Playing Around With Commission November 5th, 2005 12:56 am

Play.com have made changes to their affiliate program and from next week are offering affiliates just 2% commission on all sales (probably barring consoles which I believe don’t get commission anyway). Cynical affiliates may wonder about the timing of this change after all the Christmas sales rush is starting to get underway. Me? I’m not cynical and am happy to listen to their reasoning.

I always thought an affiliate program, like Amazon, HMV, Marks and Spencer and other retailers was based on commission on sales. An affiliate refers a sale! As well as a sale the merchant take details and provided they offer first class service and excellent value for money they should also acquire a loyal customer who in turn will tell their friends and colleagues how wonderful it is to shop there! The merchant makes the sale, a transaction occurs and the profits are distributed - The merchant pays the affiliate and everyone’s happy….

… apparently not with Play.com! Apparently Play.com cannot afford to pay more than 2% commission due to the cost of customer acquisition! So an affiliate makes a sale, but if it has cost Play.com a few ££ to get that customer they’re on a loser… but how can that be? The process is simplified “sell item” - “pay partners” isn’t it?

Maybe I’m taking just a simplistic view of this and admittedly I can’t fathom the reasoning or logic behind the customer acquistion argument. But, it’s Play.com’s decision and they know what’s best for their business. If I had a crystal ball I’d look in to it now and once the mist had cleared I’d predict that come early 2006 an announcement about the program closing will be made leaving a lot more affiliates annoyed than this announcement has tooooooooo (say in Mystic Meg voice for better effect)!

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