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Interview: Shopster's Sarath Samarasekera
By Jeff Molander
October 22, 2006
What's next for affiliate marketing… or perhaps the question is what's next for affiliates and publishers who find themselves being slowly but surely squeezed out of search marketing by Google, Yahoo! Search and others?
I posed a handful of such questions to Sarath Samarasekera, CEO of Shopster eCommerce Inc. (Shopster.com) a company offering what it calls "retail enablement tools." Translation: A tool set for Web store creation. The company even wraps services (customer service, fraud management, drop-ship based order management) around the tech tools for its customers. Why would affiliates be interested in becoming a retailer themselves?
"What happens when you send your customer somewhere else?" asks Samarasekera, noting that affiliates spend a good deal of time, energy and money to aggregate customers. "You only get them once… and now (when an affiliate sends the customer away) the retailer gets to keep them forever as their customer… and there's a very big value to owning the customer."
How is Shopster.com helping affiliates and publishers level the playing field? By literally becoming retailers themselves without any of the headaches. Sound too good to be true? Listen in as Samarasekera answers key questions.
Sarath Samarasekera: What is Shopster.com?
What Shopster is, is a retail enablement tool. Those are some pretty fancy words, but basically it allows anybody who wants to, to become a retailer online.
We help people with the website, and you can use our templates and storefronts to build yourself a store very quickly and by very quickly I mean in just a couple of minutes. If you are a more advanced programmer then you can build your own customized storefront.
We also then allow you to choose, from our warehouse of 700 000 products, what you want to sell in your store. Once you make a sale from your store, we then ship directly to your consumer or your customer.
What that does, it allows you to focus on marketing and sales while we focus on making sure that the customer gets the product; and if there are any problems or issues then we deal with the customer returns, as well as dealing with things like fraud, and dealing with taking payments all the difficult things about commerce that are not necessarily part of the selling experience. So we allow you to focus on what you are good at, and Shopster focuses on taking care of the rest.
We take the affiliate network or the affiliate marketing idea to the next level. Right now, largely what affiliates do is they redirect traffic. So traffic comes to them, they then send it to whoever is paying them to advertise their web site. This causes a couple of problems. One is, what happens when you send your customer somewhere else? You only get them once; and now the advertiser or the other retailer gets to keep them forever as their customer, and there is a very big value of owning the customer.
The second part where we are different from affiliate networks is, we do not use things like cookies to track your customer. If you make a sale on your web site, then you have made that sale. So at the end of the day what happens is the customer starts to recognize your web site, and sees your web site as a destination site.
What you want, then, is to be able to leverage the relationship, or keep that relationship with the customer over the long run. They may buy only one book or two books today from you, but this customer can keep coming back year after year, and now you have a reliable steady business. Rather than sending your traffic away on a one time quick hit and making your 30 cent commission, you get to own that customer for life, and that is really where we see Shopster coming into play. We allow you, the web site owner, to actually keep the traffic that you have helped create.
So why would an affiliate want to use Shopster?
And if you are an affiliate already, and let's say you have a coupon site, or you have a content site, and you have your advertisements where the consumer can click on one of your advertisements and go to a primary or a web site where they can buy something, why would you want to switch that type of advertising over to the Shopster system?
Really, what Shopster is about, is about allowing you to keep the value that you are creating. The reason why someone would pay you any amount of money for your customer is that they are really saying, "It costs us a certain amount of money to get and retain a customer. So we are going to pay you, the affiliate, a certain amount to help us get that customer, and then we want to own them for life." You can be guaranteed, if they are paying you a dollar for the customer, that customer is worth more than a dollar to them.
What Shopster allows you to do is, why don't YOU keep that? If the customer is worth more than a dollar, then why are you satisfied with keeping a dollar for doing the work to get the customer? That is where Shopster comes in.
Every affiliate is different. They do different things, they have different skills, different techniques. But at the end of the day, what they are good at is getting traffic on the Internet, and moving traffic where they want it to go. So why don't they move it to themselves?
