(upbeat music) - Hey there and welcome to the Bringing Business to Retail Podcast. If you're looking to get more sales, more customers, master your marketing, and ultimately, take control of your retail or e-commerce business, then you're in the right place. I'm Selena Knight, a retail growth strategist and multi-award-winning store owner, whose superpower is uncovering exactly what your business requires to move to the next level. I'll provide you with the strategies, the tools, and the insight you need to scale your store. All you need to do is take action. Ready to get started? (upbeat music) It is always a great conversation when I talk to someone who's been around since what I like to call the beginning of e-com. Now, for those of you who aren't veterans, that's kind of the early 2000s. And today's guest, Zane McIntyre, who co-founded the commission factory, understands firsthand how we mostly communicated and made sales inside of forums. I know we're like slipping back to communities and things, but that is where e-commerce started out. And the other place that we made sales and bought things was from blogs. Do you remember those days, Zane? I remember them very well, 'cause I was one of those bloggers. So tell me, how did you end up in e-com? I always laugh about the fact that I'm doing a job now that didn't exist when I was in school. Like, I didn't, in school, it wasn't like, "Ooh, I want to be an e-commerce strategist "because there was no such thing." And I remember when I first met you, I'm pretty sure one of the first things I said was, "Oh my God, you guys have been around for ages." Yeah, that's right. Every now and again, I feel old and I think I felt old at that point too. It has been, what, 13 years that I've been running commission factory or since we founded it. But I guess, yeah, my time either with affiliate marketing and e-coms of goes back a lot further as well. From being a shopper, I was, let's say, my original craft was actually a graphic designer. And so I always been sort of in digital in some fashion. And then as I was a graphic designer, I felt like, you know what, this internet thing might be. It might be big. - It might be a thing. - It might be a thing. And so I started dabbling in that area originally whilst I was still a graphic designer. And so I had all these technical skills that I just sort of naturally inherited. From being a millennial, you know, kind of I grew up as technology was progressing and just kind of learn as you go. And so I did start a content blog around, I think it was men's fashion actually at that time. So I started it just outside of the GFC. And when, and I was looking at men's, I think designer underwear specifically because of like they say the lipstick effect where nobody had a great deal of disposable income at that time, but they would spend a larger amount on these smaller purchases that made them feel good about themselves. At that time, men's designer underwear was kind of a newish thing, you know, beyond bonds underwear that all guys had. Now they're all these brands. - I'm gonna say, when I first met my husband which was in the end of 2003, I was, I'm a TIDAS and I was astounded that he was buying Calvin Klein underwear. Like nowadays it's so dear to you. But back then, they were like $40 a pair. And I was like, oh gosh, you're so fancy. - That's right. I mean, they would see, you know, that very gorgeous looking male model on the box of the underwear. And so they thought, well, I can't spend big right now. So, but I want to look like that. Maybe that underwear will make me look like that. And so, so that was the whole, you know, appeal and allure of the men's designer underwear where guys maybe weren't feeling so great about themselves, but then they could buy this designer underwear and feel good about themselves. So, so I certainly exploited that just after the GFC. And that was my first, first blog was, you know, yeah, men's designer underwear. And it went really, really well. And yeah, I got, I made a name for myself doing that. I incorporated the affiliate marketing side of things. And, and eventually I replaced my graphic designer in common and I moved to doing it full time. How much, how much, this, I didn't know this. So my mind is just like, the first thing I'm thinking is, how much designer underwear was there back then? And did you go on by at all? Or were people giving it to you pre? Remember, this is pre-influencer days. - Yeah, yeah, that's right. So I guess it would be one of the OGs then, you know, before all the, all the influencer stuff, right? I mean, I didn't have an Instagram account. I didn't. - Because Instagram didn't exist. - No, it didn't exist. Twitter was barely a thing. I remember first getting into that and saying, oh, maybe I should get into Twitter as well. But yeah, I was given so many samples of, of designer underwear. Like there was some stuff that was sent to me like, yeah, I'm not wearing that. I'm not trying that on. Oh, just a little too elaborate from... - Were you taking pictures, were you taking pictures of yourself? - There would be pictures and because the internet is forever, they would still be out there somewhere, but most of them will never have my face in them. I mean, obviously that's not where I'm wearing underwears on my face. But still, you know, I never, never put the two together with the lower half of the body with the top half so that then, you know, I guess one day I thought, well, I don't know, maybe I'll go into politics one day and I don't really want to do this. Like, well, prove that was me. Prove that to me. - The four-site you had back then. - That's right, exactly. I learned very early on the internet is forever. So I never took anything that was too compromising. - I love that. I know for me, you mentioned the GFC and I know for me as a retailer, I was always looking at ways to diversify my income stream. And probably because I am a tight-ass and I am very focused on money and it was the GFC, which I don't even think we realized back in the day because this was, you know, 2007-ish, 2006, 2007. But I had no previous background in retail. I had a business degree, which I discovered, helped me in no way shape or form to run my own business. And the sales that I made before I opened my store were all done in parenting forums. And now that I am older and wiser, I know that I can look back and see that when I opened my store, what I did instinctively as a way of helping my customers was being able to identify what my customers needed and then finding people who could help them. So whether it was pediatric first aid classes or in a relationship with an interior stylist to help them create the perfect kids bedroom, the fact that I was listening to my customers and going, "Oh, look, I can't help you designer. "We have beautiful things, "but I can't help you style a kid's nursery, "but I'll go and find you someone." And what I didn't realize back then was I should have