Salena Knight 0:02
So 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.

Salena Knight 0:51
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?

Speaker 1 1:27
I remember them very well because I was one of those bloggers.

Salena Knight 1:32
So tell me, how did you end up in ecom? 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, oh, 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.

Speaker 1 1:58
That's right. I you know, every now and again, I feel old. And I think I felt old at that point too. It has, 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 commerce, goes back, you know, 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 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, I had I had all these technical skills that I just have naturally inherited, you know, from being a millennial, you know, kind of I grew up as technology was progressing, and you just kind of learn as you go. And so I did start a content blog around, I think it was, it was men's fashion, actually, at that time. So I'd 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. And at that time, men's designer underwear was kind of a newish thing, you know, beyond bonds underwear that every all guys had. Now, they're all these brands. I'm

Salena Knight 3:30
gonna say, when I first met my husband, which was in the end of 2003 I was I'm a tight ass, and I was astounded that he was buying Calvin Klein underwear. Like nowadays it's so deregular. But back then, they were like, $40 a pair. And I was like, Oh my gosh, you're so fancy.

Speaker 1 3:53
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, 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.

Salena Knight 4:43
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 and buy it all, or were people giving it to you? Pre? Remember, this is pre. Influencer days,

Speaker 1 5:01
yeah, yeah, that's right. So I guess I'd be one of the OGS then, you know, before the all the influencer stuff, right? I mean, I didn't have an Instagram account. I didn't exist. No, it didn't exist. Twitter was barely a thing. I remembered first getting into that and saying, Oh, maybe I should get into Twitter as well. But, yeah, I was given so many samples 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. Just a little too elaborate. From

Salena Knight 5:30
were you taking speech? Were you taking pictures of yourself?

Speaker 1 5:34
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 underwear is on my face. But still, you know, I never, never put the two together, where 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 say, Well, prove that was me, proved that's me. The foresight you had back

Salena Knight 6:03
then, that's

Speaker 1 6:04
right, exactly I learned very early on the internet is forever so, so I never took anything that was too compromising.

Salena Knight 6:14
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, 2002 1007 I 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 a relationship with an interior stylist to help them create the perfect kids bedroom, the fact that I was, I was listening to my customers and going, Oh, look, I can't help you design it. 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 fee? Because that's what we called it back then. How much of a referral fee do you get for all of these things that you're doing? And I'm like, what do you what do you mean? No, I just, I just do it to help my customers and be a nice person. And it was, I think it was at like, 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 influences, 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, you know, sign up to be an affiliate, and 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 going to 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 do you have you seen affiliate marketing change over the last nearly two decades.

Speaker 1 9:25
I mean, yeah, it's definitely changed a lot. I mean, it 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, you know, they were the decider between, you know, VHS or Betamax, and they were the decider between, you know, Blu ray and HD DVD. I didn't even know that. Yeah, yeah, it was the porn industry that was the decider between those the. All those technologies, that's right. So, so when HD DVD and blu ray, we know we're going to fight it out the the Yeah, the adult industry decided to go on Blu Ray, and that's who won out in the end. So HD VD went away. And so,

Salena Knight 10:14
yeah, I'm going to go out on a limb here and say, I don't know how the adult industry used, or uses affiliate marketing? So back in the day, how did they, like, how did they use affiliate marketing?

Speaker 1 10:30
They were generally after leads and sign ups for a lot of for a lot of their sites with, 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 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 so it had, they had to come from trustworthy sources or referrals as well. And so there were people out there who were who maybe had blogs, or they were on forums discussing, like adult toys and gifts and so, and then they're referring people off to, you know, additional resources, we'll say, and, and people trusted those first versions of the influences, right? So, 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 networks, affiliate networks, that are purely based on 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 a third party. But yeah, so it was, it was those original influences coming through from forums and blogs and and chat services as well that were referring people. So yeah, your your initial foray as a referral source. That's what they were doing, too. For the porn industry,

