Is ClickBank Missing a Huge Opportunity?

Banned 12 years ago

Originally Posted by keyon

I'm a vendor for ClickBank, and a few days ago I contacted them about selling physical products instead of downloads. I got a reply saying that ClickBank has a "shippable media" program, which allows for items "like DVDs and CDs." The problem for me is that the physical product I want to sell isn't a DVD or a CD. So I asked them to clarify their guidelines, and they replied saying that I can sell a physical product -- but "non-media" products are not allowed.

I find this restriction a little puzzling. The online demand for non-media hard goods is of course a multi-billion dollar industry, primarily controlled by large, super-retailers like Amazon and Ebay. Considering how successful ClickBank has been in creating a new marketplace for media products, why couldn't it do the same with hard goods?

Is it because ClickBank doesn't want customers getting broken or defective merchandise? That doesn't make sense, considering that DVDs and CDs are far more likely to be delivered broken or defective than most hard goods sold online (like sweaters and shoes).

Is it because ClickBank thinks "media" products present less risk of liability for injuries? That doesn't make sense either, since "information products" can be just as deadly to consumers as hard goods (eBook: lose 50 pounds in 3 days?).

ClickBank hasn't really given me a good reason why I'm allowed to sell a book about shoes but not the shoes themselves.

Anyone have any ideas what's behind the restriction? Seems like they are missing a huge opportunity.

Because they exist to sell virtual products. Plain and simple, stop overthinking it. What is your mission statement?

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12 years ago

Originally Posted by IMDESTROYER

Because they exist to sell virtual products. Plain and simple, stop overthinking it. What is your mission statement?

Yeah...and at one time Amazon existed to sell books.

Cmon everybody....try thinking outside the box just a little :-)
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Malcolm Thomas

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12 years ago

Originally Posted by IMDESTROYER

Because they exist to sell virtual products. Plain and simple, stop overthinking it. What is your mission statement?

This. Selling information products is Clickbanks business model. they choose to specialize in selling a certain type of product and they are very successful at what they do.
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12 years ago

Their guidlines if you had read them state that all shippable physical products must include the free downloadable version along with them. So if your product cannot be downloaded freely online in the first place, it is against their TOS.

You might want to try Amazon or ebay, a service where shipping physical goods is their business model.

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Banned 12 years ago

Originally Posted by Derek S

Their guidlines if you had read them state that all shippable physical products must include the free downloadable version along with them. So if your product cannot be downloaded freely online in the first place, it is against their TOS.

If it's true, it's true. But I've certainly never heard of this, and I can't immediately understand why it would/should be so. And I can't find it in their Terms Of Service, either.

Do you have a link, please, Derek?

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12 years ago

Originally Posted by Alexa Smith

If it's true, it's true. But I've certainly never heard of this, and I can't immediately understand why it would/should be so. And I can't find it in their Terms Of Service, either.

Just checked it over and it seems that with ClickBank's recent changes they also changed their policy on shippable media! The old policy made you include the digital version and pretty much stated that refunds would be given when asked for if customers return their physical purchase or NOT!

Maybe I should be looking for a printing company this week

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12 years ago

Originally Posted by Derek S

Just checked it over and it seems that with ClickBank's recent changes they also changed their policy on shippable media! The old policy made you include the digital version and pretty much stated that refunds would be given when asked for if customers return their physical purchase or NOT!

This is not correct.

The whole point of shippable media is that the physical product must be returned in order to get a refund.

What you are thinking of is this

"You may also offer shipped delivery of printed media (books, CD's, and DVD's) as a courtesy to qualified customers, provided the shipped media is clearly complementary and not essential to the operation of the originally downloaded digital Product."

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12 years ago

Why don't McDonalds sell pizzas? Aren't they missing a huge opportunity?

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12 years ago

Because selling digital media is way easier and more profitable than selling hard goods? I would hate to sell physical products because it just seems like a huge head ache. Just because it's a big industry doesn't mean it's worth pursuing.

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Joan Altz

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12 years ago

CB is established in what they do and to set themselves up as what you are suggesting would require a lot more repositioning than you think.
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12 years ago

Originally Posted by Gonzosan

Because selling digital media is way easier and more profitable than selling hard goods? I would hate to sell physical products because it just seems like a huge head ache. Just because it's a big industry doesn't mean it's worth pursuing.

The only thing that ClickBank delivers to its customers is a vendor's website page. The type of product that a vendor provides on that page has no effect in making ClickBank's role in the transaction "easier" or "more profitable."

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keyon

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12 years ago

Originally Posted by WillR

Why don't McDonalds sell pizzas? Aren't they missing a huge opportunity?