been making money out of this whole referral marketing or affiliate marketing and I never got it right for years. And I remember that someone said to me, "Oh, how much of a referral fit, "'cause that's what we call it back then, "how much referral fee do you get "for all of these things that you're doing?" And I'm like, "What do you mean?" No, I just do it to help my customers and be a nice person. And I think it was just a chamber of commerce meeting and someone was like, "No, no, no, "we pay you referral fees for that." So you need to be asking for referral fees. And that was probably my first foray into what we now call influencers, but also that kind of referral fee, affiliate marketing kind of world. And then it's one of those things, it's like when you see the yellow car, you get the new car and you see the yellow car everywhere, I started to see on blogs, sign up to be an affiliate. I'm like, "Oh, what's this affiliate thing?" And I remember back in the day, back in the day, we are so old, back in the day, signing up to be an affiliate for some digital resources for parents. And I'm gonna be honest, I didn't make an awful lot of money out of it because I never really put the effort in. But what I do remember is everyone used commission factory for said program, which is why when I met you, I was like, "Oh my God, "you guys have been around for ages." And so, I guess my question to you is, how have you seen affiliate marketing change over the last nearly two decades? - Mm-hmm, I mean, yeah, it's definitely changed a lot. I mean, it kind of started with, I guess, Amazon. I think they absorbed, I think it was CD now at the time. And obviously, the adult industry as well, one of the pioneers, as they do tend to be, when it comes to any new technology, the adult industry is always at the forefront. It's like, they were the decider between VHS or Betamax, and they were the decider between Blu-ray and HD DVD. - I did not know that. - Yeah, yeah, it was the porn industry. That was the decider between those, all those technologies. - Oh my gosh! (laughs) - That's right, so when HD DVD and Blu-ray, we know we're gonna fight it out. The, yeah, the adult industry decided to go on Blu-ray, and that's who won out in the end. So HD DVD went away. - Okay, I'm gonna go out on a limb here and say, "I don't know how the adult industry used or users "affiliate marketing." So back in the day, how did they use affiliate marketing? - There were generally after leads and signups for a lot of their sites. I mean, whatever, I can't recall, whatever would have been that came before, like the likes of like Pornhub and those sorts of sites. So they were just basically wanting to get customers to their sites and sign up, and putting your credit card in. And obviously in those days too, people were a little bit more hesitant about putting credit cards into websites as well. So it had to come from trustworthy sources or referrals as well. And so there were people out there who maybe had blogs or they were on forums discussing like adult toys and gifts, and so then they're referring people off to additional resources, we'll say. And people trusted those first versions of the influencers, right? So they were then referring people off to these adult sites to sign up, and they were getting commissions for that. How it worked back then, it would have been each to their own. So these adult sites would have had their own version of affiliate marketing or some sort of tracking software in place, which are now all kind of consolidated into companies such as us, or there'll be network, affiliate networks that are purely based on the adult industry as well, and facilitating all of that. So you don't have to maintain and update software yourself now. You just use the third party. But yeah, so it was those original influencers coming through from forums and blogs and chat services as well that were referring people. So yeah, your initial foray as a referral source, that's what they were doing too for the porn industry. - My people were pregnant, I don't know that they needed that, but that's okay, because what we were doing, we were finding the mummy bloggers and things like that. So they had great resources. I didn't have the time and energy to create that stuff, but I knew that my customers needed it. And hey, if I was gonna get a few dollars in the process, that's a win-win. - Of course. - What I realize now is if I could go back again, I probably, no, no, I probably, I would have put a lot more effort into building those relationships and building that income stream. Because whilst we did get our biggest thing that we got money for a lot of referral fees or affiliate fees from was pediatric first aid classes. So we had a company that would come that we met. And then sometimes they would start off at the beginning to do the classes in our shop, but then they got so popular that they would just find their space and we would just sell tickets for them. And so we would keep, I think it was maybe 20%. So that was like $20 for every ticket. And it was a really nice, warm and fuzzy feeling. And I think the rise of the influencer has taken away that warm and fuzzy feeling, I think, for a lot of businesses. But as I said, if I was going back again. - Does the feel is authentic anymore? - It doesn't, and again, when the influencer thing became a thing, everyone was so on board because it exactly what you just said. It had that trust and it had that authenticity and it had the kudos of, oh, they used this product and they, oh, I want to be like that. Just like the Calvin Klein models. And now we all know it's just paid a play. Like the more you pay these people, the more they're going to talk about it. - Absolutely. - But going back, I would have put a lot more time and energy and resources into making this an income stream for my retail and e-commerce business. So given that you get to see every single day, the amount of sales that businesses can make, what kind of revenue can a retail or e-commerce store make if they do affiliate marketing well? - So what they make, I mean, obviously is going to be reliant on what they do and what they're selling, but traditionally what we make up for them in terms of their revenue is it's about the 15 to 20% of their revenue, so that can be us. Now that will fluctuate depending on who it is, but obviously we get a sense of, you know, what we contribute to an advertiser or a brand's revenues as well because, you know, we're obviously tracking sales and matching up. We're like, okay, well, this affiliate said this sale, so that's commission there. So, but we see about 20%. And, you know, that obviously gives some leverage to us as well, like, you know, if people are wanting to either not do affiliate marketing anymore or they're trying to cut costs, like, okay, but, you know, you could also lose 20% of your revenue. So, you know, by cutting that. And then it's also how they value what the affiliates contribute