

Why My Startup is Better than Google's Implementation - NathanKP
http://experimentgarden.blogspot.com/2009/12/how-googles-blogger-amazon-associates.html

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moe
This looks interesting but I wonder how long until amazon kills it "by
accident" when they make their own widgets region-aware?

I also find replacing every 7th ad (14%) with your own a bit hefty of a fee -
but I realize your target audience (mostly smaller scale bloggers I assume?)
might be okay with that.

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NathanKP
_This looks interesting but I wonder how long until amazon kills it "by
accident" when they make their own widgets region-aware?_

That is a point of concern yet I don't think Amazon.com will because as it is
having no regional awareness allows them to make free money and avoid paying
commissions.

The current fee is being adjusted while I determine what is required to make
the service able to pay for itself. I am thinking of doing away with it and
simply offering a paid account for say $1-$2 a month with more features.

The thing is customers still benefit since they are able to make money from
the UK, and CA rather than just the US. So the idea is that customers still
come out on top despite the Affiliate Script fee. The extra ads that they gain
from regional awareness should more than make up for the 14% fee in any blog
that has a sufficiently diverse global audience.

But like I said we are still adjusting it as we determine what makes the
service profitable.

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ggrot
It may not actually be in Amazon's best interest to make this "free money".
The ROI for publishers will be lower, hence the publishers will consider using
alternatives (adsense, chikita, commission junction). Amazon will lose sales
from this.

Additionally, if enough publishers use a system like yours they Amazon won't
actually be making more money, they will just be giving a third-party more
money. Thus amazon's lack of regional awareness depends on you not being too
successful. Not a good place to be.

If amazon wanted to maximize their own profits, they would enable regional
awareness and simultaneously decrease commissions by 1/7th. The publishers you
support would make the same amount as before, but would no longer need your
product.

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ggrot
Also worth adding, if your ip database doesn't match amazon's exactly, there
is money being left on the table. If amazon just "fixes" this issue, there
won't be.

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NathanKP
True enough. Obviously Affiliate Script is on shaky ground if Amazon.com
adopts the features that I have developed, but then again it is my first
startup idea, so while I hope for success there is the very real possibility
that I may go obsolete. That said, I doubt that Amazon will update their
system anytime soon.

At the very least Affiliate Script is a serious project and demonstration of
my programming skill that may help me get a job later on, so either way I
benefit.

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chris123
The 14.3% fee is way too high.

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NathanKP
Thanks for your feedback. What would be the fee you would be willing to pay?

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notauser
I'd sort of expected it to be around the 2-3% level as it would be for a
merchant account.

At 14% I might give it a go on a prototype, then rip it out and build my own
the moment I saw the potential for high traffic volumes.

 _Edit: A sliding scale with a cap would be very attractive. I'd also be more
willing to give a higher percentage for non-US/UK referrals because the long
tail of smaller markets would be a pain to code up._

~~~
NathanKP
Thank you very much for your suggestions. Personally I figured I would start
with one in seven and then reduce it later as I find out whether or not it
will be profitable.

I figure that it is easy to lower the fee and it will just make existing
customers even happier. On the other hand if it turns out not to be profitable
raising the fee would cause many to leave.

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tdmackey
Sadly, implementation isn't all that matters.

