Web Marketing Cafe

Affiliate Marketing for B2B third party trading website

2009-07-31T15:33:00.000+08:00

We are planning to aunch our affiliate program on Commission Junction (CJ) soon. According to our previous experience in Google Affiliate Network and Shareasale, I would like to talk about a few factors that need to be carefully considered for a B2B third-party trading website when launching affiliate program.

The fisrt factor that may limit the performance of our affiliate program is that not many publishers target the B2B wholesale area in the affiliate atmosphere. It is true that about 80% websites that we in-coporated with were B2C-based, most buyer's purchasing capability driven from these publishers are limited and not interested in bulk purchase. Further implications of this fact is that these publishers tend to understand how to attract individual consumers but got very narrow marketing mediums or ideas about bringing in business purchasers, which requires some input from our side. We may, however, even suggest that a certain web page or advertising space to be customized designed in order to adapt to our B2B kind banner ad.

The second element is the commission structure. Our website acts like a third party and only collect commission from buyers after their products have been sold. The nature of this type of business model brings the fact that percentage-based commission will not be favouable. Think about it, we get only about 12% commission from the total amount generated from a buyer's order, the 12% is the total money we earned and then how much we can distribute to our publishers will bring strong impact on our profit margin.

For now we will stick with pay-per-lead for out affiliate program, which means that commission will be made based on each sign up.

DHgate review: facts about buying on the site

2009-03-24T15:18:00.001+08:00

As an online B2B wholesale marketplace,DHgate has recently gained far-ranging attention from online buyers all over the world for the low prices of products sold. Buyers from other countries can buy goods at great prices from Chinese providers via the marketplace. The company was established early in 2004 and is now the most important account of PayPal in Asia.

If you want to buy merchandise from the platform or want to make clear some interrogation concerning the reliability to buy on the platform, here are some facts about DHgate for your reference:

DHgate review 1. Before purchasing: Why there are voices such as “DHgate spams” or “DHgate frauds”?

DHgate is quite similar to platforms such as eBay. The difference is that the providers on DHgate are all Chinese and the products sold on DHgate are comparatively lower than other websites. However recently some accusations such as “DHgate frauds” or “DHgate fakes” have been made against the company.

In point of fact, DHgate only acts as the third party in transaction and helps relieve a variety of possible difficulties purchasers confront during transaction. DHgate does NOT sell any merchandise itself.

They have a seller evaluation system, which is an essential reference for buyers, especially those new buyers who do business on the site for the first time. When purchasing an item from a seller, do check the seller’s credibility presented by feedback scores. It is dangerous to purchase items from sellers with not good records.

To clear off counterfeits, DHgate has set some regulations to restrict sellers’ sales behavior. And a committee is established for auditing the sellers’ behavior on the website. The company has banned many stores recently to sweep out counterfeit goods. There will be severe punishment given to those improper behaviors. In reality, there is a very high threshold (the seller should submit his license, identity and other credentials for evaluation) for an applicant to register as a seller. If the seller’s store is banned because of his wrong behaviors, the seller have a great trouble, and will have a great difficulty to re-register the site.

DHgate review 2. After buying the products: Just in case that the products I purchased are counterfeits…

Sellers on the site are required to give accurate description of the products they sell. However, sometimes, the merchandise are not exactly as described.

The marketplace has a safe payment service which is named as Escrow. It first hold the money the seller paid for an item and release it to the seller until the buyer has examined the items he received and confirmed that they are OK.

It also supports payment methods such as PayPal.

The website acts as the third party throughout the transaction process. There is customer service staff giving the members some guide. In the event that something wrong happens to the transaction, for example the items are not exactly as the seller had described, or delivery delay, etc., the buyer can open a dispute or come to customer service group for help. Some standard work-flows to process common disputes already exist. Usually, a buyer just need to follow the steps and solve the problems all by himself. If the dispute is tough to resolve, the purchaser can escalate the dispute to customer service group. They coordinate the relationship between sellers and buyers, gives specific suggestions, and makes unprepossessed arbitration based upon the real situation

Affiliate marketing commission reviewed

2009-03-10T11:04:00.006+08:00

The flat rate commission has been applied for about 4 months now and it looks ok in terms of brining in new buyers to our site.