to them too, which is always an important topic. So, there will be those who, you know, who want to adjust commission rates and look at things like, oh, but if this customer was already one of my customers, but an affiliate sent this traffic and they bought, they're already my customer. They bought for me before. Why am I paying a commission? So, well, just because they're in your database, doesn't mean they're on hundreds of others. So, no one is truly your customer. You know, you've got to convince them all the time to come back to you because it's just so easy, right? You're on the internet and you're buying. There isn't a great deal of brand loyalty that exists now. It's either going to be price-based or just how your current mood as well. So, you're just like, oh, I'm just going to go here. I don't feel like shopping around. So, you're the first thing you buy. But if the affiliates were responsible for that, there's value in that. And so, we do look at how, you know, people can customize commissioner rates and get the most value from their program as well. So, they're not paying out unnecessarily. But, yeah, return customers or new customers. There's value in both of those. And not to say that, you know, I'm not all these people that will save, you know, Amazon's evil or anything like that. It's more so like, yeah, but any sale that didn't end up on Amazon, isn't that a bonus for you? - You said something really important there, which was, and I want everybody to pay attention to this. You talked about, should I be paying somebody else whether it's an affiliate, whether it's Google ads, whether it's Facebook ads, you know, feeling ripped off when you're paying someone to get your own customer back. But I look at it probably a lot like you do, which is maybe they wouldn't have actually bought if that ad didn't come up, if that affiliate didn't actually talk about your product, because there's a good chance that if they were gonna buy the product from you in the first place, then they would have just bought it from you, but-- - Exactly. - Something or someone else to convince them that they needed to buy, so. - That's right, you needed that influence in the conversion path somewhere to push them to you. And so, yeah, exactly, if they already bought from you, they know your website, they would go straight to you. But the fact that there is something else involved in the conversion path means that they weren't entirely convinced to just go straight to you. They did a Google search, or they did something else there to sort of direct you back, or direct the customer back to. - Which means that a couple of things, we could look at it pragmatically and say, you know, there are gaps in your marketing, like if you weren't top of mind for your customer when they weren't searching for that thing, there's potentially a hole in the bucket that you need to fill, but also just that you just did it. Then the trust is using affiliates, it generally comes with that recommendation of, I've tried this thing, or I've used this thing, or my friend used this thing. Or, you know what, these people sent me this thing, and I tried it out, and I really liked it. So it's that firsthand information. I'm gonna say I am not very good, and it's probably the marketer in me, but I'm not very good at going to those clearly aggregated sites, where you type in, what is the best webcam? And it's just ripped off sort of Amazon reviews, and you're just like, I'm not paying you money for this, I want firsthand information, like I will go and find the tech geek who actually gives me the review, and I'll give him my affiliate money. - Yeah, yeah, absolutely, absolutely. And sometimes people already know what product they want, they just want to further validation. Or to be convinced that little bit more. I think I did the same thing recently with the slow cooker. When I was buying one, I don't know, I just slow cooker before. So I found, you know, one of the, it was actually, I think it was a mummy blog, and they had said, well, look, here are five slow cookers that we've reviewed, and we've listed like one to five, like best to worst. And, you know, at least the one I was already thinking of getting in only because it was in my, you know, sort of trademark blue color that I wanted it anyways. And then it came out the best, like, good. Okay, that's all I needed to know. You've got it all. - That's all I needed to press the buy button. - Exactly, exactly. So, I'd already made a decision, but I just wanted a little bit more, you know, verification or validation for that decision. So, that was the push. - Yeah, and I think we underestimate validation. Like, I was looking, I just bought, I've just moved into a new house, and I need to deck out my home office. And I'm not 100% sure what I want it to look like, but I went and finally bought like a sideboard, sort of storage cup of thing. It's very, very pretty. But I was reading the reviews. And every single review was, this is amazing, but the doors were a bitch to put on. And I'm like, you people are not clearly not me. Like, I can use a drill and I can make like, I'm just gonna buy it, knowing that there's a very good chance, I'm gonna have to put some extra time into putting the hinges towards. - Yeah, that's right. You know what you're getting into, right? You can't-- - I just needed the validation. I just needed the validation of, it looks beautiful. It refuses a whole different conversation. - Yeah. - But then there's, oh, sorry, you got-- - Oh, I was gonna say, let's go back to 20%, yeah, 15 to 20% of your revenue is insane, realistically. Like, that is a huge difference to a business when it comes to revenue flow. Can all businesses afford to use affiliate marketing? I think, before I go there, just let's put a pin in that. Do you reckon we've done a very good job of explaining what affiliate marketing is? I've just kind of glossed over it, but I feel like we've given enough examples that hopefully-- - I guess that we have, and probably one of the pitfalls I have is that I've been in this industry for so long. I have this assumption that everybody knows how it works. I mean, I think until very recently, my parents may be only have just learned what it is I do for a living. I think because it was confusing, they assumed that I was probably doing porn and now they realize that maybe that's not what Zane does, actually, but affiliate marketing is essentially that digitized version of a referral marketing. Telling someone, hey, go buy this from there, and then that person says, oh, thank you for sending that customer to me. I'm gonna give you a bit of a commission or a bit of a kickback for sending that customer to me. And so that's essentially what affiliate marketing is. And so, I mean, we, Commission Factory, as an affiliate network, we're a middleman between those two parties, between the affiliates who want to promote a brand or earn commissions for their referrals and the brands