Dell Computer Corp. debuted an affiliate program this week that offers Web-site owners who drive traffic to www.dell.com a 1-percent commission on resulting sales.
The move is “an important part of helping us to realize 50 percent of our sales online by the year 2000,” said Bob Langer, director of Dell.com.
Dell, Round Rock, TX, the top direct seller of PCs, sells more than $14 million in products each day through the Web, accounting for 25 percent of its business. The company launched its affiliate program aiming to bolster its relationships with site owners already linked to Dell.com, while giving others a reason to send traffic the PC merchant’s way, said Stephen Messer, president of LinkShare Corp., the online affiliate-program broker who will manage Dell’s initiative.
“Right now, they’ve got thousands of sites that link to them for nothing,” Messer said. “They recognized that a lot of people are doing a lot of work pro bono and that they needed to find a way to give something back.”
For a cut of sales, LinkShare will set up the links, monitor the traffic between the sites and serve as a trusted third party to track and report how many sales resulted from the relationships each month. Financial details of the agreement were not disclosed.
Though it is impossible to know how many sites are currently linked to Dell, the PC merchant will promote the new affiliate program on its home page to let site owners know of the financial incentive to drive traffic to Dell.com.
“We think word will spread pretty quickly,” Messer said, declining to predict how big Dell’s program will grow or how quickly. “It could be astronomical. I’ve never dealt with a company that does $14 million per day.”
Currently, the two largest affiliate programs are those of Amazon.com, with a reported 230,000 member sites, and CDNow with a reported 207,000. Until recently, many marketers associated affiliate programs mainly with books and CDs or thought of them as an alternative for marketers who are either unable or who don’t want to pay a premium for space on so-called portals like Yahoo and America Online’s proprietary service.
Messer said Dell’s entrance into the affiliate-program arena may make it more of a mainstream selling tool.
“Eighty percent of all Web traffic occurs outside of the portals, and almost no one is taking advantage of that,” he said. And with customer acquisition costs online in the $20 to $40 range, the affiliate model’s pay-for-performance structure may become more enticing as marketers finish the math on last year’s portal deals and begin to figure out how much the real estate truly costs.
LinkShare, New York, said that it has more than 150 clients, including Omaha Steaks and most recently 1-800-Flowers, and that it manages a network of more than 65,000 affiliate sites.
The announcement of Dell’s affiliate program comes on the heels of a recent agreement Dell struck with online bookseller Amazon.com to swap links. Under that partnership, shoppers paying for purchases at Amazon.com and Dell online retail sites will see an icon that, if clicked, will take them to Web pages offering the other companies’ products. Financial details were not disclosed.
Though Amazon.com was an originator of affiliate selling on the Internet, it is not clear if the two developments are related.
According to Messer, Dell did not put management of its affiliate program up for competitive bid.