Some of our publishers did not seem to get used to the tiered structure we offer on Google Affiliate Network. We used to break the sales order amount into different levels and assign a certain percentage of commission to each level. On top of that, the commission paid to each level will be different based on the type of the buyer, i.e new buyer or old buyer. For example, for sales above $500, if it was placed by a new buyer, we give publishers 3%, if that's an old buyer, then it would be 1.5% . While such structure can provide experienced publishers with enough guide regarding on which field they should focus in order to drive the most revenues based on their own capabilities, some new recruits got largely confused in our partnership.

Now for the flat rate commission, which offers fixed 3% sales commission to all publisher and an extra $10 to those bringing new buyers, the image is clear for publishers and also makes us (as a merchant) easily develops a non-confusing customized offering to our hard-working publishers. This means that we can increase either the sales commission rate or the fixed amount given for generating publishers for some top-performing publishers. In additon, I must submit that the general enquires about our commission structure from publishers seem to have dropped, which allows us to pay more attentions to other key elements in our affiliate program.

Wei

Commission Structure Updated

2008-11-25T20:37:00.005+08:00

I have finally finished the update of our commission structure. It has been changed from a tiered structure back to a flat rate again, but this time the difference is that we can add an extra fixed amount of money to those who bring in new buyers.

The reason behind such initiative is easy to understand, that is, to drive in more new buyers. When a company has an efficient clients service team, the focus on continuous growth in sales amount by using affiliate channels seems not to be aligned well with a company's expansion in a highly competitive market. Usually the accumulated sales figure has been largely contributed by old buyer who repeatably use coupons or other promotional incentives. In this case, affiliate should play an offensive role rather than a defensive one.

Although having been advised that separating new buyers and old buyers is not a common practice, I believe that the strategic focus of a company is the determining factor. A website's affiliate program is often a good reflection of the company's attitude towards its market.

A chat with Performics

2008-11-07T10:32:00.004+08:00

I was glad to have a nice chat through Webex with Chris and Jamie from Double Click Performics, now known as the Google Affiliate Network. I have been looking for such a good opportunity to have a closer contact with them. It appeares to me that a chat on the phone can really help us reslove some issues quickly. Several things were addressed, inlcuding the change in our commission structure, the overview of affiliates in North America etc. Some questions can be easily answered on the phone rather than sending each other e-mails. This helps us gain a better understanding of the affiliate climate in our targeted market.

Thanks, Chris, Jamie, and Webex :)

Should merchants provide brand flexibility to publishers

2008-10-22T17:28:00.003+08:00

Today's topic is rather interesting as this is the dilemma faced by many merchants.

Should I maintain strict control over the use of my brand and trademarks?

Strategy 1:
"No." Allow brand flexibility; extend full brand usage rights.

Pros:

* Empowered publishers will find many ways to drive conversions
* Maximum brand reach online

Cons:

* Risk of brand abuse when undesirable content frames your brand
* Altering of creative and destination URLs in ways that are inconsistent with your brand

Brand flexibility is good for advertisers who:

* Have sufficient resources for monitoring and branding education
* Have stringent publisher acceptance criteria
* Are looking to aggressively increase consumer acquisitions online
* Are looking to significantly increase the number of publishers in their program
* Are less sensitive to issues relating to usage of name, image and likeness

Strategy 2:
"Yes." Maintain brand sensitivity and control or limit usage of my trademarks.

Pros:

* Consistent brand message across all channels
* Protection of established image and brand messages

Cons:

* Loss of potential revenue from publishers who know how to convert
* Potential loss of paid search page real estate (to competitors or resellers)
* Brand control is good for advertisers who:
* Have a well-established brand and significant investment in brand positioning
* Have a brand requiring a very specific context for proper promotion, or may have contractual obligations to manufacturers from whom they license products
* Have marketing activities in multiple channels requiring coordination for consistency

How Your Brand Fuels Your Bank Account

If you are prepared to offer support to minimize branding abuse, it would be recommended that you allow publishers to use your brand and trademark materials to drive traffic and increase your return on investment (ROI).

Instead of excessive brand control, we suggest you shift your focus to monitoring and education to prevent brand misuse. Treat your publishers like an online sales force. If they are well-trained and have the right collateral and best practices to promote within the scope of your brand requirements, they can effectively market your program to consumers.

On the other hand, if you choose a strategy of tight control over your brand, you should use consistent promotions across all channels to reduce channel conflict; use the same offers and creative on your Web site, in stores, and in your affiliate marketing channel.

