In its second-largest acquisition, Amazon buys the company for $970 million.
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On Buy.com itself, some of the strongest conversion rates are driven by the site's "Weekly Deals" feature. Buy.com aims to replicate that success by allowing affiliates to log onto a Buy web page to view weekly specials and use its LinkBuilder tool to copy the web page URLs for any of the deals to show on their own sites, Wisot says.
Some smaller affiliates choose to capture those URLs and enter them directly into a form made available to them on Buy.com to instantly create a trackable link on their own site, Wisot adds. That lets them track the commissions owed them for purchases from those links, without having to visit their affiliate network. Larger affiliates may be more inclined to leave that tracking to an affiliate network.
Reaching out with top sellers
But Buy doesn't just wait for affiliates to seek out its deals; it also e-mails affiliates regular notices of its product offerings and special features like "Top Sellers" with links they can add to their sites. It also lets affiliates subscribe to RSS feeds for the same content.
Buy also introduced earlier this year its StoreBuilder web site development tool, which affiliate partners can use to build new web sites or secondary sites with content from Buy's weekly specials, videos, free shipping offers and other promotions related to its more than 7.5 million products. "When we announced this in the first quarter, within two hours more than 500 affiliates signed up for the beta version," Wisot says. "Now we have thousands in the program."
The StoreBuilder was designed to be extremely flexible for site developers, a tack Buy hopes will lead to its products getting prominent placement even as it lets affiliates use StoreBuilder to load products and content from competing retail sites, Wisot says.
At Gaiam, reaching out to affiliates also helps to prime the pump of social marketing.
When Gaiam wants to create buzz about niche products like its $140 Zen alarm clock, which gently awakens its owners with gradually rising Tibetan bell chimes, for example, it may turn to some of its newer affiliates that mix social media and commerce, such as ShopSocially (on the web at ShopSocial.ly) and Savings.com.
After determining which affiliates engage its target shopper, Gaiam will give them a sneak peek of new features or special deals, aiming to encourage the site's editors and bloggers to write about them. Combining special offers with word of mouth goes a long way to producing customers, Fox says.
"We have niche products, but not the biggest brand awareness, so we look for affiliate partners who can help us drive consumer engagement and drive up conversion rates, and we see strong conversion rates when people are talking about our brands and products," Fox says.
With more shoppers conversing about and researching products online, often seeking out bloggers and other informational sites, there are new opportunities for retailers with strong affiliate programs to get in on the conversation.
To affiliates, Drs. Foster & Smith says, 'No thanks'
Not all retailers are sticking with affiliates to drive traffic. With several states either passing or considering laws that require online retailers who advertise through affiliates based in their states to collect sales tax on purchases placed by residents, some merchants have opted to cancel their affiliate relationships to avoid tax collection.
One of them is pet supplies web-only retailer Drs. Foster & Smith, which pulled out of all of its affiliate relationships early this year and is unlikely to ever return to the full scope of its former affiliate programs, says Gordon Magee, manager of Internet marketing and media.
Rather than just terminate relationships with affiliates in the handful of states including New York and North Carolina with affiliate-based sales tax laws, Drs. Foster & Smith bailed on all of its affiliates nationwide because it was unclear if or when other states might follow suit. "We didn't want to be suddenly subjected to a new law and liable for a large amount of sales tax, and we're concerned these affiliate laws could eventually expand to include an income tax," he says.
Since taking that action, Drs. Foster & Smith has concluded it can largely live without the customer leads that affiliates produced. "Most customers coming through affiliates were our customers anyway, and they continue to purchase," Magee says. "We haven't seen a change in our conversions."
Magee adds that since customers are no longer going to affiliate sites to check for coupons just before checking out on DrsFosterSmith.com, the elimination of commissions paid to affiliates has improved the retailer's profit margins.
Affiliates were most useful to Drs. Foster & Smith when it was a younger retailer in need of new customers, but they are less important now that the e-retailer has built a base of repeat customers, Magee says. Although he doesn't rule out a return to affiliates, such as in the event of Congress enacting a nationwide sales tax on online sales, any future use of affiliates would be in a particular niche that would drive a high percentage of traffic from new customers, he says.
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