Salena Knight 12:05
my bad, people were pregnant. I don't know that they needed that, but that's okay, because what we were doing, we were finding, you know, the mummy bloggers and things like that. So we would 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 going to get a few dollars in the process, it'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 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 rent their space, and we would just sell tickets for them. And so we would keep maybe 20% so that was like $20 for every ticket. And you know, 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, it feels

Unknown Speaker 13:19
authentic anymore. It doesn't,

Salena Knight 13:21
does. And again, when the influences, 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, you know, the kudos of, oh, they use 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 pay to 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,

Speaker 1 14:16
so what they make? I mean, obviously is going to be reliant on on what they do and what they're selling, but traditionally, what we make up for them, in terms of their revenue, is sits about the 15 to 20% of their revenue. Whoa, so that that can be us. Now, that will fluctuate depending on on who it 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. Be like, Okay, well, this affiliate sent this sale, so that's commission there. So, but we see about 20% and you know that that obviously gives some some leverage to us as well. Like, you know what? If people are we. Wanting to 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 by cutting that and and then it's also how they value, what the affiliates contribute to them to so which, 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 from 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. You're buying. There isn't a great deal of brand loyalty that exists now. It's either gonna be price based or just how, or your current mood as well. So you're just like, Oh, I'm just gonna 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, not, not to say that, you know, I'm not one of these people that will say, 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?

Salena Knight 16:32
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 who you know, 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 going to buy the product from you in the first place, then they would have just bought it from you exactly something or someone else to convince them that they needed to buy so That's

Speaker 1 17:19
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 did something else there to sort of direct you back or direct the customer back to you,

Salena Knight 17:43
which means they're 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 went 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 first hand information. I'm going to say I am not very good at 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 yet, I'm just like, I'm not paying you money for this. I want first hand information, like I will go and find the tech geek who actually gives me the review, and I'll give him my affiliate money.

Speaker 1 18:48
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 a slow cooker when I was buying my I don't know. I've never owned a slow cooker before, so I found, you know, one of the is actually, I think it was a mummy blog, and they had said, Well, look, here are five, 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, and only because it was in my, you know, sort of trademark blue color that I wanted it anyways, and that came out the best, like, good. Okay, that's all I needed to know you've got. That's all I needed to press the buy button. Exactly, exactly. So, so I I'd already made a decision, but I just wanted a little bit more, you know, verificational validation for that decision. So

Salena Knight 19:39
we underestimate validation. Like I was looking I just bought, 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 a 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

Speaker 1 20:15
hinges. That's right. You know what you're getting into, right? You can't just needed the validation.

Salena Knight 20:19
I just needed the validation of it looks beautiful. Reviews is a whole different conversation.

Speaker 1 20:25
Yeah, let's go back then this, oh, sorry I was gonna say, let's

Salena Knight 20:29
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, 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

Speaker 1 20:58
that hopefully, I guess, I guess that we have, and probably one of the one of the pitfalls I have is that I've been in this industry for so long, I had this assumption that everybody knows how it works. I mean, I think until very recently, my parents maybe 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 I mean, affiliate marketing is essentially that digitized version of referral marketing, you know, telling someone, hey, go buy this from there, and then that person says, Oh, thank you for sending that customer to me. I'm going to 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 themselves 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, is calling in performance marketing, because if our affiliates don't generate sales for you, you don't pay anything. And so that difference

Salena Knight 22:28
between influencer marketing, because I'm going to ask you this question, the difference between influencer marketing and affiliate marketing, because you can have both at the same time, and the difference between correct me if I'm wrong, the difference between using an affiliate, an affiliate, an affiliate,

Unknown Speaker 22:48
maybe it's a new term, the difference between using

Salena Knight 22:51
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.