Well, if I remember correctly, McDonalds used to sell hamburgers and fries. Last time there I had a chicken teriyaki salad, a fruit & yogurt parfait, and a latte.
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- agmccall
  
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  12 years ago
  
  Originally Posted by keyon
  
  Well, if I remember correctly, McDonalds used to sell hamburgers and fries. Last time there I had a chicken teriyaki salad, a fruit & yogurt parfait, and a latte.
  
  But, did they offer Pizza?
  
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  12 years ago
  
  Originally Posted by agmccall
  
  But, did they offer Pizza?
  
  haha :-) that's funny.
  
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wisdomoto

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12 years ago

Originally Posted by WillR

Why don't McDonalds sell pizzas? Aren't they missing a huge opportunity?

Exactly, it's just not their business model. They are in the business of information products. This is also what they are known for.

Selling physical products is a whole new ball game. They are sticking to their own niche and doing that well I'd say
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12 years ago

Originally Posted by WillR

Why don't McDonalds sell pizzas? Aren't they missing a huge opportunity?

We never know, a few years ago it was impossible to think salads and fruits in a McD.

G.
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12 years ago

Clickbank only allow & sell Digital products. I will Suggest you to go for Other Options for selling Physical products like Bigcommerce etc.

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12 years ago

try thinking outside the box just a little

Problem is - you are thinking outside someone else's box.

CB serves a purpose - a place for sellers to list digital goods that can then be sold by thousands of affiliates.

If what you want is a marketplace similar to CB that handles physical goods, ShareASale may be what you need.

ClickBank hasn't really given me a good reason why I'm allowed to sell a book about shoes--but not the shoes themselves.

They said "we don't do that" - why would they need to explain further?

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12 years ago

Originally Posted by Kay King

They said "we don't do that" - why would they need to explain further?

Wow. I feel like I've insulted this forum :-)

I was just curious if ClickBank had any specific reasons for excluding non-media products. I'm not ragging on them. I like their business model.

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12 years ago

Originally Posted by keyon

Wow. I feel like I've insulted this forum :-)

I was just curious if ClickBank had any specific reasons for excluding non-media products. I'm not ragging on them. I like their business model.

No one thinks you have insulted anything or anyone.

We are just simply saying that it's not their business model and thus why they do not sell them. Just like the Warrior Forum doesn't have a section for talk about Golf.

You can't be everything to everyone. A lot of times you will be more successful by just being great and well known for one thing. Clickbank are well known as one of the biggest digital marketplaces online.

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12 years ago

I was just curious if ClickBank had any specific reasons for excluding non-media products. I'm not ragging on them. I like their business model.

I think there would be many reasons. Warehouse space, stocking and the employees and systems needed for order fulfillment. Returns, customer service requirements, etc.

Commission paid on CB products is many times higher than the percentage paid by sellers of physical products. You can inflate digital goods to provide a high commission - can't do that with physical products if you want to sell at a competitive price.

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12 years ago

Originally Posted by Kay King

I think there would be many reasons. Warehouse space, stocking and the employees and systems needed for order fulfillment. Returns, customer service requirements, etc.

I'm not suggesting that ClickBank actually stock and ship physical orders. I would collect a customer's shipping address after the sale and complete the order from my end.

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Stephen Williams

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12 years ago

If you want to sell a book about shoes, clickbank will do that great.
If you want to sell the actual "shoes" eBay, amazon, and about ten million other company's allow you to do that to a larger audience.

Why you think clickbank should suit every need is just not logical to me.
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12 years ago

Originally Posted by keyon

I'm not suggesting that ClickBank actually stock and ship physical orders. I would collect a customer's shipping address after the sale and complete the order from my end.

That is just a payment processor.

You can use any number of services that will process a financial transaction if you are handling everything else.

I know you are just asking, but what model do you envision for a CB physical product option?

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12 years ago

Originally Posted by onSubie

You can use any number of services that will process a financial transaction if you are handling everything else. I know you are just asking, but what model do you envision for a CB physical product option?

I understand that CB considers itself a "retailer," technically speaking. But the fact remains that CB's role is mostly about bringing vendors and affiliates together and then completing the financial transaction between those two parties. With CB's current business model, vendors are already "handling everything else" -- that is, in regard to delivering the actual product to customers. The model I envison for CB is exactly the same model they have today -- less the policy restriction against non-media goods.

Hope that makes sense :-)

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12 years ago

If i was clickbank i would hold the same restriction too. They make millions anyway so they aren't hurting.

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12 years ago

Originally Posted by Randall Magwood

If i was clickbank i would hold the same restriction too. They make millions anyway so they aren't hurting.

You could also say that Amazon wasn't "hurting" too much in 2004 when they made 6.9 billion dollars that year. But when the company starting thinking outside the box a little (adding new product lines, developing the Kindle, etc.) revenue grew to 34.2 billion dollars in 2010.
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12 years ago

Maybe you didn't read carefully enough where they explain their business model: you are NOT selling anything on CB. Actually, what happens, they buy from you the product as a "wholesaler" and then they will distribute it as a "retailer". It's there in the agreement...