and sales who want people to talk about them. And so, the benefit that the brands get from affiliate marketing is that it isn't paying for clicks or impressions, it's paying for actual tangible sales. So it's not eyes on the page, it's tangible sales. So, another term that had been used a lot, but we don't hear it as much these days, it's calling it performance marketing. Because if our affiliates don't generate sales for you, you don't pay anything. And so that was-- - Which is the difference between influencer marketing, 'cause I'm gonna ask you this question, the difference between influencer marketing and affiliate marketing, because you can have both at the same time. And-- - Yeah. - The difference between, correct me if I'm wrong, the difference between using an affiliate, an affiliate, an affiliate, sir. - Maybe it's a new term. - Oh, the difference between using an influencer is you're paying for them to do the post to use your product regardless of whether you get results or not. Whereas affiliate marketing, you only pay if you get the sale. - Absolutely, that is one of the biggest difference. And I mean, especially when influencer was kind of new, like some of those tenancy fees to actually be re-promoted by an influencer could have been astronomical, and also depended on their audience. That kind, that sort of shifted a lot more these days because the bigger the audience, the less authenticity they seem to have. And so we've found that brands are enjoying working more with these micro-influences, 10,000 or less followers, because they're getting better value from it, because the influencers have a smaller audience, but they haven't got so big that they're now completely seen as inauthentic. - Yeah, they're still really steep. They're still like a real person. - That's right, and they're working hard for that money as well, 'cause they want people to pay them for tendencies. But I mean, mixing the two together has become quite common now, where the influencers will generally still expect some sort of a tenancy fee or a placement fee. But now they're not commanding as much or as higher fee, because they might try and take some of the risk with you as well. So you pay the risk by actually paying for a tenancy. But now they're taking some of the risks by saying, but we also want to earn commissions on the sales that we send to you. So if they generate no sales and they get nothing from you more than the tenancy that you've already paid, but they could also do an absolute ton of sales for you as well. And so they're taking a risk there. They could do very well, or they could do very poorly out of the situation. So, and I think that advertisers or brands actually appreciate that, where there's this vested interest in it succeeding and both taking a little risk on either side. - I like that, because I feel like if someone said to me, yes, for this small amount of money, I'll put your post out, but I want to make money on the back end. They're going to put the effort. You feel as a retailer or as a product brand that they're going to put the effort in, because the more money you make, the more money they make. - Yeah, that's right. And it could be validating for you as well, because if they also can look at your brand or your products that you sell, and they don't believe in it, or they don't think it's right fit for their audience, they probably won't take you on. And it will, at least in that manner, it might just be no, no, we're charging this flat rate and that's it. So that for you as a brand might also be a signal that, if an influencer who's in my space isn't, doesn't seem to believe that my product and my brand will resonate with their audience, do I also need to do a little more research and development into my brand or my product or my positioning to appeal more to them? Because that person is my target demographic, but they're not very, they don't seem to believe in me. - But they're not convinced, yeah. - Yeah. - So if we can go and take the pin back out of the question I asked you earlier, thank you so much for that, which is, this feels like it's too good to be true. You know, increasing our revenue by 15 to 20% could mean hundreds of thousands of dollars for the people listening. Can they afford this? Can, is it something that every person listening can go, you know what, I'm gonna bring that into my marketing suite? - I think the affordability is certainly there for this industry. What can be the problem is the expectations as well. So the expectations that some have, especially a smaller brand new to market as well, is that it's flicking your switch and you're suddenly making millions of dollars. That's not it at all. It takes time. You know, you've gotta build your brand, you've gotta build that trust as well. And affiliates could send all the traffic in the world to your website. But if your website can't convert that traffic, it will have no effect. And so affiliates too will stop promoting you and sending traffic to you because their motivation is to earn commissions, they're sending you this traffic. And if it doesn't convert, they have no motivation to continue. And so it can be a very sort of fluctuating type channel, but it can take time. And so when you're new to channel, when it comes to affiliate marketing, and affiliates that never worked with you before, there can be a ramp up period of anywhere from like six to 12 months depending on your brand. And, but still the affordability is that. And so when it comes to companies like ourselves, like we do have some level like monthly fee, portion two to what we do. And whether, and that can be sort of siloed out into just the technology if you just wanna do it yourself. And then we have a service component as well, if you needed some help or you wanted a dedicated account manager. Those fees aren't enormous because we would make more if you're successful 'cause we take a clip on the commissions being paid out. Oh, well, it gets added to it. So if you are successful, that's our vested interest. So we take this more monthly fee. And that's obviously for everything else that we're doing. We're obviously building the technology. We're doing updates. We offer... - You're a business as well. You have to make money. - We're a business and you have to make money. And in the early days when we first started, we were purely performance only. So essentially this whole channel could have been absolutely free if you didn't perform. Because we take you on. We charged absolutely nothing except for the performance fee. And if your program didn't perform or you were paying fairly unreasonable commission rates, we weren't making much either. And so that did shift in the last few years that we have to like, well, we have to make money as well to obviously keep the lights on and keep servicing our customers. But yeah, it scales as you scale. And I think that's one of the things that people can appreciate with this channel. And unlike working