I just do not understand how...

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twisted_one

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I was checking out this FatCow's affiliate program. They pay $100 commission for every sale. This is a flat commission unlike hostgator where they say get us 1-5 sales per month, you get $50 per sale and so on...

What I do not understand is, they charge only $35.80 for a 12 months plan and they say they will give me $100 if I get them a sale. How is this possible? How can they shell out $100 when all they get is just $35.80 out of that sale? Is not that a loss for them?

Someone help me understand the math behind.
 
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They must be shaving leads, also this is a way of promotion at a loss though but eventually your sites will grow big and you might need a bigger server sooner than 1 year or they may charge for every single addon they will put which otherwise should be included with the hosting.
 
If you promote hostgator through commission junction, you get 100 dollars per sale as well. I think they are looking at the long run and are willing to invest now in their affiliates hoping to do long term business with customers referred to them.

Not only do they make money on the hosting, they make money on domains as well. Hostgator charges 15 bucks per domain. Namecheap gives free whois privacy for the first year but charges 12 bucks for the second year. A .info domain is cheap for the first year but you pay the premium price to renew it.

These companies work on the long term business model, hoping that customers will stick with them for years. If they provide a good service, it will happen and they make money.
 
If it sounds too good to be true, it most likely is.

It reminds me of the time when Tim Bekker said he'd pay $1 for each email submit that people send him.

After he received thousands, he simply did not pay.
 
With hosting companies, its usually the fact that the company knows their business well, and knows the lifetime value of a customer.

For example, im with hostgator and have been with them for nearly 5 years now. Not only do I have the original plan, but also bought another hosting package at some stage. So I have already paid them back their $100 or whatever they wouldve given to whomever was lucky enough to get my commision, and, I will be staying with them for years to come.

So in the end it may look like they are making a 'loss' at first, but essentially could be (saying 'could be' because ive never dealt directly with Fat Cow) a company that knows the amount of revenue that each new customer brings them over their lifetime.
 
From the reviews, they seem to be shady when it comes to their affiliate program, you have to go back and forth with the emails to get your commissions.
I'd stick with HG, they are well known and their services overall are more reliable. Also, don't just promote shared hosting, do VPS and dedicated servers promotions to make them happy.
 
You sure? Give me a link please?

jdog37 said:
]If you promote hostgator through commission junction, you get 100 dollars per sale as well.[/B] I think they are looking at the long run and are willing to invest now in their affiliates hoping to do long term business with customers referred to them.

Not only do they make money on the hosting, they make money on domains as well. Hostgator charges 15 bucks per domain. Namecheap gives free whois privacy for the first year but charges 12 bucks for the second year. A .info domain is cheap for the first year but you pay the premium price to renew it.

These companies work on the long term business model, hoping that customers will stick with them for years. If they provide a good service, it will happen and they make money.
Click to expand...
 
Realistically, I believe they're just really confident in their product in believing you will stay with them for a long period of time and might even upgrade your hosting, hell you may even refer a couple of your friend to them once you sign up for their hosting, and if it seems the leads you send them aren't long term , they'll prob just not pay you :chairfall
 
Guys have you ever heard of sales funnel? Read the Hostgator Forums, you will get your answer. And yeah, they do pay unless you fraud them.
 
It's about upsales,competition and long term stuff ;)
 
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