Getting Screwed Out of Hostgator Affiliate Commissions?
We’re all pretty familiar with website hosting services and the affiliate programs that go along with them. After all, if you’re going to make money online, you probably need to buy a hosting account. Their affiliate commissions are usually pretty lucrative ($50+ per sale!), which is why you’ll see affiliate links and banners for hosting services on most blogs. Hostgator and BlueHost are two of the more common ones.
I don’t heavily promote hosting at all – I have a couple links on my resources page, but beyond that, I’m not really working hard for hosting affiliate commissions. Because I suspect many of you promote hosting either actively or passively (through banners, etc.), I thought I’d bring this finding to your attention, specifically if you promote Hostgator.
Before I begin my little rant, I want this to be clear: I don’t believe Hostgator is screwing anyone. I think they’re a legitimate hosting provider, but I think the terms of their affiliate agreement are a little quirky, and that you could very easily not get paid for your referrals.
Here’s What I Found
I’ve gotten a few Hostgator referrals from time to time, but it’s by no means a significant part of my affiliate marketing strategy. If you’ve had a referral to Hostgator before, you’ve seen the e-mail from them:
Sweet! Right? It says I’ve earned a commission. I’ve received a few of these before, and I’m well aware of the fact that they don’t pay out commissions for a few months, because they have to make sure the people who purchase hosting actually remain customers for a period of time and don’t cancel after a week or a month.
The other day, when I logged into my affiliate account, I found this:
[I've obviously hidden the names of the domains to protect their owners.]
I was shocked! Not one of the hosting packages I referred turned into a commission. Granted, one is still pending, but I can tell that one will go “invalid” before long.
Here’s the unusual part: When I go to ALL of the above domains (with the exception of the one where the owner cancelled his or her account), they are ALL still active websites. Not only are they active, but they’ve been updated recently – why would someone who is actively working on a website NOT pay their hosting bill? I could see it happening to one person, but not all of them.
One of the above domain packages was purchased 10 months ago. If they’re overdue on paying for hosting, wouldn’t Hostgator have shut down their account? And if they were only overdue recently, shouldn’t I have received the commission related to that sale?
And what about the sale that took place on 1/9/11? That was barely a month ago. I don’t know about you, but when I purchase hosting (or anything with a recurring fee online), I pay for the first month up front at the very least. How could this account be overdue already? Surely Hostgator didn’t sell them hosting without having them pay for the first month. I know we’re a little over a month past that date as of the time I’m writing this, but when I noticed it said “overdue,” it hadn’t been a month yet.
Here’s the explanation Hostgator provides for overdue accounts:
I don’t really know what’s going on here – I suspect if I try to ask their support, they will just tell me that these accounts are overdue, which they may be. It’s just odd that out of 5 affiliate sales, 100% of them didn’t actually convert. Per Hostgator’s affiliate terms & conditions, you’re paid 60 days after a sale is made, and the account must be active at that time. So I guess none of these accounts lasted longer than 60 days? Who buys hosting for a site and gives up after 2 months? I’m sure some people do, but 5 out of 5 people?
It’s Time to Make a Change
Like I mentioned before, selling hosting as an affiliate is a pretty lucrative deal. Here’s what Hostgator offers:
Unless you’re selling a high volume, you’re probably making $50 or $75 per sale. Not bad. What I realized though, is that Hostgator’s primary business is hosting other people’s websites, not running an affiliate program. So, I turned to Commission Junction, who is in the business of affiliate sales, and has a reputation for timely payouts and handling affiliate transactions well.
What I found was pretty awesome. Not only can you sell Hostgator hosting as an affiliate through Commission Junction, but they pay $100 per sale (without having to sell 11-20 per month, as indicated in Hostgator’s commission structure above). Furthermore, I have a feeling that I won’t run into problems where I’m making sales and mysteriously never getting paid for them because of “overdue” accounts, because the payments will be handled by CJ ultimately.
So, I’ve made a change to all of my affiliate links to include my new CJ link. I never made many hosting sales to begin with, but even so, I’ll hopefully be better off this way.
What Have Your Experiences Been Like?
I’m sure most people have had no problem with Hostgator’s affiliate program, but I’d like to see if anyone else encountered the same issue that I did. What do you think about all of this?