View Full Version : Rakeback negotiations question
rusty JEDI
10-04-2005, 03:48 AM
Ive read a bunch and it seems many affiliates pay different %'s if you 4 table 2/4 or if you 8 table 15/30 or if you 1 table .5/1.
Can someone explain the rational behind this. Seeing its all % based why?
rJ
craig r
10-04-2005, 03:50 AM
Because even though it is based on a %, you are in effect making the affiliate more money by producing more MGR.
craig
rusty JEDI
10-04-2005, 03:51 AM
For an affiliate who is at the max % from the site based on total mgr why is that a factor?
rJ
craig r
10-04-2005, 03:57 AM
My guess is that it is to get the higher volume players to play with them as oppossed to another affiliate. Even if a high producing affiliate is "maxed out" with the site, they will still make more if they earn 3% off of a high volume player as oppossed to 4% from a low volume player. (These numbers are fictitious...but I am sure you knew that already /images/graemlins/smile.gif ).
craig
StellarWind
10-04-2005, 04:17 AM
[ QUOTE ]
Ive read a bunch and it seems many affiliates pay different %'s if you 4 table 2/4 or if you 8 table 15/30 or if you 1 table .5/1.
Can someone explain the rational behind this. Seeing its all % based why?
[/ QUOTE ]
Why do high volume customers in any business get discounts?
The affiliate spends time in handling your account (answering questions, making payments, resolving problems) that is largely independent of how much rake you generate. He needs to make enough money off of you to make it worth his trouble. If you are a big customer he can make that money off a smaller percentage. This is the cost-based explanation.
It's also more important to him that he wins the big accounts and that motivates him to try harder. This is the market-based explanation.
rusty JEDI
10-04-2005, 04:35 AM
[ QUOTE ]
The affiliate spends time in handling your account (answering questions, making payments, resolving problems) that is largely independent of how much rake you generate. He needs to make enough money off of you to make it worth his trouble. If you are a big customer he can make that money off a smaller percentage. This is the cost-based explanation.
[/ QUOTE ]
I am claiming that the work of an affiliate is minimal enough that it shouldnt matter and they should be paid the same.
Im just out for the little guy.
rJ
[ QUOTE ]
[ QUOTE ]
The affiliate spends time in handling your account (answering questions, making payments, resolving problems) that is largely independent of how much rake you generate. He needs to make enough money off of you to make it worth his trouble. If you are a big customer he can make that money off a smaller percentage. This is the cost-based explanation.
[/ QUOTE ]
I am claiming that the work of an affiliate is minimal enough that it shouldnt matter and they should be paid the same.
Im just out for the little guy.
rJ
[/ QUOTE ]
I work 7 days a week probably 6-8 hours a day. Actually, much more than that... because I am always getting phone calls / emails / random stuff 24/7. I am not complaining, I love my job, but by no means is it minimal work. Oh yeah, its 2:36am!
rusty JEDI
10-04-2005, 05:50 AM
[ QUOTE ]
I work 7 days a week probably 6-8 hours a day. Actually, much more than that... because I am always getting phone calls / emails / random stuff 24/7. I am not complaining, I love my job, but by no means is it minimal work. Oh yeah, its 2:36am!
[/ QUOTE ]
The work per individual is minimal enough that i think the % should be the same for a 1 table .5/1 and a 4 tabling 15/30.
What other type things are put in place for that 1 table .5/1 player to get more as they move up? How often is this discussed outright, and what if its not discussed but you notice them up to 5/10 and 2 tables?
rJ
rusty JEDI
10-04-2005, 06:03 AM
Adding a little more to this.
If you give the .5/1 players a higher % to start with he makes more money. Therefore he has more bb's and stays in the game longer and can move up to the next level faster and generate more rake helping everyone involved.
Pay that man his money....Now.
rJ
[ QUOTE ]
The work per individual is minimal enough that i think the % should be the same for a 1 table .5/1 and a 4 tabling 15/30.
What other type things are put in place for that 1 table .5/1 player to get more as they move up? How often is this discussed outright, and what if its not discussed but you notice them up to 5/10 and 2 tables?
rJ
[/ QUOTE ]
I am going to make a generalization here, but the 15/30 player is probably playing a lot more than the .5/1 player. Therefore, he will rake off more money causing him to be a much more valuable player for the affiliate. The .5/1 player who single tables has no value to the affiliate.