So, in the case of the digital downloads they have to keep only ONE copy of each product and that, due to the nature of digital things, can be downloaded zillion times. With physical products that - one single copy - wouldn't work.

It would require the overhaul of their whole system and policy and business setup. They don't want that, even if you insist about it

(re: your post above: you completing the order would mean they are not the wholesale buyer and the retailer anymore...)

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12 years ago

Originally Posted by Istvan Horvath

So, in the case of the digital downloads they have to keep only ONE copy of each product and that, due to the nature of digital things, can be downloaded zillion times. With physical products that - one single copy - wouldn't work.

Hmmm.....am I missing something here? With my vendor account, both the "thank you" page (that ClickBank sends its customers to after making a purchase) and the product itself (PDF download) reside on MY web server--not ClickBank's. I'm not aware of ClickBank keeping a "copy" of anyone's product and/or distributing that product themselves. Am I wrong about this?

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12 years ago

If you read the 'About Us' page on Clickbank's website, you'll see the reason Clickbank came about and what their intention has always been...

In the mid-nineties, Tim recognized that the rapid adoption of the Internet would enable an explosion of websites and digital content.

As a result, the Internet would become increasingly noisy, making it more and more difficult for niche audiences and digital content producers to connect. At the same time, he saw that while the Internet could enable commerce between entities and individuals around the globe, the lack of trust and fear of fraud would be significant gating factors to realizing the full potential of electronic commerce.

In 1998, Tim, along with Eileen Barber and Geoff Hoyl, founded ClickBank. From the company’s early beginnings of operating out of the Barbers’ garage and addressing commission checks from their kitchen table, ClickBank has seen significant growth over the past decade and a half. ClickBank continues to operate and grow by enabling entrepreneurs to sell, and customers to buy information online, securely.

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kindsvater

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12 years ago

The policy from the outset has also helped ClickBank avoid sales tax issues.

If you want to sell physical products there are plenty of places to sell. ClickBank has done fine in its niche market. There might be a lesson here: focus on one thing and be great at it, instead of getting distracted with "huge opportunities."

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  12 years ago
  
  Originally Posted by Derek S
  
  Their guidlines if you had read them state that all shippable physical products must include the free downloadable version along with them.
  
  Is that true ?
  
  I can't see a mention of it at
  https://support.clickbank.com/entrie...-Your-Products
  
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12 years ago

You know why? Because selling physical products is not very profitable, but selling digital ones is.

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12 years ago

As soon as I read the OP, I just thought of their current model of being a reseller for digital products rather than being a payment processor which what people often assume they are.

Applying that model to physical goods basically turns them into a sort of Amazon and that's a whole new ballgame. The expense involved would be gargantuan.

Cheers,

Neil

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12 years ago

I would collect a customer's shipping address after the sale and complete the order from my end.

You think CB should be a drop ship agent? Or is your argument changing?

It means CB would have to trust that YOU, as a remote seller, would deliver (in a timely way) the exact product (size, color, style) ordered through its site. CB would have no control over shipment or stocking or packaging - but would have to sort out refund requests and complaints from customers.

Why would a company that dominates it's special niche in the digital products area want to take on that kind of risk? Add in competition from serious players like Amazon with inventory and merchant control - can you really argue this would be a good idea?
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  12 years ago
  
  Originally Posted by Kay King
  
  It means CB would have to trust that YOU, as a remote seller, would deliver (in a timely way) the exact product (size, color, style) ordered through its site.
  
  I think ClickBank already has to trust me that I will deliver what the customer ordered. As I mentioned in a previous post, the thank-you page (where customers download the product) resides on my web server, not ClickBank's.
  
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12 years ago

Yes, but "by everything else" I mean.

Refunds- Currently, Clickbank handles the transactions and refunds. That is easy with a digital product, they just refund. In the case of a physical item, they need to manage the actual return of an item.

Shipping- Even if they simply provided an interface for you and a customer to share order tracking through their system, that is a lot of maintenance on their part and no help to you and the customer who would also have to track the 'actual' shipping through UPS or whatever other method was used.

Disputes- How will they handle disputes? Right now it's easy: pick a side and refund or not. With a physical item to return, this becomes more complicated.

Margins- How are physical product sellers going to manage margins when they need to share with affiliates?

Clickbank takes about 8% of retail + fees. Can physical product margins afford to lose 8% off the top + fees? And how do you cut affiliates in after that?

Managing Affiliates- That is the core of Clickbank's business. I don't see how they could do this with the above issues. An affiliate sells a disputed item. Customer claims it was never received, affiliate confirms he made the sale, you confirm it was shipped. Next?