with like a Meta or Google, it is a channel where we are far more approachable and negotiable as well. Whereas the other guys, the price is the price. If you don't wanna pay it, you don't play. - And you don't even know what the price is sometimes before you jump into it. You just like, here's some money, crossing my fingers and hoping. - Exactly, exactly. So, you know, we have that ability in this channel to sort of fluctuate, you know, with you. And also we want your affiliate program to be sustainable and long-term as well. And so when it comes to how you might grow your program, of course, we're there to offer some support and advice where it might be, oh, what sort of commission rate should I offer as well? And so based on the category that you're in, the safety in the fashion vertical, we would say, look, the average commission rate in the fashion vertical sits at about 10%. And so you can choose where you wanna go from there. You know, but what is sustainable long-term for you as a brand? If 10% is too much, then maybe you can go a bit lower, but just note that affiliates will still start to look at, you know, who's offering the highest commission rates. And so if you're up against a really big name in, let's say, in the fashion vertical, and they're paying 8%, I would say as a smaller brand, I wouldn't just match that. You'd probably have to go a bit higher 'cause you're trying to convince the affiliates to also promote you, you're an untested brand for them. - Yeah, whereas they can go with a bigger brand, almost guaranteed that they're gonna make money out of it. - Exactly, exactly. So you've gotta convince them, you know, a little bit. But yeah, it is some relationship building in there too, 'cause the affiliates are either individuals or they're companies, they're not algorithms. So they're actual people behind it too. And so we provide a means for these two parties to communicate as well and talk, so that they can work things out together or, you know, inviting an affiliate to your program too. So you'd say, well, this is what we're offering. This is our product. I'm the account manager for this, and they can develop a relationship there. And so despite, you know, maybe a lower commission rate, you know, affiliates will also work with you because they like you. - Oh, and isn't that the world in general though? We really like to work with people that we like. - Exactly, exactly. So it is a people business. It very much is that. And that's why we talk about sustainability when it comes to your affiliate program and the commissions that you're paying to affiliates. Because the last thing you wanna do is start off, you know, with a 15% commission rate. And then in three months, you decide, oh, this is kind of unsustainable for us. You know, it's really eroding our margins here. So we're gonna drop this down to seven and a half percent. I mean, the affiliates are an extension of your sales team, essentially. And so if you actually ever went to your salesperson and said, oh, actually we're dropping your commissions by half, how motivated do you think they're going to be to continue promoting you? - Or even turning up. - Or even turning up, that's right, exactly. And so, and it's the same for the affiliates. One minute, they're at 15% and they're doing really well for you. And then you turn around and say, oh, actually, we're halving it. Guess whose links they're gonna remove from this side. - Yeah. And I think what we have to take away from that as well is there are very few people listening who don't have competitors. And so if you start being a douche, they're just gonna go to one of your competitors and say, look, I've been being an affiliate for this company. They're not very nice to work with. Like, what do you wanna do for me? - Yeah, exactly. Exactly. It is very rare that you'd be the only person doing what you do. And so, an affiliate marketing is relatively prolific. So, your competitors might actually already work with us. So that's a whole comparison that we will be able to make. It's like, well, your competitors paying this. Or they're gonna be on a competing network to us as well. And so, I think the, out of the top 100 retailers in Australia, I think there are only 20 now that maybe don't have an affiliate program. - Really? - So, that's right. So, most of them do in some fashion. Others don't have a program either because their margins don't allow for it. And so, one of the trickiest categories that we've worked with in the past and can be hard to convince. Those that exclusive sell a lot of like, let's say, white goods and electronics, their margins are sold. - I was gonna jump in and say, is it electronics? - Yeah, yeah. The margins are so low. And also when they are resellers for the likes of Apple, their margins there are just next to nothing. And so, they won't even pay commissions if you referred someone who bought an Apple product because there is no margin on it for them. So, they only use the Apple products that they sell as a way to get people in store, most of the time. And hopefully we'll buy other products. But yeah, so that industry really struggles with this 'cause there's just no margins. And there's sort of commissioner rates that they could be paying to someone. And not always that attractive. Like we're talking anywhere from, you know, 0.5% commission. And so, for some affiliates, like, "Oh God, we'd have to sell a lot to get something out of that." - But then you also have to think about, I guess those products are generally a much higher AOV. So it might be a $4,000 fridge versus a $50 piece of fashion. And so, whilst the actual rate might be smaller, the amount that they're bringing in could end up being higher. - It absolutely could be. And I think that that might just be a kind of purer way that some affiliates might look at this as well. And say, "Oh, well, if I only sold one fridge a month, "is that enough?" And so, but I want to sell 20 fridge a month. Like, "Well, maybe you will. "Maybe you will, depends how popular your blog is "or how big your audience is." - Yeah, can we just go back? You said something really important. I've just written a note down to go back, is if I'm hearing you correctly, what you didn't explicitly say but implied was to make affiliate marketing work, you need to have a strategy, and you need to have resources. And I took that from when you were talking about being able to know what your competitors' commissions are, because that's not always obvious. Being able to know what the average is being your vertical on each, being able to reverse engineer what you can afford to pay, being able to look at an affiliate and decide whether they're the right person for you. So, what I'd be correct in saying, if you wanted to make affiliate marketing work, this is not a quick fix, 'cause you said it can take some time with the ramp-up period. You can't just go into this going, "I'm gonna list my product on Commission Factory "and