You read it right, ClickBank might not ever pay you one cent of your commissions and its perfectly legal and you agreed to it. I sent off a series of questions for this post to ClickBank and received some answers from Beau Blackwell of ClickBank that I will share later on in this post. Now, before I add any confusion to this issue I will clarify a few things about this post before I get into the gritty details. I have been a ClickBank affiliate for quite a while and can say I like their service a lot and it works well for me, so this is in no way meant to discourage anyone from using their service. I intend to clarify a few areas that most people don’t know about and only check into when their balance due to them ends up back at zero instead of getting it paid to them.
ClickBank has a very specific set of requirements that you must meet before they will pay you that most people never bother reading, you really should have paid attention to this part when you signed up. Until you meet these distribution requirements you won’t get paid one cent and if you don’t meet them fast enough they will start taking your money and you will never get it back, I will post an excerpt from the ClickBank accounting help page
Customer Distribution Requirement
ClickBank will withhold payment of any account balance until the following criteria is met:
- Sales made with 5 or more different credit card numbers; and,
- Sales made with two different payment methods (either Visa, MasterCard, or PayPal). Note: PayPal purchases do not count toward the minimum 5 different credit card numbers.
This requirement is in place to help prevent Affiliates from abusing the ClickBank Affiliate program by using their accounts for the sole purpose of fraudulently collecting rebates and/or discounts on their own purchases.
Once you have met the Customer Distribution Requirement, your account will begin issuing payments normally, in accordance with our Accounting Policy, beginning on the next payment issuing date.
So, you now know what the payout requirements are to get paid, seems pretty straight forward right, well the next part is what jumps up and gets people and is also the basis of what I personally find a bit shady. I will start off with a hypothetical scenario in which a new individual signs up with ClickBank and has aspirations to make a fortune in affiliate marketing, they set up a few sales pages and start promoting some products, things take off slow because like a large number of people who get into affiliate marketing they don’t realize it takes work and they just stop trying. They get a few sales and just give up or lose interest, lets say that they have $150.00 in their account that is due to them, but guess what… things are slow and they haven’t met the payout requirements listed above, so you guessed it, they will not get paid on that amount until those requirements are met. The real kick in the teeth for these people comes next when ClickBank starts taking money out of their account, quite possibly taking it all before they ever see one cent of it. This happens because they not only have payout requirements but they have a “dormant account” policy as well. Here is an excerpt from the page outlining what their dormant account policy is:
Accounts with a positive balance but no earnings for an extended period of time are considered dormant. Dormant accounts are subject to a charge of $1 per pay period after 90 days of no earnings, $5 per pay period after 180 days of no earnings, and $50 per pay period after 365 days of no earnings.
So the short version is this; If you earn affiliate commissions but don’t meet the payout requirements it will cost you. I asked the following questions and received the accompanying answers that will follow, hope it makes sense. Of course I didn’t receive answers to the most important questions but you are welcome to infer anything you like or make your own judgments of the situation. My main problem with this policy comes from how it is implemented, if you sell some products and make ClickBank money but don’t meet the payout requirements they will charge you, possibly taking every last cent of earnings that have been made and never paying out a cent. I have to assume that this is a substantial amount of money which likely represents a large portion of their annual earnings. Of course you can have a dormant account and not be assessed any fees if you do not have a positive balance in your account, so it seems that they only implement the practice of this “dormant account policy” in situations where there is a financial benefit to them, I’d imagine if they started charging dormant account fees to individuals with no account balance that the uproar would be too loud and bring too much attention to their policies and practices. As for the states that have escheat laws, that doesn’t bother me, let the money go back to the states and be used for the betterment of people instead of doing the quick grab to get in in their own pockets before the states claim it.
- How many affiliates does ClickBank currently have, and of those how many are presently active?
- What percentage of accounts are currently considered to be dormant?
- What percentage of dormant accounts completely deplete their positive account balances paying dormant account charges, and as a result never pay the account holder anything?
- How much does ClickBank profit annually by the assessing of dormant account charges?
- What advice would you give to those who are new to affiliate programs and what is the best way for them to get involved and find success?
- Any comments that you would like to add that will be beneficial to new and old affiliates alike.
- Can you provide me with a justification statement for charging dormant accounts fees? If an account has a positive balance, but can’t be paid out for whatever reason why is it fair or ethical to charge those individuals who have already made ClickBank money when you don’t charge accounts without a positive balance?
Unfortunately I won’t be able to answer your specific questions about dormant accounts, as we don’t share financial or account data for a variety of reasons. However, I will say that a number of states have escheat laws that require companies to minimize dormant accounts or risk forfeiture of those account balances to the government.
I’m happy to try to answer your other questions, though.
We currently have over 110,000 active affiliates, and have had over 1 million clients sign up with ClickBank since our inception. However, since by “active” we mean affiliates who have recently had a sale, the actual composition and number of affiliates who make up this “active” group is always changing. Since many affiliates only promote a few products or aren’t actively creating new promotions, they may only make one sale every few months or so. So they may be considered inactive for a while but shortly become active again.
There’s a lot of advice I could give affiliates starting out, but a few general pieces of advice I would give are:
- Promote products that you’re passionate about or interested in. It’s much easier to stay excited and motivated to keep working hard when you really believe in what you’re promoting, rather than just promoting what’s popular. You’ll also be more believable to potential customers.
- Similarly, choose promotional techniques that play to your strengths. If you like to write, try doing article marketing or blogging. If you like to take risks and always be testing and tweaking, try PPC advertising. If you love networking with people and sharing your opinion, try social media marketing. Each technique works best with different personality types and working styles. For example, some techniques like article marketing may not return immediate results, but can be a great long-term strategy if you can be patient. If you want immediate results and can tolerate risk, you may enjoy at PPC advertising. By picking a strategy that fits your work style and personality, you’ll avoid getting burned out and will be more likely to stick with your efforts even when you’re having a hard time getting started.
- Have realistic expectations and be prepared to stick with it. It may take a while before you start making sales, unless you have a lot of cash you can use for techniques like PPC advertising that can return immediate results. Successful affiliates spend a lot of time testing and tweaking their strategies and tactics, what products they promote, and more. For many affiliates, it takes them a good amount of time and effort before they really hit on what products and techniques work for them, but once they do, it becomes easier. Don’t get discouraged if you don’t start making sales immediately. Keep putting in the time and effort and the sales will come.
I hope that helps! Sorry I wasn’t able to answer all of your questions.