A number of weeks ago there was an article in NMA where Nick Robertson (the CEO of Fashion retailer ASOS) labelled affiliates as “grubby little people in grubby studios growing income at our expense”. The statement and subsequent interest were covered extensively on a number of affiliate blogs and even on a youtube video. Affiliates were not happy and ASOS were unforthcoming in a statement whilst Nick was apparently out of the country.

Finally Nick has hit back and given the reasons for his comments and a half-hearted apology in an interview with e-consultancy. The whole thing stinks of incredible arrogance and there are a few gems in here to look at:

“I’d like someone to show me a site out there that’s growing not just in terms of top line sales but also in terms of profit [through affiliate marketing]. With some sites, it’s ridiculous. They have an average basket of £25 or so and are paying 15% affiliate commission – they are losing money on those sales so what is the point?”

Let’s look a little more at this. First of all when working out what commission to give affiliates you need to make sure that it fits in with your business model – I would never suggest that a client gives away a higher commission than they can realistically afford and there are plenty of affiliate programs out there that are helping to drive continual business. Even if the first sale is not bringing in the profit it’s fair to say that if the customer service is good, repeat orders will help drive the business forward; I wonder how many regular ASOS customers derived from their initially successful affiliate program?

“What was happening was the affiliates out there had no conception of that. My banners weren’t replaced. My products would be out of stock because they wouldn’t bother using the feeds. It was a horror story. Here was me trying to build a brand. It wasn’t all of them, but a lot of them.”

Yet the program’s product feeds (at least after Jess left) were hardly updated – this strikes me as being an issue of bad management and a lack of understanding rather than something to be blamed on affiliates.

On being asked if they would re-launch an affiliate program (after he stated to the NMA he’d be doing one correctly next year) he answer:

“Right now, I have better uses of my marketing money. In the forseeable future, no. I’m struggling to come up with reasons why we would. The bigger we get, the more questionable it is. Seventy percent of our products are unique, so you can’t get them anywhere else.”

Ignoring the fact that he is going back on what was said just a few weeks ago it would be very interesting for another merchant to come along and offer some similar products; ASOS made a name for themselves and did so with help from affiliates who were driving 30%+ of their sales just a few years ago; the tables can quite easily turn and heaven forbid if they do – I’m not sure that affiliates will be so forgiving in the future.

Overall I’d say that ASOS have shown by their comments that running an affiliate program is not always easy; it needs care and attention and someone that has a strong knowledge of the industry to help push a program forward and make sure they don’t end up in a similar situation. Building long term relationships will help build a long term brand but make sure that if that’s something you are looking to do, you don’t emulate the bad management that Nick has shown on this occasion.

As a side point, If you’re looking for an affiliate management solution for your business then please feel free to get in touch with us.

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