all the money's gonna come in." - That's right. - You need a strategy. You do need a strategy, it is a long-term play, and it's not set and forget. It does require some input from you. And when we get asked often from new customers, how much time is this gonna take me? It's kind of like, well, it kind of depends on you, what time we've got available. - How much money do you wanna make? - How much money do you wanna make? And there's a big difference between the owner of a company, who's their SME, as we know, is business owners, there's a point where you have to do everything yourself, and so your time is finite. And so you can look at it and say, "Okay, I really only have an hour a week." And we'd probably say, "Look, that might be okay." Or if you were aiming for 30 minutes a day to just go in and do things such as, having a look at affiliates who've applied to your program, 'cause that is obviously one great way to start, which we know that some people don't go and do, I guess, quick enough and consistently enough is actually approving affiliates to promote you, 'cause sometimes they'll have hundreds of them sitting in there. They've shown an interest in your product or your brand, and you haven't even approved them to start promoting. And so you probably missed them at a time when they felt motivated. They saw your brand in our marketplace and they're like, "Oh, I wanna promote that." And then two or three weeks later, you approve them, if not longer, and they're like, "Oh, well, I was gonna write an article." But no. - Or even? Do I really wanna work with someone who takes two to three weeks to say yes to me making them money? - Yeah, exactly, so that's usually one key thing we bring up to be. It's like, just to prove the affiliates as at the bare minimum, that is a good start. Now, we obviously give all of our brands like full control over this sort of thing, so they can look at who's applied to their program, and they can decide if this is a good video, is this where I want my brand to be? We give them that ability. There are others, though, who do wanna be a little more hands-off with that particular process, and they go into it and say, "I will assume everyone is good until they prove me otherwise." And it's just different qualities of affiliates. I mean, we have a vetting process ourselves, where we're certain affiliates are not allowed on the network, and we review how they're gonna promote you and that sort of thing. So, obviously, no pornographic material, no hate speech, nothing like that coming through. So, advertisers can do that, but some will just say, "Look, "everybody is innocent until proven guilty. "I'll just auto-approve everyone "until, unless I see something I don't like," which is, "Oh, I came from this sort. "I don't like this article." Or, "I don't like this part of their website," which may be a little bit more adult-ish, or a little bit more political aligned and controversial. So, you might say, "Ah, I don't really wanna work." 'Cause I'd feel it anymore, and you can. You can obviously start working with them at that time. - So, I have a quick question. Sir, you just, I don't know the answer to this, but you just said, "Some people may have 100 people "wanting to be an affiliate for their product." How long should you keep an affiliate? Because my brain, and I'm happy to be proven wrong here, my brain is kind of like, "You know what? "I can have 100 people on this list, "but if they're not actively bringing in customers, "why am I putting the energy into creating promotions "or creating some content "or putting out a marketing schedule "and communicating that "if they're not gonna do anything about it?" So, I would love your aspect of that, because as we've been talking, I'm thinking, "Maybe I'm not 100% right here. "Maybe you just mentioned, you know, "someone was gonna write an article." So, maybe they only be an affiliate for your company, like once a year. Like, what is the-- - Well, I mean, the links are there forever, you know, especially if it's a content sign. So, for as long as though you're active with us, or you're active with that affiliate, that link will always redirect through to your site. So, that's one of the consequences, I guess, when people do shut these sorts of things down, like an affiliate program, for example, is all the links that were built to your site from those affiliates also break. So, they're no longer gonna be directing through to you. So, when it comes to how long to work with an affiliate, it's really just like, "Well, is it of consequence "to just still have them as part of your program?" I mean, 'cause some of them honestly just take a while as well, because they might start, you know, or sign up to your program, and then it could be six months later that they fully ramp things up, because an opportunity has come up, where they're like, "Okay, I've got a good opportunity now "to push this brand." And so, it could be right away, or it could be down the track. Then there are obviously different types of affiliates too. And so, a lot of consumers will never know that we exist, 'cause we, as Commission Factory, we are behind the scenes and we're B2B. But we also power a lot of other services that are out there. So, let's say you as a brand would love to be featured on some of the Cashback websites, whether it's like Cash Rewards or Shopback, that's us powering that. So, that's how you get Cashback is through, is us paying commissions to Cashback or Shop, sorry, so Cash Rewards all Shopback, and then they pay that Commission out to their consumers. So, that's how Cashback is working. So, when you're shopping through Cashback sites, we're powering all that. So, maybe it's just that you wanna get featured on them. Not as often, but the airline malls as well. We are powering a lot of that, whether it's for their general for Qantas. So, when you're buying things in return for points or spending points, where are the ones behind the scenes powering a lot of that too? So, more than just getting featured on a blog somewhere or working with an influencer, there are all of these additional services that exist out there that we are kind of powering or we're partnered with. - So, you get-- - Even credit card rewards schemes. You know, how you sometimes can add a thing into your credit card, like a particular store, some sort of a discount or whatever it might be, that's often us. - Oh, like my Amix Rewards, where I'm getting less. - Yeah, love an Amix Rewards. - That's right. So, that's us, you know, and in there. So, it's where it's those partnerships that it can lead to as well, down the line. It might not be right away, but yeah, I mean, unless and if it leads to something wrong, or that you don't like, then there's no reason why you wouldn't keep them as part of your program. And pushing out promotions, I think just you only do it at key moments of the year as well. What are the key gift-giving periods that you would like to be a part of? And