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Carl Hancock @Syed Balkhi – The issue isn’t some of these ideas can’t be used to create a profitable site, the primary issue is the community of people willing to pay for things like this is just very small for this particular niche. WPCandy hasn’t exactly been a financial windfall for Ryan, WPCandy PRO’s was successful in bringing in some revenue when it first launched but it wasn’t a longterm revenue generator. We don’t choose to ignore our advertising budget, our product is just very difficult to advertise. The sites such as WPTavern, WPCandy, WPDaily, etc. are visited primarily by people that already know about Gravity Forms. So the paying for advertising to reach the same people over and over again, many of whom already use our product, isn’t a smart business decision. The WordPress news sites are very niche and don’t cater to the mainstream WordPress users, who as I mentioned don’t really care about WordPress news. To them WordPress is just the software that powers their web site. They don’t care about the same things we do. As for affiliate programs, we have no plans to end our affiliate program. But it’s not something that would significantly impact our bottom line if we did. HOWEVER companies like WooThemes and many of the commercial theme providers who have closed their affiliate systems have not done so because they didn’t generate revenue and they have not done so because they think they are too big for an affiliate program to be helpful in marketing their product. They did so because of RAMPANT and I mean RAMPANT fraud and abuse of the system. For some reason the commercial plugin space has not seen the rampant affiliate program fraud and abuse that the commercial theme space has encountered. I’m not quite sure why that is. But the theme companies that have shuttered their affiliate programs have done so because of the fraud, not because they thought they were too big to require offering an affiliate program. We haven’t encountered the same issues. So we have no plans to shut ours down. We will be switching to a new affiliate software system as we’ll be moving off of e-junkie, but our affiliate program won’t be going anywhere. As I mentioned, i’m not sure why the theme market has seen such fraud and abuse with their affiliate programs but they have… and that is the reason why they have been closing left and right. It has nothing to do with ego or thinking they are so successful and big they don’t need it. Quite the opposite. It’s cost them money and they’ve had to deal with a lot of fraud and abuse. So the negatives they encountered outweighed the benefits the affiliate program was providing them. So your comments about people getting too comfortable so they are eliminating things such as their affiliate programs are completely off base, inaccurate and simply untrue. Many of these companies, including ours, have grown into real businesses. Not 1-2 man shops or side businesses for a single developer. The bigger players have grown into well established companies with 10, 20, 30+ employees. Offices, employee benefits, etc. The types of business decisions you make in that situation are not the same as you may made when you are a 1-2 man shop. Comparing Amazon’s affiliate program to Gravity Forms, WooThemes, etc. is like comparing apples to sea turtles. Amazon has run with a zero profit business strategy almost since it first started. It doesn’t care if it posts a profit or not, it just wants to get as big as it possibly can. Here’s a good article on Amazon: http://www.slate.com/blogs/moneybox/2013/01/29/amazon_q4_profits_fall_45_percent.html Here’s a great quote: “It’s a truly remarkable American success story. But if you own a competing firm, you should be terrified. Competition is always scary, but competition against a juggernaut that seems to have permission from its shareholders to not turn any profits is really frightening.” Businesses like WooThemes and our own don’t have that luxury. We don’t have deep pocket venture capital funding keeping us a float when we aren’t turning a profit. We aren’t a public company that can sell shares to raise money to keep us a float. If something like the affiliate system is costing is more money in fraud and abuse than it is adding to the bottom line, then it’s not worth doing. WooThemes and others have encountered this and chose to eliminate them exactly because of the negative impact they were having on their bottom line. Unlike Amazon, our businesses can’t afford NOT to be profitable. So we make decisions accordingly.
Carl Hancock
@Syed Balkhi – The issue isn’t some of these ideas can’t be used to create a profitable site, the primary issue is the community of people willing to pay for things like this is just very small for this particular niche. WPCandy hasn’t exactly been a financial windfall for Ryan, WPCandy PRO’s was successful in bringing in some revenue when it first launched but it wasn’t a longterm revenue generator.
We don’t choose to ignore our advertising budget, our product is just very difficult to advertise. The sites such as WPTavern, WPCandy, WPDaily, etc. are visited primarily by people that already know about Gravity Forms. So the paying for advertising to reach the same people over and over again, many of whom already use our product, isn’t a smart business decision. The WordPress news sites are very niche and don’t cater to the mainstream WordPress users, who as I mentioned don’t really care about WordPress news. To them WordPress is just the software that powers their web site. They don’t care about the same things we do.
As for affiliate programs, we have no plans to end our affiliate program. But it’s not something that would significantly impact our bottom line if we did.
HOWEVER companies like WooThemes and many of the commercial theme providers who have closed their affiliate systems have not done so because they didn’t generate revenue and they have not done so because they think they are too big for an affiliate program to be helpful in marketing their product. They did so because of RAMPANT and I mean RAMPANT fraud and abuse of the system.
For some reason the commercial plugin space has not seen the rampant affiliate program fraud and abuse that the commercial theme space has encountered. I’m not quite sure why that is. But the theme companies that have shuttered their affiliate programs have done so because of the fraud, not because they thought they were too big to require offering an affiliate program.
We haven’t encountered the same issues. So we have no plans to shut ours down. We will be switching to a new affiliate software system as we’ll be moving off of e-junkie, but our affiliate program won’t be going anywhere.
As I mentioned, i’m not sure why the theme market has seen such fraud and abuse with their affiliate programs but they have… and that is the reason why they have been closing left and right. It has nothing to do with ego or thinking they are so successful and big they don’t need it. Quite the opposite. It’s cost them money and they’ve had to deal with a lot of fraud and abuse. So the negatives they encountered outweighed the benefits the affiliate program was providing them.
So your comments about people getting too comfortable so they are eliminating things such as their affiliate programs are completely off base, inaccurate and simply untrue.
Many of these companies, including ours, have grown into real businesses. Not 1-2 man shops or side businesses for a single developer. The bigger players have grown into well established companies with 10, 20, 30+ employees. Offices, employee benefits, etc. The types of business decisions you make in that situation are not the same as you may made when you are a 1-2 man shop.
Comparing Amazon’s affiliate program to Gravity Forms, WooThemes, etc. is like comparing apples to sea turtles. Amazon has run with a zero profit business strategy almost since it first started. It doesn’t care if it posts a profit or not, it just wants to get as big as it possibly can. Here’s a good article on Amazon:
http://www.slate.com/blogs/moneybox/2013/01/29/amazon_q4_profits_fall_45_percent.html
Here’s a great quote:
“It’s a truly remarkable American success story. But if you own a competing firm, you should be terrified. Competition is always scary, but competition against a juggernaut that seems to have permission from its shareholders to not turn any profits is really frightening.”
Businesses like WooThemes and our own don’t have that luxury. We don’t have deep pocket venture capital funding keeping us a float when we aren’t turning a profit. We aren’t a public company that can sell shares to raise money to keep us a float.
If something like the affiliate system is costing is more money in fraud and abuse than it is adding to the bottom line, then it’s not worth doing. WooThemes and others have encountered this and chose to eliminate them exactly because of the negative impact they were having on their bottom line.
Unlike Amazon, our businesses can’t afford NOT to be profitable. So we make decisions accordingly.
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