Deals are not based on limits played, but on MGR (total rake paid). Obviously, a player who is playing the higher limits is going to have a much easier time increasing his MGR, so its generally the higher stakes players with the better deals.
If you are a low limit player, but think you will move up in the upcoming months you should def tell your affiliate about this. Try to get a deal for when you do $X in MGR, set some sort of tier. The player should be responsible for negotiating a deal that works in his best interest.
[ QUOTE ]
Adding a little more to this.
If you give the .5/1 players a higher % to start with he makes more money. Therefore he has more bb's and stays in the game longer and can move up to the next level faster and generate more rake helping everyone involved.
Pay that man his money....Now.
rJ
[/ QUOTE ]
Why give him a higher %? Why not just bankroll him. There are many affiliates who do this, they will give a player some money to play with and a reduced (0-10%) rakeback rate. A long term player will easily rake the money back to the affiliate and you dont have to deal with splitting up the profits from the player you've staked. I have a number of affiliates who do this and they do very well for themselves. Its the new 'staking'.
rusty JEDI
10-04-2005, 06:29 AM
[ QUOTE ]
The player should be responsible for negotiating a deal that works in his best interest.
[/ QUOTE ]
How do you suppose they do this when they dont know what is what because things are kept censored in the forums.
rJ
rusty JEDI
10-04-2005, 06:32 AM
[ QUOTE ]
I am going to make a generalization here, but the 15/30 player is probably playing a lot more than the .5/1 player. Therefore, he will rake off more money causing him to be a much more valuable player for the affiliate. The .5/1 player who single tables has no value to the affiliate.
Deals are not based on limits played, but on MGR (total rake paid). Obviously, a player who is playing the higher limits is going to have a much easier time increasing his MGR, so its generally the higher stakes players with the better deals.
[/ QUOTE ]
I dont see any of this making a difference when they are paid a % of the mgr.
rJ
[ QUOTE ]
[ QUOTE ]
The player should be responsible for negotiating a deal that works in his best interest.
[/ QUOTE ]
How do you suppose they do this when they dont know what is what because things are kept censored in the forums.
rJ
[/ QUOTE ]
youre kidding me right? come on, if you really want to know what %s you can get its not hard. contact a a few affiliates and sell to them. you really want my advise with your wise ass remarks?
[ QUOTE ]
[ QUOTE ]
I am going to make a generalization here, but the 15/30 player is probably playing a lot more than the .5/1 player. Therefore, he will rake off more money causing him to be a much more valuable player for the affiliate. The .5/1 player who single tables has no value to the affiliate.
Deals are not based on limits played, but on MGR (total rake paid). Obviously, a player who is playing the higher limits is going to have a much easier time increasing his MGR, so its generally the higher stakes players with the better deals.
[/ QUOTE ]
I dont see any of this making a difference when they are paid a % of the mgr.
rJ
[/ QUOTE ]
Affiliate makes 1% off each of his high volume players and 3% off each of his small stakes players. 15/30 player pays 10,000 in rake a month, .5/1 player pays 100 in rake a month. which player is more profitable for the affiliate?
10k * .01 = 100$ profit to affiliate
100 * .03 = 3$ profit.
hard math, yes i know...
now do you see why affiliates will fight for the high volume players, and why they get better deals.
oh god, i just said do you see why...
/images/graemlins/grin.gif
rusty JEDI
10-04-2005, 06:41 AM
Sorry if im making you upset, that is not my intention and i am not here to simply fight devils advocate style. I dont see it as advice, but as discussion.
Im just trying to argue the point that a single player does not add a significanat amount of workload to a person who already has everything set up with 50+ players to not offer the same % whether they are multi 15/30 or single micros. Especially when you add in the value of that players potential growth (especially consider they find you through 2+2 or some other method that shows their interest in learning and taking it serious = likely success) and the value of giving them more back helps them move up quicker.
rusty JEDI
10-04-2005, 06:47 AM
[ QUOTE ]
Affiliate makes 1% off each of his high volume players and 3% off each of his small stakes players. 15/30 player pays 10,000 in rake a month, .5/1 player pays 100 in rake a month. which player is more profitable for the affiliate?
[/ QUOTE ]
Taking this into your specific business which i hope is okay, if not just PM. If i am a high volume player do i automatically get the 1% margin and how do i know im getting it?
Isnt $100 per month a lot to be making off me? At what point would you just pay them a flat fee that works out to less than 1%. Is there a player "that high volume?"
