I want a part of your commission, Mr. Affiliate

Have you ever wondered why we have as many bargain web sites as we do? What makes these people wake up in the morning, sift through the internet for online shopping deals, and post them on web pages?

When I was reviewing going public Scott from OzBargainBlog commented that at this rate soon we will have more bargain sites than we have bargains. ;-)

Well, there is no magic here. The market decides how many is enough and there is a very good explanation why the websites keep coming dozen a day.

Bargain sites live off of commission

When you use a bargain site to buy stuff the owner gets an affiliate commission on the sale. This is how most of them operate and this is their bread. The commission is not big, often under 3%, however for a popular site the sales quickly add up. Fatwallet for example is building a new office in Machesney Park, IL to house the growing team of 35 employees (March 2006 data) and was nominated to Fast 50 list by the FastCompany magazine in 2006.

Here is an interesting example from my own experience. You might remember the table with Amazon Discount Shopping links I published back in January. These links retrieve products discounted up to 90% from each of the Amazon’s 28 departments. The links use my affiliate id and generate a commission each time you buy something from Amazon. Ever since I published the table that page alone has brought more revenue than all Google ads I run on my blog.

Some sites share their commission

The overall saturation of the niche produced a new type of business — rewards programs. These are proxy shopping sites who are ready to sacrifice part of their commission just to make you click on their links when you go shopping. In essence they share the commission with you by crediting your account, giving you flier miles, gift certificates or offering other perks. This is very similar to how dividend or cash back credit cards work.

I have reviewed several of the programs in the past and even compared the rewards they offer. Becky Ford at CompareRewards is doing an excellent job covering most of them and I usually resort to her blog when I need an independent opinion on a particular program.

Which of them share more commission?

The information you find in the blogs is good for general reference but shouldn’t be used to make a decision on what program to use for a particular store since the numbers will not be up to date. Rewards programs adjust the percentages all the time based on contracts they have with merchants and other market conditions.

So how can you make that educated shopping decision? This is where websites like evRewards come handy.

At ev’reward, we scour the web daily for the best shopping rewards available. Our directory includes over 14,000 rewards for over 3,000 online stores, available through more than 40 leading cash back, frequent traveler, savings reward and points programs.

In practice it looks like this. You enter the store name, evRewards will list the programs that offer rewards for shopping at this store and will compare the value each has for you in a form of a nice looking chart. Here is for example a result for Circuit City.

CircuitCity Rewards

It is clear from the table that BountyZoo gives the best cash back on things you buy from Circuit City. In addition AMEX Rewards program offers similar rewards when the points they give are converted to cash.

Make them share more commission!

As you find what program offers the best cash back go to that web site and open an account (if you don’t already have one). This (with rare exceptions) is free. All you need to do next is use the links provided by that program to complete the sale (refer to each program website for detailed instructions).

This especially works well for big ticket items like computers, cameras, and TV’s since the difference is obvious right away. Your $1500 laptop at Circuit City will cost you $45 less if you use the program above. Spend the difference to celebrate the event at your favorite stake house and have a drink to smart shopping! ;-)

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3 Responses to “I want a part of your commission, Mr. Affiliate”

  1. 1 Global Investor Feb 4th, 2007 at 6:41 am

    Bond Rewards is a good program, too. They operate like eBates, and pay you in US savings bonds. I’ve gotten up to 20% cash back on some of their programs (particularly eBay).

  2. 2 Scott Feb 4th, 2007 at 7:57 pm

    Hi Yan!

    I have just reviewed a cashback site yesterday for the Australian market that gives you back 100% of the commission, and their business model is based on fixed annual membership fee ($10AUD or $7.73USD/year). I was surprised to see how much some of the merchants are willing to pay per sale/per lead.

    Looks like even the cashback/rewards market is getting very competitive!

  3. 3 Yan Feb 4th, 2007 at 11:15 pm

    Global Investor: I like Bond Rewards too. In fact they came out the winner when I last reviewed rewards programs in November. Here is a link:

    Scott: Interesting business model. I read your review and I agree with your concerns that this company has no incentive to raise the commission rates. Big companies have huge negotiating power and I know for a fact that what FatWallet give away as cash back is sometimes what smaller sites get as their entire commission.

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