Does Clickbank resolve all that or do they wait for it to be resolved with UPS before they take action?

Or are you saying that Clickbank should 'expand' its business to include a 'non-affiliate' model, selling physical items, with order tracking/shipping and dispute resolution?

Your first post made it sound like you think everything is almost already there and they just need to add the ability to sell physical products.

But what they do have, managing digital product delivery and affiliate sales, they can't use with your model.

And what they would have to add for managing shipping/receiving/disputes seems like a lot of changes to a system that has nothing in place.

If you think they could just put in a cursory interface to facilitate communication then they run into huge problems competing with other merchant account services.

It's not like they are only offering ebooks and you're asking, "Why can't I sell software?"

You can hedge about details and what 'types' of physical products would be allowed, but that just adds more complications to a problem Clickbank doesn't need in the first place.

It just seems like a question that sort of answers itself when you think about it.

Are you asking because there are few other options in the marketplace? For me, Amazon and eBay come to mind.

Or does it just seem like it would be easy and lucrative?

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12 years ago

Originally Posted by onSubie

Yes, but "by everything else" I mean...

I don't mean to beat this topic into the ground (oops, too late!), but I think you're overlooking the fact that ClickBank DOES in fact allow vendors to sell physical products -- DVDs, CDs, etc. -- just as long as the item is "media related." That means ClickBank is okay with any possible issues that might come up in regard to refunds and disputes with physical products. It's all spelled out here:
https://support.clickbank.com/entrie...-Your-Products

In regard to margins, you're right that most physical products don't generate the same kind of exuberant profits that come with digital goods, but that doesn't mean physical products can't be profitable for both vendors and affiliates. It depends on the product. For example, some of the physical products I sell have a retail price that is 80 percent above cost. I think that would leave plenty of room for everyone to make a profit (CB, vendor, affiliate).

Some people have suggested I simply take my products to Amazon and Ebay -- but of course this is not the same kind of marketplace. Affiliates for these retailers hardly have the same fervor as ClickBank affiliates to drive a sale, and who would for a measly 4 percent commission? I'm looking for a marketplace where I can give affiliates 40-50 percent commissions--on non-media physical products. So far I don't know of any place where this is possible.

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12 years ago

Originally Posted by keyon

Some people have suggested I simply take my products to Amazon and Ebay -- but of course this is not the same kind of marketplace. Affiliates for these retailers hardly have the same fervor as ClickBank affiliates to drive a sale, and who would for a measly 4 percent commission? I'm looking for a marketplace where I can give affiliates 40-50 percent commissions--on non-media physical products. So far I don't know of any place where this is possible.

Physical products have nowhere near the same kind of markup as digital products and thus why you would never get retailers willing to pay you the same sort of commissions for physical products.

You'll be VERY hard pressed to find anyone selling physical products that would be willing to pay you anywhere near 40-50% commissions. Not only is the markup much smaller but you need to take into account all of the other expenses involved in them getting a physical product out to a customer -- warehousing, labor, packaging, shipping, etc. If they were paying you half the sale then in a lot of cases they would probably break even or lose money.

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12 years ago

Originally Posted by WillR

You'll be VERY hard pressed to find anyone selling physical products that would be willing to pay you anywhere near 40-50% commissions.

I guess that makes me unique. I'm willing to pay 40 percent commissions on a couple of my physical products. I just need a marketplace (like ClickBank) to reach affiliates who might want to do business with me. I'd be happy to offer my own affiliate program, but I think most affiliates want to work with a third party to handle the transactions.

Truth is, most manufacturers and wholesalers have greater margins to work with than you might think. My impression is that they only know how to do it one way -- the same way they've been doing it for the last 100 years. I started dabbling in the physical goods world a few months ago, talking to manufacturers, wholesalers, retailers -- and most don't even know what the word "affiliate" means. So to clarify my original post -- maybe I should be asking "is the physical goods retail market missing a huge opportunity?"

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12 years ago

Originally Posted by keyon

I guess that makes me unique. I'm willing to pay 40 percent commissions on a couple of my physical products. I just need a marketplace (like ClickBank) to reach affiliates who might want to do business with me. I'd be happy to offer my own affiliate program, but I think most affiliates want to work with a third party to handle the transactions.

There are lots of affiliate networks for physical products. Try Shareasale.

Andrew

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12 years ago

Originally Posted by rondo

There are lots of affiliate networks for physical products. Try Shareasale.

Thanks....I'll check it out!
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12 years ago

Originally Posted by keyon

Seems like they are missing a huge opportunity.

Obviously they don't think so, or we wouldn't be having this conversation.

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12 years ago

As far as I'm concerned...ClickBank can do no wrong...

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12 years ago

It's 2013, who even uses CB anymore?

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