There have been a lot of questions about “AuctionAds”. On the surface it seems too good to be true. How can they serve ads for you and pay out your complete commission? Well, this is all because of a sliding commission scale. If you sign up for your own personal eBay account then you will see the following scale.
Sales
50%: $0 – $99.99
55%: $100.00 – $4,999.99
60%: $5,000.00 – $199,999.99
65%: $200,000.00 – $699,999.99
70%: $700,000.00 – $2,999,999.99
75%: $3,000,000.00
Signups
$25: 1 – 49
$28: 50 – 1,999
$31: 2,000 – 29,999
$35: 30,000 +
So if you sell $1,000 worth of merchandise and have 3 signups you make 55% of the commission EBay made from the $1,000 in sales. So lets say 55% of 5% of $1,000 or $27.50 as well as $25 * 3 ($75) from signing up new users. You would get paid $102.50 that month.
That is not too bad. However Auction Ads is making a lot more than this. Auction ads now has over 17,000 people using it. If the average is $1,000 in sales and 3 signups then Auction Ads will have $17 Million in sales and 51,000 new signups. $17,000,000 * .05 (commision) * .75 (Sales Percentage) = $637,500 earned. They Pay $17,000,000 * .05 * .55 = $467,500 for commisions. The 51,000 signups make 51,000 * $35 or $1,785,000. They pay 51,000 * $25 or $1,275,000.
Not counting operating costs of course, Auction Ads makes $637,500 + 1,785,000 – 467,500 – 1,275,000 or $680,000 for one month.
You may think that this equates to losing out on $40 a month ($142.50 vs $102.50). You would not have been able to make that $102.50 if you did not use their system. This is because you would not convert nearly as much if your ad was non-dynamic and did not offer a photo. So you get a lot out of this! Also you would make $102.50 if you used eBay’s affiliate program rather than auction ads.
Will eBay get mad at AuctionAds? No way! They will have more sales and new members than with just their affiliate program alone. Also eBay owns PayPal and AuctionAds pays their members via PayPal so they get a percentage of what AuctionAds pays to its users.
The only thing that I would like to see for AuctionAds is for them to get rid of the 6 month limitation for Auction Ad referals. Currently you get 2% of a referal’s profit for just 6 months if they signed up from your ad. I would be A LOT MORE motivated if it was 2% for life!
If you found this post useful then click on the “Ads by Auction Ads” link and sign up for the program.
