The Cost of Selling Through ClickBank
I've been considering dropping ClickBank as a payment processor for CaRP Evolution. Today I ran the numbers to see how much it's costing me to use ClickBank vs. PayPal, and I thought I'd share.
How does a ClickBank affiliate get an advantage over competing affiliates? One way is to offer bonuses to people who buy through your link. Another is to have better data to choose products to promote (like finding up-and-coming products before they've been promoted to death). Instant Affiliate Accelerator offers an automated bonus delivery system, research data, and more.
If a customer arrives at my site through a ClickBank link, the payment goes through ClickBank. Otherwise it goes to my PayPal account. Aside from the added work involved in maintaining both systems (not much, but more than nothing), using ClickBank loses money in a few ways.
In fairness, I'm sure it makes me a little money too by referring sales that wouldn't have been made otherwise. Unfortunately, I don't have a way to estimate that. Here's what I do know.
- Most of my sales go through PayPal (I didn't calculate the ratio, but ClickBank's percentage is pretty small.)
- 66% of my ClickBank sales are paid for using PayPal.
- The other 34% are paid for using credit cards.
- Unless the buyers are in countries not supported by PayPal, no sales would be lost because of unsupported payment methods.
- 47% of my ClickBank sales are credited to known affiliates (I could create affiliate links for them and probably get them to switch easily enough).
- For at least 21% of my ClickBank sales, the buyer is the affiliate -- they're using their affiliate link to get a rebate (it could be as high as about 45% -- reality is probably somewhere in between).
- 3% of my ClickBank sales have no affiliate.
- The rest of my ClickBank sales are either to affiliates who only got one sale so far this year, or to people buying through their own affiliate links.
- For each self-affiliate sale that would have been a no-affiliate sale through PayPal (of course, I don't know how many would have paid full price if they didn't have the ClickBank "rebate" option), I lose 44% of my net.
- I earn almost 8% more per non-affiliate sale through PayPal vs. ClickBank
- My affiliates who refer less than $100 in sales a month earn 20% less per sale than if they go through ClickBank.
- My affiliates who refer $100 to $500 in sales a month earn 11% more than if they go through ClickBank.
- My affiliates who refer over $500 in sales a month earn 39% more than if they go through ClickBank.
I haven't made my decision yet, but I thought I'd throw those numbers out since I'm sure there are people who'll find them interesting.
Okay, the welcome DMs are now optional (but the one tweet isn't). There's a checkbox for it on the settings page that you see when you sign in. It'll be interesting to see what percentage of members turn it off...
July 17th, 2009 at 2:43 pm
One final thought -- I'm sure if you're ranked high enough in ClickBank's marketplace, you pick up enough extra affiliates to make going through them worthwhile. But CaRP isn't in that territory (if it we're I'd be seeing a much higher percentage of my sales coming through ClickBank).
July 25th, 2009 at 9:48 am
Update: it's decided -- I'll be dropping ClickBank in a week or so.
July 26th, 2009 at 12:46 pm
It had been a while since I had been to the Gecko Tribe site, and I had a long browse around today.
With Clickbank, you don't have to have a public affiliate program - there are tools such as EasyClickmate from Adrian Ling, one of your competitors on a number of fronts inc bonuses (I own both his and CB Bonus Domination) & RSS.
I like CB as an affiliate, but with the number of leaks your site has to other products, anyone other than someone using an Adsense like script would be a fool to use it.
fauxlowers.com would actually be a fun site if this message didn't appear constantly after signup.
Your membership has not yet been created.
LinContEx.com might be useful, if the Gold membership is unlimited sites, the site gets traction,and it could be used on tag pages, but I have a feeling the trend is 1-way link networks currently.
July 27th, 2009 at 9:56 am
Andy,
Thanks for the comments and feedback. I've fixed the problem on Fauxlowers.
LinContEx Gold membership currently covers unlimited sites as long as they're hosted on the same server.
Your feeds can be on any number of servers, and you could have any number of servers contacting my server to tell it about your exchange pages, but my server will only contact one server per customer to tell them which feeds to display where.
It wouldn't be difficult to overcome the single server limitation by creating a script that sits on the customer server and forwards feed display commands to the server where they're supposed to be displayed...that's on my to do list.
Regarding ClickBank, you are of course correct that without ClickBank you'd want some other affiliate solution. I've built my own that works with PayPal, so I'm not feeling that pain.
July 27th, 2009 at 10:37 am
Had a relook at Fauxlovers now it is fixed. I must admit I am not a fan of anything that sends DMs to followers on my behalf.
On LinContEx the back end seems overly complex. Wouldn't it be better to in some way provide an XML file, which a plugin on WordPress would cache every 24 hrs?
You would also need some way to manage things where ever you happen to log into, thus a system like Disqus (though it has many flaws) might be worth looking at.
I think I might be best off just using CaRP on tag pages
July 27th, 2009 at 11:23 am
Yeah, I knew the auto-DM would be a sticking point for some people. On the one hand, it'll reduce adoption. On the other, it's a vector for viral spread. Tough trade-off.
I've tried to minimize concerns as much as possible by showing exactly what the message will say, making it customizable, and assuring people that only 1 DM will be sent to each person and that DMs will ONLY go to people who follow you AFTER the single auto-tweet.
I've considered adding an option to NOT send the DMs and perhaps the auto-tweet...but wonder if that'd kill any chance at viral spread.
On LinContEx, are you saying you'd want to limit it to ONLY your tag pages? I'll have to add an option to control that kind of thing...
I'm thinking about your comment about the complexity of the backend, and I don't really see it that way. If you were to cache an XML file every 24 hours, for example, you'd use more bandwidth and processing power.
The current system only communicates between your site and mine when you have a new page available for displaying feeds or when a change is made to which feeds are displayed on a page.
This allows for immediate updates, and there's no need to trigger a daily download and parse of an XML file.
As for managing things from wherever you are, I suppose I could have the WordPress plugin display a link (to the blog owner only, of course) to the page for managing exchanges for the page on the blog. Is that what you mean -- a quick way to get from a page to the place where you manage which feeds are shown there?
Again, thanks fore the feedback!
July 27th, 2009 at 2:38 pm
Okay, the welcome DMs are now optional (but the one tweet isn't). There's a checkbox for it on the settings page that you see when you sign in. It'll be interesting to see what percentage of members turn it off...