Because publishers typically misuse branded material only when they feel they are provided with insufficient tools, we suggest you compensate for strict usage terms by offering ample creative and tools. Provide enough links, options, and even data feeds (especially if you are a retailer) to support creative publishers. Also, think of boosting your commission payouts or incentives, because strict promotion rules can generate higher lifetime value traffic, which is worth additional compensation.

General introduction to Affiliate Marketing

2008-10-20T13:58:00.006+08:00

Affiliate marketing is one of the most powerful ways to make money online today. There are plenty of affiliate marketing tips out there that will jump start your way into making over 6 figures a year just by selling other merchants products. If you do not know what affiliate marketing is, please let me explain. Affiliate marketing is when you sell someone else's product or service for a commission. You can sell someone else's product or service through your affiliate marketing website or through paid advertising. The e-commerce pionner The e-commerce pionner Amazon.comis probably the first one that put this concept into practice. There are different ways for you to earn your commission:

Cost per click (CPC) - When a visitor clicks on the merchant advertisement and the affiliate get paid by per click.

Cost per lead (CPL) - Affiliate will get paid when the lead generated.

Cost per sale (CPS) - Affiliate will get paid when the sale generated (Maximum Earning Program)

Success in affiliate programs is not easy, affiliate marketing requires extremely hard work. There are many affiliate marketing help message boards around that will answer any questions regarding affiliate marketing that you may have. Once you find the right affiliate marketing niche, it is easy sailing from there.

You will need the following to be a successful affiliate marketer:

1. A Niche Affiliate Marketing Product-You need to find a product potential customer's NEED, not WANT. Your job is to bring the customer to the sales page and make them NEED the product and not just WANT it. Many customers see products all the time they want, but convincing them they NEED the product will lead to a affiliate marketing sale of up to 75%.

2. A Website- Now you do not need a high cost website, just something basic and neat. The purpose of your website is to offer some sort of review page, reviewing the affiliate marketing product of your choice. You need to show potential customers the benefits of your affiliate marketing product and why they need it.

3. Set up Paid Advertising- Go to Google and click on the AdWords section. You need to bid on keywords your potential customer will search for when searching for your affiliate marketing product. You don't want to spend to much money here and you may not need paid advertising, but it truly does help and lead to sales.

4. Article Writing-It's FREE! You need to write as many articles as you can inserting keywords on each article. You need to submit them to EzineArticles. I suggest you submit 50+ articles on any affiliate marketing product you choose.

Affiliate marketing can be one of the most profitable and low start-up costs businesses out there. There is nothing that compares to the benefits affiliate marketing can bring. In less than 4 hours, you can have a product that is already making sales with NO start-up costs.

Google Affiliate Network needs some improvement

2008-10-14T22:07:00.008+08:00

As an affiliate specialist who is in charge of the entire company's affiliate program, I have always tried hard to focus my energy on the issues that requires my attention most. We have been on Performics , now known as Google Affiliate Network for a long time. Having been acquired by Google, the Performics interface has not changed as quick as I expected. I have noticed some areas that really need to be improved.

First, sending nicely designed newsletters has always been one of our most important methods to keep in touch with our hard-working publishers. However, I have not seen the possibility of sending HTML format letters directly from Performic's interface. This made me have to pass the newletters to our EDM team to finish, which requires extra time to be invested in scheduling the timetable of affiliate newsletter.

Secondly, sending coupons codes or launching any bonus campagins is also time-consuming. With a relatively large number of publishers in hand, I have to send coupons through e-mail message to inform a selected group of publishers to confirm. However, not every publisher is lucky enough to get the coupon, for that I apologize. By contrast, Shareasale has launched a new "Post your coupons and deals" function to make the whole process more cost-effective. Coupons now can be uploaded to Sharasale's interface and we can decide whether all publishers will get the coupon or some of them will.

Despite the problems mentioned above, however, I am still confident about Google Affiliate Network and is looking forward to see any possible improvements made. The tracking system has been accurate and it is one feature that we would recommend other merchants to try. The report provides both generic and detailed data that shows how each publisher or even each banner link perform within a period of time.

