Companies with Affiliate Codes - Do You Research Their Program to Haggle a Better Deal?

I was reminded of this technique earlier today when I was looking to pull the trigger on a new bike:

  1. Google the company name AND "referral partner" OR "affiliate"

  2. If you can find evidence* that they have a referral/affiliate program search their store (or email them) for details

  3. Once you know the amount/terms use this to further negotiate with them

Who else does this? Any stand-out success stories? My example today was the shop offering me a discount of $50. Did my research and saw that their affiliates would have got $249.90 (10%) if I'd used them. Asked the shop directly and they bumped the offer to me to $175-off. I'll take that as a win.

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(*)Example:

JOIN OUR AFFILIATE PROGRAMME!
Cookie duration 45 days
Commission type % of sale
Commission amount 15.00%
Additional terms You will get 15% commission on total referral sales when a customer makes a purchase through your affiliate link or use your coupon code.

Comments

  • Why'd they give you a further discount if you're not a partner or apart of the referral/affiliate program?

    I've personally never done this before, with any purchase.

    • Why? To secure a sale, create a happy customer and NOT pay the referral/affiliate partner.

      The %-of-sale they pass through to referral/affiliate partner (eg Shpback, Fnder.com.au etc) is built into their retail margin. They keep a bit more of it and share it with me.

  • 15% commission? Well it's pretty obvious their marings must be through the roof

    • +1

      it's pretty obvious their marings must be through the roof

      Mate - your eyes would water on some shops. I was helping my wife with the purchase of some cosmetics she was after. The affiliate program was offering 25%. She fired-up chat, highlighted that if she clicked the link from a certain deals website then they'd have to pay them 25% of the order total excl shipping. The rep turned around and gave her a 15% off discount code.

      If you don't ask, you definitely won't get. ;-)

    • In my humble experience, the wholesale to retail mark up (to RRP) in Australia is typically in the 60 - 100% range … i.e. something that wholesales at $100 is going to run you $160 - $200 retail.

      Now obviously there are other costs that need to be paid out of that margin, but once you gain an appreciation of this you do take on a different perspective on "retail pricing and discounting".

      It also demonstrates how some outfits can run quite healthy affiliate/referral programs and still turn a solid profit.

      • +1

        Depends what you're buying, but there's a really good reason that shoe stores and high end clothing tend to fill expensive real estate, the margins are bananas.

        On the other hand, PC parts from online stores run much, much lower margins and make it up with volume, they're definitely not making $600 off a $1600 GPU at the moment, nor is JB Hifi making $600 off a $1600 iPhone. Supermarkets are the same (although it's an interesting mix. I worked with the former head of pricing at Coles once, he said he had nothing to do because everything was built off contracts and algorithms).

        Nothing beats the margins on an expensive HDMI cable though.

        • +1

          Jewelry and gift stores I've known had 500+% markups.

        • Obviously it's a mixed bag and there are individual examples that will differ significantly either way on what I've described.

          Some products, as you say, run on thin margins for a number of reasons. iPhones are the classic … every retailer just has to carry them or the consumer will be off down the street. Apple know this and simply set the prices retailers are "obliged" to charge and extract all the margin for themselves. They haven't become a trillion dollar company by letting retailers share in that profit.

          Supermarkets can exist on lower margins because not only does the stock have incredibly high turnover, but they carry negative inventory (i.e. they sell the goods before they pay for them), and any discounts that are advertised are generally and largely paid for by the supplier, not the supermarket. As you say, the supermarkets have quite sophisticated demand models across their lines that set prices. They now exactly how many more (or less) "widgets" they'll sell at any given price point and the effect discounts on "key lines" will have on driving consumers to shop at their chain rather than the rivals'.

          One specific example I'll share with you is bicycles. These run on the sort of margins I described above. If you take bicycles in the abstract (i.e. consumer durables that are "every day" items, but not necessarily out-and-out commodities), you find that many other similar goods that you'll find in many if not most households will operate on the margins I've described.

  • What bike did you buy?