November 10th, 2009 Add Your Comments Bookmark and Share

I’m not afraid to admit when I’m wrong and I was definitely wrong about the latest set of changes to the eBay Partner Network. I’ll stand by some of what I said though and that is that the job of any affiliate is to get the prospect to the merchants website. Customer retention and long term value from that customer are the job of the merchant and you can’t hold affiliates to count for that.

However the changes made over at EPN which have resulted in a pay per click model have in fact worked out in my favour. I’m now making 3x the money I was making when it was all based on winning bidders. I really wasn’t expecting the EPC to be as high as what it has been and I’ve been doing my best to analyse where it’s coming from. From what I can gather it seems to be that because I’ve stayed away from cookie stuffing (I’m assuming a lot of cookie stuffers have found their earnings with eBay crash?) there is reward in honesty. It could also be to do with that fact that some of the products I promote on eBay are very high value, very low volume. The clever thing with their new system is that it seems to assign a value per click across your whole account. Maybe it’s those high value goods (with great conversion rates but very low clicks) that have pushed the amount I get per click up. On the other side I also have several low value but very high volume niches that I promote. Combine the 2 and it’s working out very well for me. The proof in all this will be how long the good times last, I suppose as long as eBay are getting value out of the realtionship then there isn’t any incentive for them to change things AGAIN. Fingers crossed anyhoo.

Why Affiliate Marketing From The UK Is Crap

The second thing I wanted to talk about was the nightmare that is trying to make money from affiliate marketing in the UK. The big issue here is the currency markets, bank fees and PayPal rapage. Let me give you a quick example:-

I deposit funds into my paid traffic source, $500 at an exchange rate of 1.55 (the mid rate was 1.62 but PayPal rapage gives me that rate instead). This costs me £322.58.

Over the next 4 weeks I make a 130% return on that traffic and pull in $650 in affiliate sales. I think most small-medium scale affiliates would be happy with that 30% profit?

Now comes 1 of 2 scenarios, I get paid, but it can either be via PayPal or straight to bank. Let’s do PayPal first:-

Over those 4 weeks the exchange rate has slipped, as it always does, doesn’t seem to matter how good the reports out of the US are or how bad the reports from the UK are it still slips. The mid rate is now 1.67 but PayPal aren’t going to give me that, PayPal rapage dictates that I’ll get 1.72 instead. So I get £377.90 paid in to my PayPal account (assuming I’m not paying the fees as well). At the end of the day my profit level is hammered. I make a paltry £55 after risking £322. This is best case scenario not taking into account any PayPal fees.

The second case is that I get that money paid into my bank account. The merchant or network pays $650 into my sterling bank account. We’ll use the same mid rate of 1.67 but my bank wouldn’t give me that. Instead they’ll give me 1.70, not as bad as PayPal. So the actual amount that hits my bank account this time is £382. BUT it’s a US dollar amount and that means fees. Let’s call it £10. So that gives me a total of £372. I’ve made £50 on a £322 risk.

Those 2 situations above are pretty much best case as well. There are merchants that only pay by US dollar cheque, there are merchants that expect the affiliate to cover the bank transfer fee and PayPal fees. It all eats into your margin. I should also add as well that you have the payment cycle on top. In reality (the above is made up) you’ll not usually get a return on the money you pay out for at least 2 months. Then there’s the case that you’ll usually be promoting offers from different networks and merchants so multiple payments with multiple fees. It all adds up to make it a bloody nightmare to make any sort of decent money from the UK by buying traffic.

So what to do? Well for me I’m sticking to free traffic or where I do pay for traffic on promoting UK based businesses. There’s also the option of setting up a US dollar bank account but even doing that involves all sorts of extra fees. UK banks just don’t like dealing with foreign currencies and US based merchants and affiliate networks just don’t like dealing in anything other than US Dollars. Combine the 2 with an ever weakening dollar and what you end up with is a shit ROI.

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Paul B