Affiliate marketing: who we work with and why

27 January, 2012 Online

Affiliate marketing is an integral part of our marketing strategy, but it’s often one that confuses customers and our suppliers. In short: affiliate marketing, for us, is where external sites refer customers to our site for a portion of the sale value (never more than 3%).

Of course, we’re very particular about who we work with as the customer experience is so crucial to the success of all our businesses and we are very cautious about how we are being represented on external sites.

Who we work with

At present we work very closely with the leading Australian CSEs (Comparison Shopping Engines) like Getprice.com.au and MyShopping.com.au as well as other product-focused sites like ProductReview.com.au. These sites allow consumers to compare prices across various suppliers, as well as collecting reviews about the different stores. As we have a high customer-satisfaction rate, a fantastic perception in the market and offer a best-price guarantee, these kinds of sites work well for us.

It’s also important to us that our customers are able to leave reviews on third-party sites like these: it allows us to refine our service, while the high ratings are great for our market perception!

The other sites we work with on affiliate relationships are niche-specific sites: content-driven portals sharing content about cooking, appliances, home renovation or anything else specific to us. These kinds of sites are more likely to use generic Appliances Online or Big Brown Box links or banners, rather than pricing and links to specific products.

Who we don’t work with

Recently we’ve been approached by several marketplace sites looking to partner with us. One that stands out is Zanui.com.au – an aggregator of products and suppliers with one key difference to other affiliates: they own the pre- and post-sale communications, the checkout/transaction process and the delivery of products. This means that we, as a merchant, would have little or no interaction with the customer.

Zanui’s site’s been launched by Rocket Internet, an aggressive German venture capital group that move into new markets and launch several products at once. They’ve grown rapidly in the last few months in Australia – launching four sites and hiring hundreds of new staff.

We’ve seen many startups like this before: they move heavily into the market and sell to merchants on the premise that if they don’t take up a property on their marketplace as a supplier, their competitors will. In this case, our competitors will undoubtedly start selling their products through Zanui, but we’re not concerned.

We believe that we’re large enough to stand-alone in the industry now, and don’t feel intimidated by considerable marketing budgets of other groups or new players for several reasons:

  1. We will always own our pre- and post-sale communication, the transaction process and the delivery: it’s the only way we can continue to promise the highest levels of service possible.
  2. Competitors that do take up opportunities on marketplace sites like this are most likely not as concerned about service and the customer experience as we are, so we don’t see them as a threat to our core business offering.
  3. Selling through marketplace sites only dilutes our brand and confuses the customer: we’re confident about who we are as a company and as individuals, and we won’t risk altering how we’re perceived in the market.
  4. Partner relationships like these have the potential to upset suppliers, who are just as important to us as our customers and staff.

More specific to Zanui: we’re a family business and a business going from 1 to hundreds of staff in a few months isn’t likely to maintain a strong work culture or ethic, which will undoubtedly carry-over to their service. That’s not what we’re about.

I wouldn’t usually name a specific company in this way, but after meeting with Zanui I thought it was appropriate to state why our businesses won’t be partnering with them or other marketplace sites, especially as they claim to be moving so heavily into the market. We wish them all the best and will be keeping a close eye on this space this year.

6 Responses to “Affiliate marketing: who we work with and why”

  1. [...] is an abridged chronicle of a mainstay creatively featured during winning.com.au. John Winning is a CEO of Appliances Online and Big Brown [...]

  2. Kamotoru says:

    I agree, communication with customers has great value and giving it to third party is not beneficial for online store.

  3. scotty says:

    Interesting insight on Zanui — I have actually never come across the site. You mentioned that they are launching 4 sites in Australia — what are they?

  4. Rimson99 says:

    The Iconic is coming aggressively with the Aussie Affiliate Networks as well. I know they are on CM but they are also moving onto Commission Factory now as well.

  5. Tracy says:

    Thanks for the article. We were approached too and I now have a better understanding of what we would be getting ourselves into. I agree with all your comments re service standards and customer interaction. Unfortunately they are the big guns through and will definitely take a large chunk of the market, but sometimes you just have to remember why you got in business in the first place and stick with it.

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