eBay Tosses MCM to the Curb Like a Bad Sofa
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eBay Tosses MCM to the Curb Like a Bad Sofa
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Re: eBay Tosses MCM to the Curb Like a Bad Sofa
#2Im not sure of the rates but my cofounder used to send a decent amount of traffic to ebay through the affiliate system, I actually wrote a fairly complex system in which live auctions were compared to other retailers prices.
At some point though the affiliate commission rates went from worth pursuing to not really worth it at all even though we had invested a fair amount of effort in integrating ebay.
Re: eBay Tosses MCM to the Curb Like a Bad Sofa
#3This is kind of the nature of the beast with being an affiliate. You are being compensated for providing them traffic which converts at a substantially lower cost that their predicted lifetime revenue from the customers. If those lines cross, expect to be shown the door as soon as they're made aware of that fact. It is not economical to work with people to optimize their sites to hopefully be sending quality traffic again, since that is hard, non-obvious, might be against the interests or intentions of the site owner, and consumes resources which would be better spent optimizing the customer's own sites.
For example, a slight change in your keyword mix coming from Google -- not even a bad thing -- can make your traffic quality as measured downstream go from Great! to Abysmal! very quickly. Pretend that instead of me being both an SEO and a software developer the SEO was the affiliate of the software developer in my business.
http://www.bingocardcreator.com/stats/conversion-rates
I was "sending" great, great traffic with SEO, until recently. The people who joined the free trial were disposed to convert. If I had been earning 25 cents a trial, both the SEO and the software developer would be pretty happy... until October.
What happened in October? Halloween happened. And I did fairly well SEOing for Halloween, and generated a metric truckload of new trial signups and sales... but the traffic is much lower quality than someone coming in for elementary education activities. My consolidated conversion rate took a nosedive, because the conversion rate for people coming from my Halloween sites is below 1%.
If I were paying the Halloween-loving SEO 25 cent CPAs at the moment, I'd be bleeding money and probably have to cut him, since I don't have sufficient insight into his business to realize this is a temporary condition and will rectify itself in another few days (right before it happens again at Thanksgiving... and Christmas... and Valentine's Day...).
Re: eBay Tosses MCM to the Curb Like a Bad Sofa
#4This is kind of the nature of the beast with being an affiliate. You are being compensated for providing them traffic which converts at a substantially lower cost that their predicted lifetime revenue from the customers. If those lines cross, expect to be shown the door as soon as they're made aware of that fact. It is not economical to work with people to optimize their sites to hopefully be sending quality traffic…
wow, very insightful response.
Re: eBay Tosses MCM to the Curb Like a Bad Sofa
#5This is kind of the nature of the beast with being an affiliate. You are being compensated for providing them traffic which converts at a substantially lower cost that their predicted lifetime revenue from the customers. If those lines cross, expect to be shown the door as soon as they're made aware of that fact. It is not economical to work with people to optimize their sites to hopefully be sending quality traffic…
I have a dumb question, and maybe it's because I don't understand how ebay affiliate stuff works. (Assuming Amazon-esque.)
But even if this site sends really low quality traffic, it's still likely sales that wouldn't otherwise happen, even if the ratio of visits to sales is quite low.
What does this cost ebay other than a lil more server juice? (to have a fruitless visit).
I mean, I know they're paying a cut to MCM, but they would pay that cut with good quality traffic, too.
It seems their gamble on false positives would not be as risky with other set-ups (paying out for downloads, trials, etc).
(If anybody wants to school me on incorrect ebay assumptions, that would be OK. I'm assuming it's basically like Amazon.)
[update: Reread. The author says he gets commission based on a variety of things including "clicks, new accounts, bids, and wins." It seems that this whole dynamic could be clear for both sides if ebay only paid out on things that ended up getting bought.]
Re: eBay Tosses MCM to the Curb Like a Bad Sofa
#6The real conclusion to me is that you should not base your business on some other big business that gets a major say in whether or not you live or die.
