DVD.co.uk telling their customers that they are too expensive!
I read on the A4U forum today that DVD.co.uk have a big ad on their Xbox 360 page that says Its cheaper from Amazon, click here. Yes thats right they are telling their visitors to buy a product from one of their competitors as its cheaper! OK, they are sending them via an affiliate link but still, what’s all that about?
As I can see it there are 2 issues, the business model and how this will affect affiliates.
The Business Model
Can you imaging walking into Dixons in your local high street with £300 in your pocket looking to buy a brand new XBox 360. You go over to the display and a big sign tells you that its £20 cheaper in Comet down the road! Where would you buy it from? And chances are I would never go back to Dixons again as obviously Comet will always be cheaper if even Dixons say so!
OK its a little different online as the user will click on DVD.co.uk’s Amazon affiliate link and DVD.co.uk will make £7 commission, as electronics are capped at £7. But what does it do their brand? Surely any potential DVD.co.uk customer will see this and next time go straight to Amazon as they must always be cheaper if DVD.co.uk say so.
And I’m well aware that margins may be tight on a popular product such as the Xbox 360 as a lot of retailers will be cutting margins to the bone in order to get people into their “shop”. But surely they can play with the price a bit and earn more than the £7 they would make from Amazon? I can honestly say I’ve never seen anything as bizarre as this since Gerald Ratner announced that the jewelry in his stores was cheap tat.
Affiliates
So how does this affect affiliates? Well if we send customers to DVD.co.uk and then lose them via a DVD.co.uk Amazon affiliate link we obviously lose the commission. I for one will be removing my DVD.co.uk affiliate links ASAP, its as simple as that. We don’t have to lose sales to merchants who do this sort of thing, there are plenty of other merchants in the same sector.
What I’m listening to right now: Rell - “Last Ride”
Sunday, November 6th, 2005 at 1:52 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
Welcome to my blog. My name is Kieron Donoghue and I run UK Offer Media Ltd. I thought it would be fun to post a daily (well hopefully daily) blog, writing about my experiences in Internet Marketing and more specifically Affiliate Marketing. I'll include some personal stuff too, probably about my other passions, music and cars. Please feel free to post your comments and thoughts too.
November 12th, 2005 at 3:24 am
Yeah, the DVD.co.uk business model puzzles me also. I was trying to get my head round it this morning in the shower, but cannot see how this amazon affiliate system can benefit them in the long term.
It would be nice to know their ideas behind this.