e-business

Zappos reduces commission - now pays only 12% per sale (down from 15%)

Got this bit of bad news in the email just now

Dear Pranav Chavda,

Thank you for your participation in the Zappos.com affiliate program. We are contacting you to inform you of an upcoming change in the commission rate within the Zappos Associate program. Please note that new program terms with a payout of 12% will be pushed out 3/19/07. Affiliates will have two weeks to accept the new terms before they automatically become effective 4/1/07. All current performance incentives tiers will remain in place.

As a customer service focused company, we invest a great deal of money into improving the customer experience. The recent introduction of free overnight shipping and the growing product offering are part of that effort. As a result of some of these things, Zappos.com has already seen a 30% increase in affiliate sales over last year. This is great news for everyone. Affiliates will continue to benefit from our growing inventory of quality products and our belief in providing customers the best service possible.

We hope you will remain a valued associate, and continue to develop and monetize your sites effectively to help us create a great user experience. We feel there is tremendous opportunity to increase revenue through the program. If you have any questions or concerns, please do not hesitate to contact us. We value your input and suggestions.

Sincerely,

Zappos Associate Program
associates@zappos.com

Translation: You sold 30% more zappos shoes this year than last year, As thank you, we would like to give you the gift of a 20% pay-cut.

…Zappos was among my top 5 performers for the past few years now, but I guess I will be paying more attention to promoting Shoebuy (pays 17%), Shoes.com (pays 17.50% to 20%), the mason shoe brands that all pay 15% - all of these have similar EPCs as zappos, smaller inventory but that’s okay - Zappos didn’t have this big an inventory when they started making me money - their conversions have actually dropped since they started focusing on selling items that are not shoes. Might even check out the onlineshoes.com program over at linkshare.

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