Affiliate marketing has created countless success stories, with marketers and companies generating substantial income by promoting products and services online. However, not all affiliate programs are success stories. Some have failed miserably despite having solid products or promising initial growth. Understanding why affiliate programs fail can provide valuable insights for affiliate marketers and help them avoid similar pitfalls when choosing programs to promote.
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In this article, we’ll explore real examples of failed affiliate programs, analyze the reasons behind their downfall, and offer practical guidance on how to choose the right affiliate program. By learning from these failed affiliate programs, you can increase your chances of building a profitable and sustainable affiliate business.
1. Overstock’s Affiliate Program – Poor Commission Structure and Payout Issues
Overstock.com, a major online retailer known for discounted home goods, launched an affiliate program that initially attracted many marketers. However, the program quickly faced backlash from affiliates due to poor commission structures and delayed payouts.
Why Overstock’s Affiliate Program Failed:
- Uncompetitive Commission Rates: Overstock offered a low commission rate (as low as 1%–2%) compared to similar e-commerce platforms like Amazon, which offered up to 10% on certain product categories.
- High Payment Thresholds: Affiliates had to reach a high minimum payout before receiving their earnings, which discouraged smaller affiliates.
- Delayed and Inconsistent Payments: Overstock’s reputation was damaged by reports of late payments and lack of transparency in tracking sales.
Lessons Learned:
- Choose affiliate programs with competitive commission rates that reflect the value of the products being sold.
- Ensure that the payment structure is transparent and that payouts are reliable.
- Research affiliate reviews and feedback before committing to a program.
2. Apple’s iTunes Affiliate Program – Reduced Commissions and Market Shifts
Apple’s iTunes Affiliate Program was once a highly popular choice for affiliate marketers promoting music, apps, and digital content. However, in 2018, Apple drastically cut its commission rates from 7% to 2.5%, which caused many affiliates to abandon the program.
Why iTunes’ Affiliate Program Failed:
- Sudden Commission Cuts: The dramatic drop in commission rates made it unprofitable for most affiliates.
- Market Shift to Streaming: As consumers shifted from digital downloads to streaming services like Spotify and Apple Music, the demand for app and music purchases declined.
- Poor Affiliate Support: Apple failed to provide adequate communication or support for affiliates affected by the changes.
Lessons Learned:
- Affiliate programs tied to declining markets or shifting consumer behavior can become unprofitable.
- Monitor market trends and pivot to programs that align with emerging consumer habits.
- Ensure that affiliate programs offer long-term stability and don’t frequently alter commission rates.
3. Jet.com’s Affiliate Program – Lack of Merchant Support and Business Model Shift
Jet.com, an online retailer positioned as a competitor to Amazon, launched an aggressive affiliate program that initially promised high commissions and generous incentives. However, after Walmart acquired Jet.com in 2016, the affiliate program began to deteriorate.
Why Jet.com’s Affiliate Program Failed:
- Reduced Merchant Focus: After the acquisition, Jet shifted focus toward integration with Walmart’s ecosystem, reducing support for its independent affiliate program.
- Affiliate Terms Changed Overnight: Commission structures were reduced, and many affiliates were dropped without warning.
- Limited Product Selection: As Jet’s catalog shrank post-acquisition, affiliates had fewer products to promote.
Lessons Learned:
- Programs tied to companies undergoing mergers or acquisitions can face sudden changes in strategy.
- Diversify your affiliate income sources to avoid relying on a single program.
- Look for programs with stable business models and consistent merchant support.
4. Blue Apron’s Affiliate Program – Market Saturation and Declining Demand
Blue Apron, one of the first major meal kit delivery services, launched an affiliate program that initially gained traction due to the growing interest in meal kits. However, as more competitors entered the market, Blue Apron’s business model started to struggle.
Why Blue Apron’s Affiliate Program Failed:
- Market Saturation: The meal kit industry became highly competitive, with companies like HelloFresh and Home Chef offering better pricing and variety.
- Declining Customer Retention: High customer acquisition costs and low retention rates led to financial strain on Blue Apron.
- Reduced Affiliate Payouts: As profitability declined, Blue Apron reduced its affiliate commission rates to cut costs.
Lessons Learned:
- Choose affiliate programs in growing markets rather than saturated ones.
- Evaluate customer retention rates — high churn rates can signal trouble for long-term affiliate earnings.
- Monitor market competition and adjust your strategy as needed.
5. Fabletics’ Affiliate Program – Poor Conversion Rates and Tracking Issues
Fabletics, a popular athletic wear brand co-founded by Kate Hudson, launched an affiliate program with promising incentives. However, affiliates quickly reported problems with the program’s tracking and customer conversion process.
Why Fabletics’ Affiliate Program Failed:
- Poor Conversion Rates: Affiliates reported that despite generating traffic, few visitors converted to paying customers due to Fabletics’ complicated membership model.
- Tracking Errors: Sales were often not credited correctly, leading to disputes over commissions.
- Lack of Affiliate Support: Affiliates struggled to get responses from Fabletics’ affiliate management team.
Lessons Learned:
- Ensure that affiliate programs have reliable tracking systems in place.
- Test conversion processes to ensure that they are user-friendly and straightforward.
- Partner with programs that offer strong affiliate support and quick problem resolution.
6. Rakuten’s Affiliate Program – Complex Payout Structure and Technical Issues
Rakuten, a large affiliate network, has hosted thousands of affiliate programs over the years. However, many affiliates have complained about Rakuten’s complex payout structure and inconsistent tracking.
Why Rakuten’s Affiliate Program Struggled:
- Complex Commission Rules: Different merchants on Rakuten’s platform offered varying commission rates and payout schedules, making it difficult for affiliates to track earnings.
- Technical Issues: Tracking cookies often failed to register sales, leading to lost commissions.
- Delayed Payments: Many affiliates reported delayed or missing payments.
Lessons Learned:
- Choose affiliate programs with straightforward and transparent commission structures.
- Ensure that the program’s tracking system is reliable and regularly updated.
- Read affiliate reviews and testimonials before signing up.
How to Choose the Right Affiliate Program
Learning from these failed affiliate programs highlights the importance of selecting the right program. Here are key factors to consider when choosing an affiliate program:
✅ 1. Competitive Commission Rates
- Look for programs that offer a commission rate of at least 5%–10% (or higher for high-ticket items).
- Consider recurring commission programs that pay out for repeat customer purchases.
✅ 2. Reliable Payouts
- Research the program’s payment terms and thresholds.
- Ensure that the program has a history of consistent and timely payouts.
✅ 3. Strong Merchant Support
- Look for programs with dedicated affiliate managers.
- Ensure that the merchant offers marketing resources like banners, product images, and tracking links.
✅ 4. High Conversion Rates
- Test the product landing pages and checkout process.
- Choose programs with a proven track record of high conversion rates.
✅ 5. Market Longevity
- Avoid programs in declining markets or saturated niches.
- Research the merchant’s financial stability and market position.
Conclusion
Failed affiliate programs like Overstock, Jet.com, and Blue Apron reveal common pitfalls such as poor commission structures, weak merchant support, and market saturation. By understanding why affiliate programs fail, you can avoid similar mistakes and select programs that offer long-term potential and profitability.
Choosing the right affiliate program requires thorough research, testing, and ongoing performance analysis. By focusing on programs with competitive commissions, strong merchant support, and high conversion rates, you can build a sustainable and profitable affiliate marketing business.