[ QUOTE ]
10k * .01 = 100$ profit to affiliate
100 * .03 = 3$ profit.
hard math, yes i know...
now do you see why affiliates will fight for the high volume players, and why they get better deals.
[/ QUOTE ]
I of course see why they fight for the high volume players but not why they get paid a greater % than the low volume player. I will never understand that as we are obviously split ideologically here. But, im right.
rJ
i agree with you when you say you want the player to move up, nothing makes an affiliate more happy.
however, high stakes players will always want more than the low stakes players. they are making the affiliate more money, they deserve to be paid better. so, you either pay them more, or pay everyone the same amount. if you pay everyone the same, your margin as the affiliate will be soooo small, say .5% or 1%, maybe less. the affiliate cannot survive off this little and will go bust. oh yeah, good luck proving that you are paying your players everything you get minus the 1%... this board shows how much you guys trust us... /images/graemlins/frown.gif
[ QUOTE ]
[ QUOTE ]
Affiliate makes 1% off each of his high volume players and 3% off each of his small stakes players. 15/30 player pays 10,000 in rake a month, .5/1 player pays 100 in rake a month. which player is more profitable for the affiliate?
[/ QUOTE ]
Taking this into your specific business which i hope is okay, if not just PM. If i am a high volume player do i automatically get the 1% margin and how do i know im getting it?
Isnt $100 per month a lot to be making off me? At what point would you just pay them a flat fee that works out to less than 1%. Is there a player "that high volume?"
[ QUOTE ]
10k * .01 = 100$ profit to affiliate
100 * .03 = 3$ profit.
hard math, yes i know...
now do you see why affiliates will fight for the high volume players, and why they get better deals.
[/ QUOTE ]
I of course see why they fight for the high volume players but not why they get paid a greater % than the low volume player. I will never understand that as we are obviously split ideologically here. But, im right.
rJ
[/ QUOTE ]
i dont understand, i have given you a solid example of why affiliates fight harder for the high volume guys. offering higher %s is a way of fighting, it will get them to sign with the affiliate. why does manny make more money than nixon? this is very simple... maybe i am misunderstadning.
rusty JEDI
10-04-2005, 07:02 AM
[ QUOTE ]
i dont understand, i have given you a solid example of why affiliates fight harder for the high volume guys. offering higher %s is a way of fighting, it will get them to sign with the affiliate. why does manny make more money than nixon? this is very simple... maybe i am misunderstadning.
[/ QUOTE ]
Yes, I understand why they fight for high volume guys. But, I don't agree with your arguments for why the low limit guys cant get the same %. We will not agree on this.
Manny generates x revenue for the team
Nixon generates y revenue for the team
They should both be paid the same % of their x and y.
rJ
ahh ok, i see where you are coming from now and you a very good point. however, in the end the affiliate wants the 15 player...
the reason the 15/30 gets more because he can. the affiliate needs to keep this high stakes player and keeping him means making him happy. he has to give extra or else his business will suffer and he will lose the 100$/mo. a .5/1 player cannot make much of a argument and the affiliate well tell him to f-off.
rusty, im about to good to bed. good discussion, i'll be back in the morning /images/graemlins/smile.gif
the sites pay affilaites based on the amount of mgr we generate. that tiered structure has imbedded itself in the player rewards.
Jim Easton
10-04-2005, 10:33 AM
Because they don't pay their bills with percentages, they pay them with money. A 15/30 player generates 5 times more rake per hand that a 1/2 player. They can pay the 15/30 player more and still make more themselves.
college_boy
10-04-2005, 05:00 PM
[ QUOTE ]
[ QUOTE ]
Adding a little more to this.
If you give the .5/1 players a higher % to start with he makes more money. Therefore he has more bb's and stays in the game longer and can move up to the next level faster and generate more rake helping everyone involved.
Pay that man his money....Now.
rJ
[/ QUOTE ]
Why give him a higher %? Why not just bankroll him. There are many affiliates who do this, they will give a player some money to play with and a reduced (0-10%) rakeback rate. A long term player will easily rake the money back to the affiliate and you dont have to deal with splitting up the profits from the player you've staked. I have a number of affiliates who do this and they do very well for themselves. Its the new 'staking'.
[/ QUOTE ]
Isn't there a fair amount of risk involved in fronting your own money to new players?
vBulletin® v3.8.11, Copyright ©2000-2024, vBulletin Solutions Inc.