Comments on: Toys R Us saga continues – their response to console fiasco and how they can fix it

By: David Fiske

David Fiske — Sat, 08 Dec 2007 21:47:35 +0000

To me, affiliate programs are there to encourage sales. We are marketing the merchants and trying to generate sales. In return, we are rewarded with commissions. It doesn’t make sense to then select which products to reward affiliates for. It’s not our fault the numbers don’t add up so why should we be penalised? Keep affiliates happy and make a loss if needs be as merchants will make their money back on other lines.

This issue is like a bad smell and I’m sure it will be the same all over again next year.

By: MarkM

MarkM — Fri, 07 Dec 2007 03:08:01 +0000

I haven’t been promoting Toys-r-us, yet, but, did I read that correctly in their communication, no PPC ?

By: Lee McCoy

Lee McCoy — Tue, 04 Dec 2007 13:05:44 +0000

I also agree with Toys R Us. It’s pure economics. They don’t have to incentivise products they could sell very easily. It just doesn’t make sense for them.

Its important not to view affiliate marketing in isolation. We are just one channel that competes for budget. And its crucial to remember that merchants will not only look at the returns when choosing a channel (or setting it’s budget) but how easy it is to work with that channel.

Electronic items, as you know, is a competitive industry which obviously pushes prices down as retailers vie for sales.

The same pressure apply to the commission rate that merchants offer. Big brands don’t offer as high commissions because they’ve already invested in their brand. That brand not only helps convert sales better, but also works to attract affiliates as they look at this converting merchants as a “sure fire winner” in the competition for affiliate’s space on their websites / budgets for PPC.

I think its naive to ignore the competitive pressures on merchants costs and what commission rates they can afford and assert that merchants that aren’t identical to offer the same commission rates regardless brand and operating costs.

Just my 2.5p as well.

By: Joff

Joff — Tue, 04 Dec 2007 09:04:22 +0000

Surely the retailers are missing a trick here?

I managed to pick up a couple of Wii’s on Amazon the other week for RRP (and shoved them on eBay) but why should unscrupulous consumers like me be the one to profit from high demand items?

Instead, retailers need to increase their prices to meet demand – pricing out all of those trying to make a few quid on eBay. Why shouldn’t retailers make the extra money? After all, their infrastructure is under additional strain due to the rise in “is it in stock yet” phone calls, emails, website traffic, etc.

I know the likes of Nintendo, Sony, etc can “suggest” retailers sell for RRP but that’s only where price cutting is concerned. There’s nothing to stop the retailers from hiking up price as demand increases.

My 2 1/2p’s worth.

By: Mr Daz

Mr Daz — Tue, 04 Dec 2007 08:55:13 +0000

I agree with that, Toys R Us are my biggest converting merchant on my UK Transformers website yet they offer the lowest commissions. A small increase in commission rates from them would make huge waves for me at least.

By: mark

mark — Tue, 04 Dec 2007 08:44:00 +0000

I have to say that having read their comments I’m actually more sympathetic than I was before. Margins are tight and if something sells out immediately without promoting it then great.

I also agree with your suggestion that overall commissions are too low and rather than look at each category now they should save that review for after Christmas and even if just from a goodwill perspective, they should raise their overall commssions through Dec & Jan.