Instant Split Commissions – A Good Deal?
Recently, I was approached by someone who wanted me to sell his product as an affiliate. He tried to sweeten the deal by offering “instant split commissions” through PayPal. I’d heard of this before, but never gave it much thought until someone offered it to me. After considering, I said I’d check out his product, but I wouldn’t accept the instant split commissions.
He seemed surprised that I was refusing to be paid the minute the customer made the purchase.
The way these programs work is that the customer makes the payment an equal payment to two PayPal accounts (the merchants and the affiliates). Thus, as an affiliate, you get your commissions right away. Sounds good, doesn’t it?
Not so much to me. First of all, if a customer is paying me, I am responsible for the sale. I may have to deal with PayPal complaints if there is a problem with the service or I may have customers contacting me directly for support. I’m just an affiliate – I don’t need to deal with that.
Second, if a merchant is paying commissions via PayPal, I expect them to use the “mass pay” feature where I don’t pay any fees for receiving the money. The instant payment option will suck up a LOT of your commissions in PayPal fees.
And let’s look at this from the merchant’s point of view. Certainly he saves time in trying to send affiliate payments (but if he’s paying by PayPal and his affiliate script supports Mass Pay file formats – it only takes a few minutes to pay out affiliates). This system might also motivate affiliates when they want to get payments right away. Why promote a program that pays in a month when you can get paid now, right?
But honestly, as an affiliate manager, my star affiliates aren’t the people who need cash right away. They are usually people who earn a consistent income with affiliate programs and are happy to wait for a big fat juicy affiliate payment once per month.
And what about refunds? I wouldn’t even want to go there. If you refund the money, you have to get your affiliate to refund the other portion. I imagine that could be quite a headache.
I think I’m staying clear of this one.
About: Alice Seba
Alice Seba earns a full-time online income as an entrepreneur and loves to help others achieve the same. With a focus on using content to create relationships, loyalty and results from the written word, she co-owns both a ghostwriting service and a private label content business. To get more tips for your content marketing, visit Contentrix.com - your free resource with plenty of tips and strategies.Freebies
Business WorkbookEssential Biz Notes
Free Resources
Learn to Sell More
Learn to Earn More
Lynn Terry
I feel the same way about split commissions, Alice – it’s the number one turn off for me as an affiliate. I wont even promote the programs that are set up that way.
-Lynn
Miles Baker
You make several great points! I will be steering clear of this option as an affiliate as well. Although it’s motivating to get money in your account every day immdiately when you make a sale, with the headaches and responsiblities of split payments I don’t think it’s worth it.
martin avis
I totally agree with you. I will not promote anything that uses such a silly system.
You made some excellent points – and several that I hadn’t thought of. For example, it hadn’t occurred to me that both parties could be construed as ‘the vendor’ and so could be held responsible for customer service! Ouch!
Martin
Scott Gingrich
I totally agree…I only want Affiliates for my book “Piggy Bank Websites” who are stable enough to plan on receiving their commissions on a regular monthly basis…if someone’s that starving for money, I suspect the validity of the sale. Good points.
Web2earn
Thanks for a nice view on split commissions and I have to say that this is a real tunr off for an affiliate program. So why do you think so many affiliates still go with this?
Michael
Web2earn.com – online moneymaking opportunities
make money on eBay
Thanks Alice
You just saved me a huge headache it seems. That brings light on an idea for a product review site. “Products to stay clear of” … any takers? I’d be interested in visiting such a site.
Can you suggest a good affiliate management software/product?
Anonymous
Good points.
Still would consider trying it before ruling it out completely.
Lawyer website design and marketing