I Just saw a huge merchant mistake with some cologne I ordered through Amazon. I’m thankful this Thanksgiving that none of my clients would make a mistake like this. So, I ordered the cologne online and when the package came it had a coupon site plastered all over it along side the Merchant’s own branding. I went to the coupon site right after I saw this and sure enough it was an Affiliate site, and they were using the Merchant’s Affiliate link. Here is why this is stupid.
1. You are sending your current customers to someone who is going to charge you to send them back to you with numerous fees.
These fees include:
- Affiliate commissions
- Network fees (depending on their deal)
- Your Affiliate Manager’s salary or outsourced manager’s fees
- The actual amount of a discount the person got from the coupon code
- The lifetime loss of value in margin per customer because you gave your current customer a place to always find discount instead of shopping without the discount.
These are your current customers so you are losing tons of margin by sending them to an Affiliate site, not to mention you lose more margin on the actual coupon or discount as well.
2. If you work with coupon sites, like this merchant does, and your other coupon Affiliate partners end up finding out, guess what, they are going to pull you from their sites and not want to work with you. You are taking their loyal visitors and exposing them to their competitors sites. You may also anger content sites since you are showing their readers and followers where to go for discounts which can cause the content sites cookie to be overwritten.
3. You loose the value of a customer’s profitability potentially for life. If you would have closed the sale with customers like me who think your prices are already discounted enough, you have now given me somewhere to go before I shop with you. So instead of having a 40% margin off the sale (I’m making the 40% up) because I enjoy your service and products, you now have to pay Affiliate commissions, coupon discounts, network fees, etc… which lowers my value to you and reduces your profit margin. If the commission is 10%, my coupon is 15% and your network fee is a 20% override, you are now much less profitable and I may go to that coupon site for life so you are losing a decent amount of money by making this mistake.
Anyways, I saw this package come in from this well known merchant and was shocked. I am not going to name the Merchant or Affiliate, mainly because I don’t want a lawsuit, but I may send this post over to their Marketing team to find out what is going on and why they would do this. It’ll be interesting to hear their reasons behind doing this. If they respond I’ll update this post. Happy Thanksgiving everyone!