so, obviously, we've got things like Black Friday and Cyber Weekends and all that coming up. That's, those are the times when you might push out promotions as well. But also, can you utilize affiliates? You might also have mailing lists and things like that, to also move some stock. And so, one of the criticisms that the affiliate marketing channel can receive at times is that there can be a lot of couponers involved, like people offering coupons on their sites. It's inconsequential for affiliates to just aggregate coupon discounts on their site and take a clip on the commissions. And so, we always say, like, look, coupons are not a bad thing if you're discount, ooh, ooh, if you want to offer discounts, but it's how you utilize things like coupons. So, if you know that your average order value sits at $100, don't discount below $100, like discount above that amount. So, you're encouraging people to add maybe an additional thing to the cart and then offer a discount. And maybe the discount is simply just preshipping when you spend over $100. So, you know, that, and couponers can obviously have coupons to help out with that. So, yeah, we always say there should be strategies to everything that you do. And so, coupons and discounting is not bad in and of itself. It's how you've employed a strategy behind your discounting policies. - Okay, speaking of strategies, I love that we always bring strategy in. How can we see using affiliates for Black Friday, Cyber Monday? 'Cause that's what we're originally talking about, but you and I've had such a great conversation. I haven't even managed to move the conversation along to that yet. So, before we finish up. - You might have to do some editing, I suppose. - It's a great, look, if it's a really good conversation, we just keep it going. Because I feel like if I'm asking the questions, the people who are listening are probably asking the same questions. But I would love to know, you are behind the scenes, and that is why we are doing this Black Friday series, is to get the insider information of what is happening this year in this current economy all around the world for Black Friday, Cyber Monday. Like, we know the big brands are probably gonna do some really hefty discounting, 'cause they're already doing that. - Yeah. - What are you seeing as Black Friday, Cyber Monday offers? Or what are you hearing? What's the chatter that you're hearing? Give us the insider scoop. - Well, I keep getting asked as to whether or not it's going to be better than it was last year, 'cause last year was lackluster in comparison to previous years, where it seemed an enormous amount of growth. So initially, my thoughts on Black Friday was, is anyone gonna care? Because when we've had such low consumer demand going through throughout this year, and everyone's trying to move stock, so they've been discounting all year long. So is a discount applied at this time of year? Is anyone gonna care anyways, because you've been discounting all year just to move the stock. But then we started looking at who buys when it comes to Black Friday or Cyber weekend. And so traditionally in the past, it has actually been people gifting, self gifting. So they're buying stuff for themselves because it's cheap and they don't feel as guilty buying things for themselves because it was at a discount. But Black Friday this year is moved back a little bit more. So whilst always sat close to this or that Christmas period, it was just far enough away that people were gifting for themselves. Now it's kind of moved back a little bit that what we might actually see this time around is self gifting, I think that will still happen. But it's close enough to Christmas, that Christmas is at the forefront of their mind, that they might start buying for family and friends as Christmas gifts. So we're gonna see self gifting plus gifts for others. So that actually might see Black Friday this weekend perform better than we saw it from last year, which was, like I said, it was kind of lackluster because we watch those results every year coming through live for Black Friday, like what our affiliates are doing. And we usually have to turn up all the resources on our server infrastructure for that weekend as well because it's just getting slammed. So, but last year we only had to turn up a little notch and what, it was okay, nothing amazing, it was okay. So I think that that's what we might see this year. So yeah, like I said, I was relatively pessimistic at first about the performance, but now looking at where it's positioned in the calendar, it's like, actually, I think we might see a good performance this year. - And what do you think in terms of offers? We've had some really interesting conversations. I don't wanna give them away because on the top of my head, I don't know how these episodes are rolling out. I don't wanna give away what some other people have said that they are seeing the offers being, but what are you hearing or what are you seeing in terms of offers that retail and e-commerce or owners are going to be putting out there? And maybe not even the top 100 companies 'cause I don't know about you, but I feel like it's gonna be even deeper discounting because they're on such a tight crunch. Brass here in Australia, summer has come early and so everything needs to go. But what are you seeing in terms of offers? - So we are hearing that there's going to be some deep discounting. I mean, even some very big-name brands that are talking up to like 40% of like some very like, let's say, let's say active wear brands, who are looking at something like 40%. So I mean, that's a big discount, but they've got a lot of stock to move. And so they're probably gonna hope that they can start 2025 a little bit more fresh. So there's that, but I think that things are also getting a little more sophisticated as well. And so I think personalization of offers might also start to come into play here as well, where it's not just these deep, site-wide discounts and might be personalization based on where you've been shopping before and the using companies that can help with that. So again, the affiliate ecosystem is very integrated here 'cause we actually work with partners like Intently and Upsellet that are an onsite technology. They get reimbursed for bundling offers together. And they do it based on what you've been looking at and they can bundle things and say, if you bought all these things together, it costs this much. And so you pay nothing, well, not nothing, but some of them do charge fees, but essentially you can use these services in return for them being one of your affiliates. So you're paying on performance. So I think personalization of offers might be something that we're going to see a little bit more of and over the years, like we've seen advertisers working with these third party integrations, quite significantly more than we've seen ever before because they're now saying, we don't just want to offer a site-wide