As a company based in China, we hope to apply many low cost methods to assist and communicate with our publishers. Maybe merchants in the US do not feel the same way as I do because they can make phone-calls to contact publishers anytime they want or even have a face-to-face meeting. For us, however, a well-developed interface with lots of functions to choose is vital to the quality of our affiliate program. Even if we can make international phone-calls, the time difference still brings a little challenge :)

Business & IT alignment and Competitive Advantage

2008-09-18T10:22:00.004+08:00

I have recently been contacted my former colleagues with whom I worked in a Motorola authorized reseller in China. My first placement there was to implement an ERP system and I was told that they were getting more and more used to it. While still remembering the frustrations and resistiance we all shared, this makes me want to introduce some thoughts about the use of information technology in modern organizations.

The term "alignment" usually can be explained as a smooth integration between two or more than two things. The motivation behind pursuing effective business-IT alignment is probably the great challenge faced by companies in the 21st century. Michael Porter (1985) suggested that a firm’s competitiveness ultimately falls into cost advantage, differentiation and focus. Firms pursuing the focus on both low cost and differentiation will face a dilemma. However, it is arguably true that many firms have achieved both through smooth business-IT alignment. For example, Amazon.com, the largest online book retailer, uses data mining technologies and the Web to delivery low price books while offering personalized features for customers.

Advantages created by technologies also raise the question of being either technological leadership or follower. Earl(1998) suggested that: ”The firm that pursues a strategy of being an IT follower may be able to improve considerably on the design of a predecessor’s system and, with fourth-generation productivity tools, might do so in short order.” However, there have been tons of online retailers who tried to create uniqueness by following the Amazon model but yet not quite successful. Porter (1985) also indicated: “Firms tend to view technological leadership primarily as a vehicle for achieving differentiation, while acting as a follower is considered the approach to achieving low cost.” This answer suggests the success of utilising technologies to drive business must depend on a firm’s understanding of its position in an industry, which corresponds to Porter’s five-force analysis.

On the other hand, companies tightly aligning business with IT may neither improve competitiveness nor reduce it or it could distract a firm from achieving competitive advantage. Davenport (1998) indicated that the failure the enterprise systems in Apple computer did not affect its competitiveness because of its strong brand and unique operating system. He also warned that companies that compete on cost may lose the initial advantage because of implementing costly ERP applications.

The complexity of ERP applications in today’s enterprises may also make the usefulness of the alignment model questionable. eweek (2003) reported that increased strategic alignment could be harmful if it restricts IT infrastructure flexibility. For example, Dell’s implementation of SAP conflicted with its flexible business model because the standardized application prevented regional managers from responding to their local markets. Problems become even more complicated when considering ERP implementation in a different cultural context. Xue (2003) argued that the unique Chinese culture could dramatically cause unpredictable under-performance of Western ERP systems and cultural issues should be tackled first when introducing ERP to Chinese enterprises.

Google's hard move in North East Asia

2008-09-11T12:12:00.000+08:00

I remember reading lots of academic articles discussing the standardization vs customization of a product or service when global firms entry a foreign market. Although most of the articles I have come across focus on the traditional marketing field, this kind of notion is taking place more and more heavily in those relying the Web to survive and expand. A report from Business Week has caught my attention, the report talked about how the South Korean search engine-Naver, owned by NHN (http://www.nhncorp.com/), took over Google in the Korean market. NHN’s strategy was not too difficult to understand, targeting the key weakness of Google, which is its poor performance of looking for abundant Web documents in Korean. NHN executives made concerted efforts to create their own content and build up Naver's database with partnerships with content owners. To keep its edge, NHN blocked rivals from accessing the trove. To a great extent, such move stopped Google showing relevant results appealing to local users.

The report reminds me of the search engine atmosphere in China, where Google is having a hard time getting its China strategy to Baidu.com. The Chinese search engine owns more than 58% of China's Internet search market, compared with less than 25% for Google. The reason is simple, just like how NHN won the market in South Korea, most Chinese and Korean people do not feel that they can get more quality information in their own native language from Google. It is not surprising to see that most of my family relatives and friends use Baidu much more often.

The search engine giant has to face the reality: its dominance in northeast Asia is weak. However, Google is still trying to customize its service in order to make it more appealing to the local market. One effective way is to develop strategic alliances. Google now has a revenue-sharing partnership with Tianya, a Chinese social-networking site. In addition, big portals like SINA.com China.com all have integrated Google search into their website, so that visitors have more channels to put their search terms in Google’s search engine. Would it be successful on its way to isolate Baidu? We’ll see.

