Hi, There are tons of companies doing it. Say for example hosgator. They pay $100 for every client you bring for them. Say a customer bought a baby plan for 8.95/monthly plan [paying every month] Then they have to pay the affiliate $100. Isn't that a loss? Even if the client stays for a year, the hosgator earning would be 107.4 - $100 = $7.4? i.e. $7.4/year hosting. Unlimited space and bandwidth. How can they pay without cheating affiliates?
Am also wondering how do they survive..what if we refer a member and he signs up nd he shifts to another company after 7 months,they wil be in a total loss.
Well, even I don't understand that thing but they pay in reality ! I also got my payment from them as an affiliate. I was also thinking that how come they pay that much - Digital -
They do pay for the affiliates... they will get their profits from second yr onwards. Most of the clients stay forever with them if are comfortable with the provider
Bandwidth and storage is inexpensive theseday so having additional accounts do not cost a whole lot specially for shared hosting, and from 2nd year on if the account stays on.. its gravy.
Pretty much. You also have addons like domains, SSL and account upgrades. (I know Hostgator doesn't do larger accounts but most others do.) That's why many of these hosts jam 500+ clients on a server as well.
There is only one way, they earn from other charges like changing primary domain $5 and various other addon charges they have. Then pay extra for some other service etc. or I read many complains online about hostgator not paying correctly. if you google it, you'll find that many a times an affiliate tells his friend to buy an hosting account and even when the friend buys it, hostgator don't show the conversion? When asked to them, they say that only last link entry counts and that the friend have might accidently clicked, so the commision went to some other affiliate [no one knows who]. It's not just hostgator, but many other big hosting companies might do. You were definately paid, but what if you were paid for one sale instead of two. like every two sale, they might just pay one. Earning from second year, means a company is simply rolling the money and growing, not a good way to do business coz there will be lots of problem like clients leaving in between, which may make these companies reach there breakpoint, the company will not be able to develop assets and it would be like a giant elephant company just rolling until a day it reaches dead end and breaks like those network marketing company. [pyramid method]. I doubt hostgator would run there company like that. General Motor's was probably a company like that, a big company with a wrong business plan and then sucking tax payers money. Infact, thse affiliates have corrupted the entire hosting market. Tell me one genuine hosting review site which don't use affiliate code, hardly 1%? I know many hosting people at dp including [HostLuck.com] which I promote don't charge for changing the domain and many other small things. The big hosting company also keep the tos, such a way that you can never use the entire hosting account and there are so many hidden charges. Aren't the hosting company fooling affiliates, coz there got to be some maths behind there high commision and it cant be except cheating affiliates and these affiliates furthur cheat users by making writing false review and creating thousands of sites so they can earn. Affiliate market is not wrong, but I guess there are no longer people doing business with ethics. What you guys think? Am I missing something?
Another thing to remember is that the money is going to be spent anyway, it's just going to another direction. If it wasn;t for affiliates, they would have to be spending the money on additional commercials, print and web advertising, etc. This way, someone else is doing all the work for them. And not every client signs up via an affiliate link.
Yes, you're right. But the problem is nor marketing or even making other work and help them earn. It's business after all and a good thing that everyone can help each other and earn. The problem is the way they promote hosting plans, everything unlimited, there is no such thing as unlimited bandwdith and disk space or probably google should host with hostgator for $8.95/month. Or the way they run affiliate campaign, it would be rare for a client to directly land at hostgator, he will definately read a review and this would definately lead to hostgator aff link. Anyway, the affiliate system is to help them earn more, so they wont go at loss in affiliate system and then compensate with who buy direct. better cancel affiliate system then. So they need to pay for half the commision or pay less someway so they can profit from it. And there is no way you can actually say how many conversons you had. You might be able to count just the clicks. Isn't misleading customer's wrong? Isn't cheating affiliates wrong? P.S. This are just assumption and views, I am as confused as you.
Honest answer: I don't worry about it. What they do is what they do and what we do is what we do. Most of our clients have come from other hosters and I hear horror stories all the time. I seriously doubt that every client goes to them via an affiliate link. And even if they did, what kind of affiliate link are we talking about? I know adsense doesn't pay $100 for a click for hosting. It's up there but it's not that much. We don't use an affiliate system for our hosting but I'll credit an account for like 6 months if they refer someone. The unlimited bit is just a gimmick anyway. If a client starts overusing their resources, they get run off and their account closed. Go visit the wordpress multiuser forums and search for hosting there. Lots of stories. Most of those unlimited hosts are trying to put 500+ clients on a poor box usually anyway. I have damn decent boxes and I only place 225 on each one.
Oh yeah, they do pay well (HostGator) = $125. I am with an affiliate program that requires people to get their own domain if they want to brand the product. Thus, my referrals sign up under my HostGator affiliate link. Imagine getting 5 signups/day = $625 a day!
Just something else I found about another popular web hosting company webhostingpad.com. They have 3 years hosting price as $1.99/mo. For 36 months the price is 71.64. They claim to pay affiliates $75/ per sale. Just WoW!
Do remember that the customer has to pay that $71.64 all at once at the beginning of their contact to get that rate. I seriously doubt they'll have that many takers for that. Also read the fine print. They can withhold payment for up to 12 months from you if they have any question about the client
The fine print was a nice find, I missed it too. Waiting 12 months is just dumb! I came to this conclusion until I find some furthur info, that these companies might be paying in the ratio of half. Like pay once for a double sale. This is the only way, they can survive. Some might even have a 1/3rd ratio.