discount. How do we just encourage better buying behaviors on our site such as putting these two things together? Or things that make sense as well, such as if you're buying a camera, it would make sense for them to bundle and say, what about a camera case or what about these additions to the camera? And so, yeah, I think that in terms of the uptake we've had with some of these partnerships over the last, let's say, six to 12 months, personalization might be coming to the forefront in terms of discounting. - And even what I just took away from that is even just bundling, like not even offering huge discounts but just making, I mean, you wish it always make it easier for people to buy. But when people have this heightened buyer intent because they're looking for the thing, maybe they have never thought about buying a camera and a lens and a tripod and getting the bag for free. It's like, oh, cool, well, that's all been put together for me. I know for me, I just recently bought a new monitor and I was so annoyed that it didn't offer me a poll that sits behind the monitor, which my camera mounts on. And it was only afterwards when I got the email, I'm like, oh, now I have to buy another order to be able, I didn't even think about it. But if they had said, do you wanna add, which Amazon do do very, very well, do you wanna add the poll for your light? I would have been like, hell yeah, I do. - Yeah, yeah, absolutely, absolutely. I mean, the bundling thing, I mean, that certainly started a long time ago but it took a long time for this to get the uptake as well from brands because generally, they didn't have the technology or the technology wasn't in their existing shopping carts to facilitate this and there were third parties to do this. And so there was some hesitation, but these third parties, it's what they specialize in. So they're putting a lot of time and effort to ensure that bundling is done correctly with the most relevant products too. So I think that we'll definitely see more of that. - Maybe not so much for this year. I feel like it's only still too new. But I think for next year though, we can expect to see more of the live shopping coming through. So the West hasn't taken up live shopping as much as they have in the East. And so whether or not it's a big thing or it's just quite, it's aspirational that we will have another opportunity to sell like they do in China. - But that's a medium. - Do you mean unlike the WeChat and the WhatsApp or do you mean more? - The WeChat, the WhatsApp's even just on social media channels, whether it be like Instagram as well or any of those things that'll have some sort of a live service where they're, "Hey, here's a product and here's where you can buy it." And they're talking about it, they're showing it to you. - So that's cool. - Yeah, I know, we're going back to the home shopping network, aren't we? - Don't go back to the beginning. - Everything is cyclical, right? Everything comes around. So here we are doing the exact same thing we used to do with the home shopping networks. We're just doing it in a new way now. So I have seen some signs say that, "Oh, this is going to be a thing. "I don't think it'll be so much a thing this year for the West." But maybe next year, we might see a bit more of it. It doesn't feel like, "Oh, I'm not hearing a lot of, let's say, "my generation of millennials or even old generation. "We're really talking about, oh, I bought this single live shop. "I've had no one talk about it." So I don't think we will see it this year, but I think next year, maybe, maybe. - I know that in America, with Commentsoul, which is an app that helps facilitate that, it is a little bit more of a thing, but it tends to be more of that MLM niche. And that's how they do it, which gives it that Ick factor. So I'll be interested, guys, you heard it here first from Zane. Thank you so much, Zane. We could clearly talk for a very long time. If you could leave the listeners with one piece of advice going into Black Friday, Cyber Monday, or about using affiliates, what is it? - With affiliates, especially, I would say treat them like human beings or any other staff member that you have on your team, 'cause that's what they are. They're an extension of yourselves for a certain extension of your team. So working together in meaningful ways is going to be really, really important. And knowing that an affiliate program isn't just a switch you turn on, and you can't switch off, but this title wave. It does take time, especially if you're new to the scene. So give it the time that it needs, 'cause we have seen, and we've got so much data on it, those that really persisted in this area, and they were smaller brands, that they started with this when they were very small and unknown, and then became these larger brands, and affiliate became such a big part of their marketing, I guess, and also their revenue generation. I mean, not to name drop, but showpay for those that know that brand in this market, that we were working together in the very, very early days before they were well known, and now see where they are. And so it took time, but affiliate they persisted with, even at times when maybe they needed to change the strategy. They looked at affiliates and said, "This is still important to us because it does generate us." Revenue, it's constantly getting our name out there. And so, yeah, it is a time thing. So that's, I think, my best piece of advice when it comes to it, because it is a performance-based channel. So the costs aren't that extraordinary, and it is an after sales channel as well, where it's like, you're not paying before you've made the sale, you're paying after sales. - Yeah, I love that. Zane, from Commission Factory, thank you so much for sharing all of this with us. I think we're gonna have to get you to come back and give us like a post Black Friday breakdown, and see how-- - I'd love to. - Even I'm curious as to what's gonna happen this year, 'cause I just don't seem feel like I can pick this year. - Yeah, it's a bit like that. So thank you so much for coming on the show and sharing all of your information. - Thank you so much for having me, it was great to be here. - So, that's a wrap. I'd love to hear what insight you've gotten from this episode, and how you're going to put it into action. If you're a social kind of person, follow me at the Selena night, and make sure to leave a comment and let me know. And if this episode made you think a little bit differently, or gave you some inspiration, or perhaps gave you the kick that you needed to take action, then please take a couple of minutes to leave me a review on your platform of choice. Because the more reviews the show gets, the more independent retail and e-commerce stores, just like yours, that we can help to scale. And when that happens, it's a win for you, a win for your community, and a win for your customers. I'll see you on the next episode. (upbeat music) (upbeat music) [MUSIC]
