A number of folks have asked about why our Product Portals perform as well as they do. How can it be a that a site makes little to nothing on a parking network, Amazon store, or Shopping.com store, and then months later on Epik dramatically more? There are a number of reasons that are worth understanding for anyone considering how to monetize product category domain names.
Amazon is an oligopoly — and they pay their affiliates accordingly: low and slow
As a consumer, I love Amazon as much as the next guy. They have simply nailed it. However, as an affiliate marketer, they are burning the bridge with publishers. Amazon’s market power is impressively dominant to the point of being an oligopoly. As a result, they dictate the price of traffic by lowering revenue share, shortening cookie life, excluding transactions, and extending payment terms. Sure, historically, Amazon paid well. No longer. Today, the only folks that pay lower than Amazon is Shopping.com.
To Amazon’s credit, they made it incredibly easy to build stores around their Amazon affiliate feed with structured data, simple widgets and a robust API. As a result, large numbers of solutions emerged, including do-it-yourself solutions, that are built around Amazon’s feed. Associate-o-matic is among the better known solutions. Beyond Amazon’s rapidly plummeting payouts, there are two major problems with these Amazon-centric stores:
- The content is not original: Publishers have reported difficulty in maintaining indexing and ranking for sites that relied primarily on the widely syndicated Amazon affiliate content. The search engines recognize the content as not original and have little reason to rank it.
- You are training consumers to go to Amazon: If you build on Amazon, the consumer checks out on Amazon. Congratulations, you have just trained another consumer to shop at Amazon. Amazon has little incentive to buy the resulting site. After all, they are already getting all of the traffic along with the repeat business.
The one big downside of not relying on Amazon’s feed is that it is a lot more work to find products that match a given domain name. This is a short-term downside that is more than offset by the long term upside of sourcing products from affiliates that pay a competitive rate for traffic.
Epik’s network-wide average CPC in May was $0.18
The Epik portals are monetized on a pay per click basis. A typical visitor will actually click on several product listings, each one of which is treated as a click. As a result, a single visitor can rack up several dollars worth of revenue. During May, the average revenue per click was $0.18. I have seen Steve Barclay’s Spoons.com rack up some of the highest revenue per visit of any site on the Epik network. It had 8812 visits in the past 30 days. You can track the progress here.
Building a proprietary affiliate network is hard work. In addition to having secured one of the highest paying CPC networks for online retail, we also pay out on the 20th of each month and with increasing revenue shares for higher performing portfolios. A big reason why we were able to build this out as quickly as we did is because of our exclusive relationship with Seattle-based Wishpot.com — a group that I and others venture-backed in 2007. When Epik partnered with them, Wishpot had already spent 3 years and significant resources to build a shopping comparison network with high revenue share. This capability is a core component of the Epik Product Portal platform.
Looking ahead, because of the rapidly growing transaction volume, Epik’s ability to negotiate with affiliate networks is improving. We are in discussions with additional affiliate networks that are likely to push the average yield into the range of $0.24-30 per click. The final step will be to enable advertisers to directly buy CPC from the network. So, for example, we often hear from advertisers who want to list their products on our sites. At the moment, we can sell advertising and sponsorships. In a few weeks, we’ll release technology previously developed by Wishpot that will allow advertisers to upload their product listings and pay for traffic on a CPC basis.
Bottomline: Where’s the Beef?
When evaluating solutions for product portals, looks beyond the homepage and the short-term SEO tricks. Pay particular attention to how the resulting traffic is monetized in a way that actually benefits the publisher of the site as opposed to the downstream seller of the product. In other words, “Where’s the Beef?”.