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Advice: Commission Agreement Terms (7)

03-26-2017 06:26 PM #1 mrfacebook (Member)
Advice: Commission Agreement Terms

del.

03-26-2017 06:59 PM #2 clickwork7 ()

Aside from the cap it sounds as though a large part of this offer is based on the advertiser underwriting all your ad spend.

How important is that to you?

03-26-2017 07:33 PM #3 mrfacebook (Member)

Funding is a bonus, but not a deciding factor whatsoever. I enjoy the freedom and stability of running a single converting offer without fear of hitting daily cap, but am I 'giving up' too much for that freedom?

03-29-2017 05:21 AM #4 johnaff (AMC Alumnus)

Quote Originally Posted by mrfacebook View Post
Hey STM'ers,

I'm in need of some advice regarding a business opportunity I've recently been presented with. I have been running traffic to an advertiser's nutra product for a few weeks and have been sending the (1) highest quality and (2) lowest CPA he's seen in 7 years (yay for my ego, but it's 50% luck - right?!)

I've been given an offer to work 100% commission-based on an in-house deal. I have a pretty basic contract and commission agreement he would like me to sign that I would consider unconventional from standard commission agreements.

I need your help translating the actual value and whether this lower payout and weird structure is worth the large cap (# of trials/sales per month that I can sell).

The product(s) are mostly trial-based with a few straight sales, but the host of the commission agreement is:

- advertiser will fund all campaigns and overhead costs
- 15,000/mo cap dedicated to me
- $5 payout on all trials that CONVERT to an initial purchase (someone who signs up for the free + shipping and does not cancel their trial before the initial purchase hits their CC)
- $5 payout on all trials for every residual month the purchase stays active

To give you an idea of residual value (changing #'s to respect privacy), roughly 50-80% of trials will CONVERT to a purchase (first rebill) and 30-60% of those will continue to convert month over month (auto-ship).

I've never been offered a deal that included the residual conversions and can see the long-term sustainable value, but I can't wrap my head around losing potentially half of the trials up front and only getting $5 on those, only for that number to continue to drop at a .4-.6 rate.

Am I better off sticking with standard payout 200-400% ROI at limited cap and having to swap offers out, or is the large cap worth this structure?

Part of me wants to ask for the $5 to be included for trials, not just trials that convert to a first rebill.

Any input is appreciated!
It sounds like a serious, well thought out offer which is a good sign, and the residual is most likely because they want you to stick around if the arrangement is working, since many marketers lose interest in things quickly and do their own thing.

My advice would be to judge the relationship moreso on the character, skills, intentions, and roles of the people your dealing with.

Are they marketers themselves? Are they going to try and cut you out? Why do they want you to stick around? Are they trustworthy? Can others vouch for them? Whats their track record in business?

These are all questions i would be thinking about, moreso than the monetary arrangement.

Whether the deal is fair or not can always be negotiated. The more important part is about deciding whether or not you want to work with these people.

03-30-2017 03:56 PM #5 mrfacebook (Member)

Thanks, John. That's the conclusion i've slowly been coming to myself.

You're very wise, my friend!

04-14-2017 05:03 AM #6 johnaff (AMC Alumnus)

Quote Originally Posted by mrfacebook View Post
Thanks, John. That's the conclusion i've slowly been coming to myself.

You're very wise, my friend!
what did you end up doing? why?

04-15-2017 12:34 PM #7 mrfacebook (Member)

I ended up taking the deal. Being able to do that kind of volume on 1 offer really opens up my time for other things, when i'd otherwise be sitting at my PC waiting to hit cap > swap > hit cap > swap, etc.

I was able to get the advertiser to agree to add a $5 payout on the initial trial as well, thankfully.

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