether the program will be charging you back for anything. We don't do that, but there are also some programs that will take money from you for things like chargebacks from surfers.QUOTE]




That is pretty standard for programs using 3rd party processing such as all CCBill & Paycom revshare sites. Nothing shady in that practise.

In fact after looking at your site in your sig (Fetish Club) you are using CCBill so in fact if you have a charge back or a refund by a customer and that is an affiliate sale, the affiliate is going to have money deducted from his account.

So in fact you do do that (Take money back from affiliates for CB's. and refunds)

Someone correct me if I am wrong.

[Simon]

[quote='[BV]']

Originally Posted by Simon

One other thing to check on, SpeedyG, is whether the program will be charging you back for anything. We don't do that, but there are also some programs that will take money from you for things like chargebacks from surfers.QUOTE]
That is pretty standard for programs using 3rd party processing such as all CCBill & Paycom revshare sites. Nothing shady in that practise.

In fact after looking at your site in your sig (Fetish Club) you are using CCBill so in fact if you have a charge back or a refund by a customer and that is an affiliate sale, the affiliate is going to have money deducted from his account.

So in fact you do do that (Take money back from affiliates for CB's. and refunds)

Someone correct me if I am wrong.

Exactly right, BV, I was less than clear in that statement. Of course if someone gets a signup and that person charges back their order, then CCBill does take the money back at the same percentage it was paid out. What I meant to say is that some programs (but not CCBill ones) will charge you a fee for chargebacks.

We don't have any control over the chargebacks being deducted by CCBill, and you're right in that that's how all chargebacks are handled by them.

Speaking of CCBill, their admin section does allow the sponsor to set cookies to expire in 1 day, it allows a sponsor to stop paying after a certain number of rebills, and it allows the sponsor to split the processing fees with affiliates.

So make sure you verify how your sponsors have those things set in their programs. Just fyi, we use the longest possible cookie setting (255 days I think), we pay all rebills forever, and we pay all fees from our end.