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You may want to give her more credit. She did a fashion startup for a few years. About the 3-8% affiliate fees, that's not a viable business model. You would h

You may want to give her more credit. She did a fashion startup for a few years. About the 3-8% affiliate fees, that's not a viable business model. You would have to deliver north of 15M dollars to get 1M dollars. Assuming the average ticket is $150, you need 100,000 conversion. The average internet conversion rate is 3%. So you need 3M uniques. That is not very easy to get. Even if you are buying it.

grimen 15y ago
We got 30-40% on each sale. Not sure it's a US issue - in Europe it's 30%+.
- diolpah 15y ago
  Reality from my perspective is somewhere in the middle. We pay between 10 and 15 percent.
- jfarmer 15y ago
  What kind of products were you linking to that could afford a hit of 30-40% against their gross margins?
  - justincormack 15y ago
    One of the reasons why stuff is so much more expensive in Europe than US. The prices are higher, so cash margins per sale still high even if percentage margins might be lower. Now Europe is obviously a place where there is a lot of scope for these businesses.
switch 15y ago
Give her more credit for what? She did a fashion startup for a few years and she never figured out that nearly every luxury company gives 10% to 15% commissions? If she really thinks it's 3 to 8% then she's blissfuly ignorant. She doesn't get the fundamental concept of capturing the starting point. If a site becomes the destination for fashion i.e. where people go to search for the next thing they buy. Then that site can very easily expand into selling that very thing. At some point we say - Instead of getting 15% from this luxury watch maker, we ask for 25%. Then we say - Let's make stuff ourselves and see if we can get more than 25%. What Google is doing and what Facebook is trying to do is very similar. Expand and take over all the profits. But first you need to be the starting point or decision point for something (search, social interactions, dating, buying clothes).
- rokhayakebe 15y ago
  Do you have an example of a site that started as an affiliate and ended up creating its own products? I think this is would be very very difficult.
  - deleted 15y ago
    [deleted]
  - switch 15y ago
    Replace affiliate by middleman and you get a lot of examples. Obviously it's difficult - because everyone's trying to do it and it gives you so much power. Look at what Amazon is trying to do with books and music. What Apple is doing. What Google is trying to do. What Facebook is doing. they are all doing the same thing. Become a middle-man and then try to take up power and start producing stuff themselves. It's why Google is buying content companies. It's why Facebook is a walled web - they want to replace the Internet. Don't focus on her post. Because her post (not her, just her post) is very short-sighted. You don't want to read it and catch the disease of not realizing the real prize. The real prize is not becoming a small service company for the incumbents. The real prize is to take over a part of the supply chain or customer to product pipeline. Then collate all power. It's how Google and the Internet has made most content worthless. That's what all the fashion startups have as their end goal. She can't see it because she's caught in her concept of what fashion should be/could be. As opposed to the real underlying dynamics. In sports terms - she's focused on a particular pitcher vs batter when the real game has a lot more than just how one batter does against one pitcher.
  - switch 15y ago
    Replace affiliate by middleman and you get a lot of examples. Obviously it's difficult - because everyone's trying to do it and it gives you so much power. Look at what Amazon is trying to do with books and music. What Apple is doing. What Google is trying to do. What Facebook is doing. they are all doing the same thing. Become a middle-man and then try to take up power and start producing stuff themselves. It's why Google is buying content companies. It's why Facebook is a walled web - they want to replace the Internet. Don't focus on her post. Because her post (not her, just her post) is very short-sighted. You don't want to read it and catch the disease of not realizing the real prize. The real prize is not becoming a small service company for the incumbents. The real prize is to take over a part of the supply chain or customer to product pipeline. Then collate all power. It's how Google and the Internet has made most content worthless. That's what all the fashion startups have as their end goal. She can't see it because she's caught in her concept of what fashion should be/could be. As opposed to the real underlying dynamics. In sports terms - she's focused on a particular pitcher vs batter when the real game has a lot more than just how one batter does against one pitcher.

grimen 15y ago

We got 30-40% on each sale. Not sure it's a US issue - in Europe it's 30%+.

diolpah 15y ago
Reality from my perspective is somewhere in the middle. We pay between 10 and 15 percent.
jfarmer 15y ago
What kind of products were you linking to that could afford a hit of 30-40% against their gross margins?
- justincormack 15y ago
  One of the reasons why stuff is so much more expensive in Europe than US. The prices are higher, so cash margins per sale still high even if percentage margins might be lower. Now Europe is obviously a place where there is a lot of scope for these businesses.

switch 15y ago

Give her more credit for what? She did a fashion startup for a few years and she never figured out that nearly every luxury company gives 10% to 15% commissions? If she really thinks it's 3 to 8% then she's blissfuly ignorant. She doesn't get the fundamental concept of capturing the starting point. If a site becomes the destination for fashion i.e. where people go to search for the next thing they buy. Then that site can very easily expand into selling that very thing. At some point we say - Instead of getting 15% from this luxury watch maker, we ask for 25%. Then we say - Let's make stuff ourselves and see if we can get more than 25%. What Google is doing and what Facebook is trying to do is very similar. Expand and take over all the profits. But first you need to be the starting point or decision point for something (search, social interactions, dating, buying clothes).

rokhayakebe 15y ago
Do you have an example of a site that started as an affiliate and ended up creating its own products? I think this is would be very very difficult.
- deleted 15y ago
  [deleted]
- switch 15y ago
  Replace affiliate by middleman and you get a lot of examples. Obviously it's difficult - because everyone's trying to do it and it gives you so much power. Look at what Amazon is trying to do with books and music. What Apple is doing. What Google is trying to do. What Facebook is doing. they are all doing the same thing. Become a middle-man and then try to take up power and start producing stuff themselves. It's why Google is buying content companies. It's why Facebook is a walled web - they want to replace the Internet. Don't focus on her post. Because her post (not her, just her post) is very short-sighted. You don't want to read it and catch the disease of not realizing the real prize. The real prize is not becoming a small service company for the incumbents. The real prize is to take over a part of the supply chain or customer to product pipeline. Then collate all power. It's how Google and the Internet has made most content worthless. That's what all the fashion startups have as their end goal. She can't see it because she's caught in her concept of what fashion should be/could be. As opposed to the real underlying dynamics. In sports terms - she's focused on a particular pitcher vs batter when the real game has a lot more than just how one batter does against one pitcher.
- switch 15y ago
  Replace affiliate by middleman and you get a lot of examples. Obviously it's difficult - because everyone's trying to do it and it gives you so much power. Look at what Amazon is trying to do with books and music. What Apple is doing. What Google is trying to do. What Facebook is doing. they are all doing the same thing. Become a middle-man and then try to take up power and start producing stuff themselves. It's why Google is buying content companies. It's why Facebook is a walled web - they want to replace the Internet. Don't focus on her post. Because her post (not her, just her post) is very short-sighted. You don't want to read it and catch the disease of not realizing the real prize. The real prize is not becoming a small service company for the incumbents. The real prize is to take over a part of the supply chain or customer to product pipeline. Then collate all power. It's how Google and the Internet has made most content worthless. That's what all the fashion startups have as their end goal. She can't see it because she's caught in her concept of what fashion should be/could be. As opposed to the real underlying dynamics. In sports terms - she's focused on a particular pitcher vs batter when the real game has a lot more than just how one batter does against one pitcher.