Speaker 1 23:05
Absolutely that, that that is one of is the biggest difference. And I mean, especially when influencer was kind of new, like some of those, those tenancy fees to actually be promoted by an influencer could have been astronomical, and also depended on their audience. That kind that that sort of shifted a lot more these days, because the bigger the audience, the less authenticity they seem to have. And so we found that brands are enjoying working more with these micro influencers, you know, 10,000 or less followers, because they're getting better value from it, because the influencers have a smaller audience, but they're still, they haven't got so big that they that they're now completely seen as inauthentic. Yeah,

Salena Knight 23:47
they're still realistic. They're still like a real person, that's right. And they're still really

Speaker 1 23:50
and they're working hard, you know, for that money as well, because they want people to pay them for tenancies. But I mean, mixing the two together has become, you know, quite common now, where the influencers will generally still expect some sort of a tenancy fee or replacement 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 risk by saying, but we also want to, we want to earn commissions on the sales that we send to you. So if they, you know, if they generate no sales, and they get nothing from you more than the tenancy that you've already paid, but you know, they could also do an absolute ton of sales for you as well. And so, so they're taking a risk there, they could do very well, or they could do very poorly out of the situation so So, and I think that advertisers or brands actually appreciate that where there's there's this vested interest in it succeeding, and both taking a little risk on on, on either side.

Salena Knight 24:51
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.

Speaker 1 25:11
Yeah, that's right. 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. 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 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 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 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

Salena Knight 25:54
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 1000s of dollars for the people listening. Can they afford this? Can is this something that every person listening can go, You know what? I'm going to bring that into my marketing suite.

Speaker 1 26:22
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've got to build your brand. You've got to 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, you know, it can 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 there. And so when it comes to companies like ourselves, like we do have some level, like monthly fee portion to to what we do and whether and that can be sort of siloed out into just the technology, if you just want to do it yourself, and then we have a service component as well. If you needed some, some some help, or you wanted a dedicated account manager, those fees aren't enormous, because, you know, we, we, we would make we make more if you're successful, because we we, we take a clip on the the Commission's being paid out or, well, it gets added to it. So if you are successful, that's our vested interest. So we take this small monthly fee, and that's, that's obviously for everything else that we're doing with we were obviously building the technology. We're doing updates. We obviously office. You're a business as well. You have to make money and and you, you know, 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, you know, we take you on, we charged absolutely nothing except for the performance fee. And if your program didn't perform, or you were paying, you know, very fairly unreasonable commission rates. We weren't making much either, and so, so that did shift, you know, in the last few years that we're, you know, we have to, like, well, we have to make money as well to, obviously, keep the lights on and keep 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 and, unlike working with like a meta or Google, it is, it is a channel where we are far more approachable and negotiable as well. Whereas, you know the other guys, the price is the price. If you don't want to pay it, you don't play but you don't know what the

Salena Knight 29:17
price is. Sometimes, before you jump into it. You're just like, here's some money, crossing my fingers and hoping Exactly,

Speaker 1 29:24
exactly so. 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, let's say, if you're 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 want to 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, because you're trying to convince the affiliates to also promote you. You're an untested brand for them, yeah. So

Salena Knight 30:29
if they can go with a bigger brand, almost almost guarantee that they're going to make money out of

Speaker 1 30:35
it, exactly, exactly. So you've got to convince them, you know, a little bit. But, yeah, it is some relationship building in there too, because the affiliates are either individuals or they are companies. They're not algorithms, so they're actual people behind it too. And so we, we provide a means for these, these two parties, to communicate as well and talk. So then they can, they can work things out together, or, you know, inviting in 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 then. So despite, you know, maybe a lower commission rate, you know, affiliates will also work with you because they like you.

Salena Knight 31:14
Oh, and isn't that the world in general, though, we really like to work with people that we like Exactly,

Speaker 1 31:20
exactly. So, 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 last thing you want to 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 going to 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 sales person 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 there, they're at 15% and they're doing really well for you. And then you turn around say, Oh, actually, we're having it. Guess, whose links are going to remove from this side?

Salena Knight 32:14
Yeah. And I think what we 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 going to 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 want to do for me? Yeah,

Speaker 1 32:35
exactly, exactly. It is very rare that you would be the only person doing what you do. And so an affiliate marketing is relatively prolific. So you know, your competitors might actually already work with us. So that's a comparison that we will be able to make this like only competitors paying this, or they're going to be on a competing network to us as well. And so, you know, 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 and can be hard to convince those that exclusive sell a lot of like, let's say white goods and electronics, their margins. I

Salena Knight 33:30
was gonna jump in and say, Is it electronics? Yeah, yeah, the margins

Speaker 1 33:33
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, you know. And hopefully we'll buy other products, but yeah, so so that that industry really struggles with this, because 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, point 5% commission. And so for some affiliates, like, oh God, we'd have to sell a lot to get something out of

Salena Knight 34:18
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 margin, while the actual rate might be smaller, the amount that they're bringing in, could end up being higher.