What Shopster does is it allows you to take that traffic and keep it, so then you have a long term business. This is really where Shopster differentiates itself from all the other affiliate networks, is we are not telling you to lose your traffic. We are not asking you to send it to Shopster. We are asking you to keep it within your own system.
So how does Shopster make money?
Well, we make money, first of all, with fees. We charge a fee for people to join, and the fee helps us cover the startup costs of getting someone going. So, you will have a lot of questions when you first start up, and we have one of the best support systems in the world right now. That is not just me saying it. If you want to look on what anybody else on the Internet out there has to say about the support that Shopster provides, it is world class. We want you to be successful, because how we make our money is when you make your money.
Apart from the fee, we also take a percentage of the sale. The percentage of the sale is quite small, but at the same time, we are working with hundreds and thousands of affiliates, so when everybody is doing well then Shopster does well.
There are lots of other places where hopefully we will be able to make some money, and also make the affiliates some money.
For instance, shipping costs. People complain about shipping costs all the time. We have hundreds of suppliers that supply Shopster, and some of these guys are very, very small. By themselves, they could not go to a place like FedEx and say, "I would like a discount on my shipping." Through the Shopster network, we tell them that they are going to join Shopster's FedEx shipping rules, and we can get bulk discounts for them. So we are able to bring the costs of the system down, and by bringing the costs of the system down we make purchasing through the Shopster network a lot more attractive.
Anything that you can think of that a normal retailer has, that is the kind of power that the Shopster system allows you, the affiliate, to have.
So you could just set up your store, you could say, "This is my standard pricing." You get to put a sale on, and your Shopster will say, "Standard pricing; this is the new sale price." You can create discount coupons. All these tools are geared toward your store. So you can still have your coupon site, but instead of sending someone to Best Buy, you are now sending them to your store, and they still get their coupon, which you can build in.
One of the things that happens in this scenario is there are a lot of powerful tools which allow you to really mimic a retailer in any way that a retailer can. You can custom design web pages; you can custom design landing pages.
If you are frustrated with the conversion of some of your retailers, well, you get to try out your own theories now. So if you think a certain layout will convert better, instead of hoping that somebody on the retailer side is going to convert and change their landing page for you, you created your landing page, and you can see what works and does not work.
I think that is going to be the key here, is, this is definitely not one of those get rich quick schemes. There is work involved. Any sustainable, long term business, you are going to have to understand your consumer.
And if you know your consumer, and you are right now sending quality traffic to other retailers, then it makes sense for you to just send it to yourself. Why should you send it away? Keep it for yourself and make the sale through your Shopster store. You can now have a lifetime customer. Shopster gives you all the details of the customer, so you can send them emails and newsletters, and faxes any way that you think you are going to market to the consumer, you have all that information at your fingertips.
How easy is it to use Shopster?
The first thing about Shopster is, it is a very, very powerful tool, so we do find a lot of people get overwhelmed a little bit when they go into Shopster, because they are expecting something that is very, very simple. Unfortunately, that is not how the world is. There are a lot of tools in Shopster, so there is a lot to learn. At the same time, you do not have to use all the tools. Think of Shopster as a tool kit: you have some hammers in there, you have some saws, you have some nails. You pick the tools that you need in order to build the house that you are going to build.
So in order to sort of help you along through the Shopster process, we do have a very, very comprehensive "Getting Started" guide, a video, as well as a tutorial course, "Shopster 101." All of these things are geared toward training you how to use the different tools. As well, the forum system is there to give you pointers.
And other members of the forum system, the Shopster community is amazing. People help each other out, they help each other with design problems, with HTML or ASP or just technical questions.
The one thing you want to think about when you think about Shopster is that this is something that is going to be a business. So if you are going to be successful at Shopster, you are going to have to learn the tool. It would be very easy to tell you, "No, no, it is simple and you will pick it up in a few minutes" and I think you will pick up some of the things in a few minutes but to understand the full depth of the product you are going to have to spend some time.
But that is where the rewards come in; if you can master the tools, and master the requirements of being a retailer, then Shopster allows you to be just as big and powerful and influential as any of those big web sites out there.