You can find the report I read on Business Week from here:

http://www.businessweek.com/globalbiz/content/sep2008/gb2008095_505433.htm

Something interesting about Lenovo's ordering system

2008-09-05T21:48:00.010+08:00

I don't suppose if most of my friends have got the similar experience. On Tuesday, 2nd of Sep, I was sitting in front of my computer and checking Lenovo's Canadian website. I was tempted to click on the offer shown on the homepage, after that I noticed that all the Thinkpad laptops were priced as $0, which was a big surprise. Being out of interest, I went further with a few more clicks and then I found most additional services and software and accessories were also free. Unfortunately I do not live in Canada so I could not register an account, which is required to place the order. Surely this was a mistake, probably because of the system update during that time. I also know that even if the order was being placed, it would have been rejected by Lenovo anyway.

The reason I am mentioning here is that because a similar case happed in Jan this year. I can still remember that it was Lenovo's US website and the well-known Thinkpad T61 was priced as $224. As a result all the buyers who tried to take avantage of that error were all turned down by a letter from Lenovo to inform them that orders got cancelled.

Although Lenovo is a Chinese company and I myself is a Chinese consumer, I am not the first person who would argue about Lenovo's service quality and I also often heared about the dealy of delivery before. I think it still has lots to learn in the global market. By constrast, when IBM made the same mistake by pricing something (I cannot remember the name, maybe an optical drive) for $1 only on the website, the company delivered every single product to its buyer rather than sending a letter to cancel the order. Maybe Lenovo is considering making profit as a more important subject than building its brand. Anyway, let's just wish it will not keep making more mistakes like this.

Communication is the key

2008-09-01T20:42:00.003+08:00

Communication, just like the important role it plays in the field of traditional marketing, has a great deal of impact on the web marketing as well. Recently our company has removed a range of replica products and punshied their sellers. Thanks to the effective and time-efficient e-mail sent to every publisher, we hardely received any complaints from publishers. Here I would also like to thank their kind co-operations.

Despite this, there still have been some publishers who showed excellent performance in the past month. We found that communicating with them brought some surprises. For example, one of the TOP 10 publishers I contacted not only answered my question regarding how he prompted our banner link, he also mentioned some of our competitors' commision policy. That's some extra surprise. However, I am not arguing that copying from your competitor is a good practice, since every company has its own strategic focus, e.g. acquiring new buyer or retaining old buyer. This will all be reflected by every company's affiliate program policy.

For every affiliate marketing specialist, part of the success depends on how you can overcome the sense of insecure and unfamiliarity between you, as a merchant and your publishers, in this virtual world. Do not just rely on those fancy web tools to develop your affiliate program, the root of long-term success usually relies on something rather basic and simple :)

Wei

From Google Adwords to Affiliate Marketing

2008-08-27T15:14:00.004+08:00

Welcome to the blog and it's a pleasure to share my ideas with you from today.

Recently I am lucky enough to find a position at DHgate.com, after working for Google Adwords' biggest authorised reseller, China Enterprise (CE) DongLi. My experience in CE Dong Li was rather interesting, being a Google Adwords Consultant there, I witnessed a variety of perspectives about Google Adwords as well as attitudes toward online marketing. Some were great, but some were rather ridiculous. However, this is largely because of the poor company culture of CE DongLi, sales people there are the asset and they use all kinds of methods to sell, sell and sell so they can keep getting commissions. This brought a large customer group in which no one is really suited to use Google Adwords to advertise.

The Chinese e-commerce development has not got a long history. Most Chinese enterprises are just trying to copy the style of their western counterparts. The quality of using the Internet to develop businesses, both domesticly and globally, is significantly impacted by people's education and income level across different geographical areas. While enterprises in Shanghai often have established well-presented website and integrate online advertising into their marketing strategy and public relations, you will find those from less developed areas have very narrow ideas about utilizing Google Adwords.

One of the cases I experienced was that a local shoe manufacturer complained about the ineffective of Google Adwords, simply because there was no order received. The truth was that no visitors were allowed to see the product photos on the landing page unless they go through a boring process to register as a member. The purpose. according to the owner, was to prevent their commerical secrets from being stolen by their competitors......

Now jumping from Adwords into the affiliate marketing in a B2B platform company, I feel even more challenging to help our Chinese suppliers to successfully introduce their products to the West. Of course, I think the company is certainly more professional than a Google's reseller regarding how to create a win-win relationship between Western buyers and Chinese sellers.