Speaker 1 34:38
It absolutely could be. And I think that that that might just be a kind of pure way that that some affiliates might look at this as well and say, Oh, well, you know, if I only sold one fridge a month, is that enough and so? But though I want to sell 20 fridges a month, like, Well, maybe you will. Maybe you will. Depends how popular your blog is or your how big your audience is,

Salena Knight 34:56
yep. 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 in your vertical or niche, 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 would I be correct in saying, if you wanted to make affiliate marketing work, this is not a quick fix, because you said it can take some time with the ramp up period you you can't just go into this going, I'm going to list my product on commission factory, and all the money is going to come in. That's right. Need a strategy.

Speaker 1 35:55
You do need a strategy. It is a long term play, and it's not set and forget, you know, it does require some input from you. And when we get asked often from from new customers, how much time is this going to take? Me? It's, it's kind of like, well, it kind of depends on you, what time you've got available.

Salena Knight 36:13
How much money do you want to make? How

Speaker 1 36:15
much money do you want to make, I mean, and there's a big difference between, like, you know, the owner of a company, you know, who's the, you know, their SME, as we know, is like business owners, you know, there's a point where you have to do everything yourself. And so your time is finite. And so you you can look at and say, Okay, I really only have, you know, an hour a week. And we'd probably say, look, that might be, that might be okay, you know. Or if you were aiming for 30 minutes a day to just go in and do things such as, you know, having a look at affiliates who've applied to your program. Because that is obviously one great way to start, which we know that some people don't, don't go and do it, I guess, quick enough and consistently enough is actually approving affiliates to promote you. Because sometimes they'll have hundreds of them sitting in there. They've said they've shown an interest in your product or your 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 like, oh, I want to promote that. And then two or three weeks later, you you approved them, if not longer, and they're like, Oh, well, I was gonna write an article, but no, or

Salena Knight 37:24
even, do I really want to work with someone who takes two to three weeks to say yes to me making them money? Yeah,

Speaker 1 37:31
exactly so. So that's that's usually one, 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, like, full control over this sort of thing, so they can look at who's applied to their program, and they can decide, is this a good fit, or is this where I want my brand to be? We give them that ability. There are others, though, who do want to 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, you know, and it's just different qualities of affiliates. I mean, we have a vetting process ourselves, you know, where, where certain affiliates aren't allowed on the network, and we review how they're going to promote you and that sort of thing. So obviously, no, no, no, no, no pornographic material, no hate speech, nothing like that. You know, 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, 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, you know, aligned and controversial. So might say, I don't really want to work with that affiliate anymore. And you can, you can obviously start working with them at that time.

Salena Knight 38:49
So I have a quick question. So you just, I don't know the answer to this, but you just said, you know, 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 are 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 going to 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 going to write an article, so maybe they only be an affiliate for your company, like, once a year. Like, what is the Well,

Speaker 1 39:41
I mean, the links, the links are there forever, you know, especially if it's a content site and so. So for as long as though you're you're active with us, or you're active with that affiliate, that link will always redirect through to your site. So, so that's, that's one of the consequences, I guess, when, when people do shut these sorts of things down, like an affiliate program, for example. Yeah, is all the links that were built to your site from those affiliates also break, so they're no longer going to 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? Is it of consequence to just still have them as part of your program? I mean, because some of them honestly, just take a while as well, because they 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, has, 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 you've got so a lot of consumers will never know that we exist, because we as commission factory, we are behind the scenes, and we're B to B, 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 cash back websites, whether it's like cash rewards or shop back. That's us powering that. So that's how you get cash back. Is through is us paying commissions to cash back or shop, sorry, sorry, cash rewards or shop back, and then they pay that commission out to their consumers. So that's how cash back is working. So when you're shopping through cash back sites, we're powering all that. So maybe it's just that you want to get featured on them. You know, not, not as often, but you know, the airline malls as well. We are powering that, whether it's, you know, for their general for Qantas. So when you're buying things in return for points or spending points, where the ones behind the scenes powering a lot of that too. So, so so more than just getting featured on on a blog somewhere or working with an influencer, there are all of these additional services that exist out there that that we are kind of powering or we're partnered with. So you get even, even credit card reward schemes. You know how you sometimes can add a thing in into your credit card, like a particular store, some sort of a discount, or whatever it might be. Whatever it might be, that's often us, oh,

