Apple affiliate program criticised by channel

Apple affiliate program criticised by channel

Apple has launched a fresh attack on its local channel with the introduction of a Store Affiliate program.

The program rewards affiliates for the placement of website banner ads that direct traffic to Apple's online store. Any sales made at the site result in the vendor paying up to 3.5 per cent commission depending on the value of the sale.

While Apple argues the program is designed to share the wealth generated by the success of its Apple Store, channel partners contacted by ARN saw things differently.

AppleCentre Taylor Square managing director, Ben Morgan, suggested the initiative would see channel partners questioning the value of being an Apple reseller.

"If a reseller was to direct all their business to Apple's online store they would make more money than they do now," he said. "There would be no cost of operation and all you would have to do is redirect your customer base."

MacSense managing director, John Khoo, said it was unlikely that resellers would take up the offer, but other channel partners could be tempted.

"I doubt if many resellers would accept that margin alone but distributors may be happy to put a banner ads on their site for 3.5 per cent," he said. "It's making money while they sleep."

For Next Byte managing director, Adam Steinhardt, the move was further indication that Apple's commitment to the channel was waning.

"For the last two years Apple has openly been on a rampant path to get as much market share as it can and it doesn't particularly care how it does that," he said.

While the launch of the program was disappointing, the move could be read as an effort to grow the overall market, Steinhardt said.

"Apple needs big distribution for iPods to maintain market share," he said. "They are the type of sales this strategy is going to get."

In effect, the move would hurt mass merchants more than the channel, Steinhardt said.

"Our business has a great future if it continues to be a specialist," he said. "Mass merchants create business for us as they don't know the products like we do, so people looking for more than just an iPod will still come to us."

Khoo said the initiative was more an indication that Apple was beginning to employ smart marketing staff.

"Its website already has big pulling power so I think it is an attention grabbing effort more than anything else," he said. "Apple only has to pay for increased advertising if there is a sale."

Apple Australia declined to comment on this story.

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