Try to gain traction independent of google, ebay, facebook or whatever it out there that you could base your business on. Treat them like the icing on your cake, nice to have but not the crucial element in your bottom line which if you lose it will kill your business overnight.
Of course, if it works it is easy money, but once you grow a bit, maybe have a couple of employees it suddenly starts to look like a highwire act.
Unless of course you've got an in with some big name VC that also happens to invest in google to protect you from being cut off.
Better keep your independence as much as you can.
Re: eBay Tosses MCM to the Curb Like a Bad Sofa
#7Damnit, I love MCM. One of the nicest designed sites out there.
Re: eBay Tosses MCM to the Curb Like a Bad Sofa
#8This is kind of the nature of the beast with being an affiliate. You are being compensated for providing them traffic which converts at a substantially lower cost that their predicted lifetime revenue from the customers. If those lines cross, expect to be shown the door as soon as they're made aware of that fact. It is not economical to work with people to optimize their sites to hopefully be sending quality traffic…
I have a dumb question, and maybe it's because I don't understand how ebay affiliate stuff works. (Assuming Amazon-esque.) But even if this site sends really low quality traffic, it's still likely sales that wouldn't otherwise happen, even if the ratio of visits to sales is quite low. What does this cost ebay other than a lil more server juice? (to have a fruitless visit). I mean, I know they're paying a cut to MCM,…
Affiliates typically work on a CPA basis: cost per action. eBay is a little trickier, but it boils down to that. They get paid based on conversions, not based on traffic.
Most people who sell via affiliates have what is called a backend. (BCC does not.). It means, loosely speaking, any way for the company to increase LTV [edit: life time value, total economic value extracted from customer over the entirety of your relationship with them] after the initial sale, which is typically when the affiliate gets compensated. eBay LTVs are dominated by he backend: I bought my first box of Warhammer figures for $20 and earned eBay a buck back in 2000. Over the last ten years, I have been worth north of $2000 to eBay.
It is very difficult to know with certainty that the LTV of the kid buying the Warhammer figures is going to hit four figures because in a few short years he is going to move to Japan then drop off your radar for a few years then sell a hundred thousand dollars of bingo card software using his Paypal account.
So you need to guesstimate LTV for customers, within 30 or 60 or so days of acquisition, to pay your affiliates. If you underpay, they send you less traffic and you lose. You probably pay your affiliates more than the instant revenue. If eBay figured my LTV was $1 and paid the affiliate 50 cents, they would have sent me to another site instead. If Netflix paid only the first month's revenue, they'd lose signups to other sites.
If you overpay, you hemmorage money.
So you get really, really sophisticated about measuring and predicting LTV. You understand your business better than any affiliate can hope to. And when the numbers predict red ink? You drop them like a bad habit.
Re: eBay Tosses MCM to the Curb Like a Bad Sofa
#9The real conclusion to me is that you should not base your business on some other big business that gets a major say in whether or not you live or die. Try to gain traction independent of google, ebay, facebook or whatever it out there that you could base your business on. Treat them like the icing on your cake, nice to have but not the crucial element in your bottom line which if you lose it will kill your business…
[deleted]
Re: eBay Tosses MCM to the Curb Like a Bad Sofa
#10Earlier quoted context omitted.
I have a dumb question, and maybe it's because I don't understand how ebay affiliate stuff works. (Assuming Amazon-esque.) But even if this site sends really low quality traffic, it's still likely sales that wouldn't otherwise happen, even if the ratio of visits to sales is quite low. What does this cost ebay other than a lil more server juice? (to have a fruitless visit). I mean, I know they're paying a cut to MCM,…
Affiliates typically work on a CPA basis: cost per action. eBay is a little trickier, but it boils down to that. They get paid based on conversions, not based on traffic. Most people who sell via affiliates have what is called a backend. (BCC does not.). It means, loosely speaking, any way for the company to increase LTV [edit: life time value, total economic value extracted from customer over the entirety of your re…
What is LTV?