Salena Knight 42:05
like my Amex rewards, where I'm getting less, yeah, love it AmEx,

Speaker 1 42:09
that's right. So, so that's us, you know, and and in there. So, so it's where it's there's partnerships that it can lead to as well, down, down the line. It might not be right away. But yeah, I mean, unless an affiliate is doing 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 put it pushing out promotions. I think just Do you only do it at the 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 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 coupons 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 your discount, 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. Man, maybe the discount is simply just free shipping when you spend over $100 so you know that, and couponers can obviously have coupons to help out with that. So 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.

Salena Knight 43:57
Okay, speaking of strategies, I love that. We always bring strategy in. How can we see using affiliates for Black Friday, Cyber Monday? Because that's what we originally talking about. But you and I have had such a great conversation, I haven't even managed to move the conversation along to that yet. So before we finish,

Unknown Speaker 44:15
you might have to do some editing. I suppose it's

Salena Knight 44:19
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 going to do some really hefty discounting, because they're already doing that.

Unknown Speaker 44:48
Yeah, what

Salena Knight 44:49
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 inside of scoop.

Speaker 1 44:57
Well, I. Getting asked as to whether or not it's going to be better than it was last year, because last year was lackluster in comparison to previous years, where we would seem that, you know, enormous amount of growth. So initially, my thoughts on Black Friday was, you know, is it? Is anyone going to care? Because, you know, when we've had such you know, 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 going to care anyways, because you've been discounting all year just to move the stock. But then we started looking at this. You know, who buys when it comes to Black Friday or cyber, 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 this year has is moved back a little bit more so, I mean, whilst always sat close to the saw 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, you know, forefront of their mind that they might start buying for family and friends as Christmas gifts. So we're going to see self gifting plus gifts for others, so that actually might see Black Friday this weekend perform, sorry, this year 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, you know, 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 went, it was okay. Nothing amazing, it was okay. So I think that that's what we might see this year. So 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 see a good performance this year. And

Salena Knight 47:15
what do you think in terms of offers? We've had some really interesting conversations. I don't want to give them away, because I on the top of my head, I don't head, I don't know how these episodes are rolling out, and I don't want to 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, store owners are going to be putting out there, and Maybe not even the top 100 companies, because I don't know about you, but my feel like it's going to be even deeper discounting. Because, yeah, they're on such a tight crunch for us here at Australia, Summer has come early, and so everything needs to go. But what are you seeing in terms of offers?

Speaker 1 47:57
So we are hearing that there's going to be some deep discounting. I mean, even some very big name brands that are talking, you know, up to like 40% of, you know, like, some very like, let's we'll just say, let's say active wear brands, you know, who are looking at something like 40% so, so, I mean, that's a big discount, but they've, they've got a lot of stock to move and so, so they're probably going to hope that they can start 2025, a little bit more fresh in so there's that, but I think that things are also getting a little more sophisticated as well. And so I think personalization of office might also start to come into play here as well, where it's not just these deep, site wide discounts, it might be personalization based on where you've been shopping before, and the use using companies that can help with that. So, so again, the affiliate ecosystem is very integrated here, because we actually work with partners like intently and upsell it that are an on site technology they get reimbursed for, you know, bundling offers together. And they 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 so them, and so you pay nothing, Well, not nothing, but some of them do charge fees. But essentially, you can use these services in in return for them being one of your affiliates, so you're paying on performance. So I think personalization of office 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, you know, quite, quite significantly more than we've seen ever before, because they're now saying, we don't just want to offer a site where discount how do we just encourage better buying behind behaviors on our site, such as, you know, 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, I think that in terms of the uptake we've had with some of these partnerships over, over the last, say, six to 12 months. Because personalization might be, you know, coming to the forefront in terms terms of discounting

Salena Knight 50:06
and 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 we should 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 find another order to be able like, I didn't even think about it, but if they had said, Do you want to add which Amazon do do? Very, very well. Do you want to add the poll for your light? I would have been like, hell yeah. I

Speaker 1 51:05
do. Yeah, yeah. Absolutely, absolutely. I mean, the bundling thing, you know. I mean, that certainly started a long time ago, but it, you know, it took a long time for this to up to get the uptake as well from 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, you know, they they putting a lot of time and effort to ensure that bundling is done correctly with the most relevant products, too. So so I think that we will 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, so the West hasn't taken up live shopping as much as they have, you know, in the east, you know. And so, so whether or not it's a big thing or it's just quite, you know, it's aspirational, that we will have another opportunity to sell like, like they do in China. But

Salena Knight 52:11
unlike the WeChat and the WhatsApps, or do you mean more

Speaker 1 52:15
WeChat the WhatsApps even just on social media channels, whether it be like, you know, Instagram as well, or any, any of those things that'll 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 so that's cool. Yeah, I know we're going back to the home shopping network. 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 doing it in a new way now. So, 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. It doesn't feel like, Oh, I'm not hearing a lot of, let's say my generation of millennials, or even old generation, even really talking about, oh, I bought this single live shot. 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

Salena Knight 53:10
I know that in America with comment soul, 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 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, listeners with one piece of advice going into Black Friday, Cyber Monday, or about using affiliates. What is it

Speaker 1 53:41
with affiliates, especially, I would say, treat them like human beings or any other staff member that you have on your team, because that's what they are. They're an extension of your sales versus an extension of your team. So working together in meaningful ways is going to be really, really important, and knowing that you know an affiliate program isn't just a switch. You turn on and you can't switch off, you know, this tidal wave. It does take time, especially if you're new, new to the scene. So give it the time that it needs, because we have seen and we've got so much data on it, those that really persisted in this area, and there were smaller brands that, you know, 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 part of their their marketing, I guess, and also their revenue generation. I mean, not to name job, but, you know, show Po, for those that know that brand in this market that you know, we were working together in the very, very early days before they were well known, and now see where they are, you know, and so. So it took time, but affiliate they persisted with even at times when maybe, you know, they needed to change the strategy. They they looked at affiliates that this is still important to us, because it does generate us revenue. It's kind. Instantly 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. You know where it's like, you're not paying before you've made the sale, you're paying after sale. Yeah,

Salena Knight 55:19
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 break down and see even I'm

Speaker 1 55:32
curious as to what's going to happen this year, because I just don't seem feel like I can pick this year.

Salena Knight 55:36
Yeah, it's a bit like that. So thank you so much for having for coming on the show and sharing all of your information. Thank

Unknown Speaker 55:43
you so much for having me. It was great to be

Salena Knight 55:47
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.

Zane McIntyre is the CEO and Co-Founder of Commission Factory, the leading affiliate

marketing network in the Asia-Pacific region. With over a decade of experience in digital

marketing, Zane has driven the company’s growth to become a major player in the

industry, while leading its successful integration into Awin, a global affiliate marketing

powerhouse. Under his leadership, Commission Factory has continued to innovate,

connecting brands with performance-driven partners across APAC.

Known for his expertise in affiliate and partner marketing, Zane has a deep

understanding of the digital ecosystem and has helped countless businesses achieve

growth through performance-based marketing. He’s passionate about empowering

businesses with data-driven strategies and has a keen eye for industry trends.

Zane’s work extends beyond the office, where he’s recognised as a thought leader in the

space, often speaking at conferences and events. In his spare time, he enjoys exploring

new tech and digital strategies that can shape the future of marketing.