How to allow another company to sell subscriptions to my site?

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I have a subscription based website. I offer resources to math teachers.
A one-year subscription entitles the user to unlimited access to the
site. One of my significant markets is home schoolers in the United States.

We have been contacted by a major home school supplier in the US who is
interested in selling our service. This would be a significant source of
exposure for our site. They are very selective as far as who they
include in their catalog. Customers have come to expect that items in
their catalog are the best resources on the market.

They have a paper catalog as well as a shopable web site.

They have never sold a subscription based service. We have never had
anyone sell for us.

I would love to have this company sell for us. The exposure would be
worth a lot to me. But I can't figure out the mechanics.

What they are proposing is that they give their customer a special code
that allows that customer to come to my site and enter the code in lieu
of payment when they sign up at my site. The company would then pay me
(at a discount) for the number of such codes customers have purchased
from them. On the surface this looks like a good idea. I want to make
sure that the process is bullet proof.

I don't want to make the process more painful for the customer than
necessary. Normally, the customer comes to my site, signs up, enters
payment information, and an account is set up for them. When buying from
this other company, the customer will need to pay them, wait for a code
to be mailed to them, then go to my site to sign up. I'm not really
seeing any advantage for the customer (except that this company wants to
discount the price by $1.00 USD). If there is no advantage for the
customer, there may not be a lot of sales through the catalog.

I can set up a web page that would allow the company to enter customer
data, and would return a code in the form <company
abbreviation>-<customer number>-<year>-<check digit>. I would keep that
code on file so that when the customer enters the code, I know he has
paid through the other company.

Are there any gotchas I should be looking out for? Can anyone suggest
other ways to set this up?

Re: How to allow another company to sell subscriptions to my site?

Scott Bryce wrote:

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I would handle subscription outside of this deal using a specialized
subscription services such as PayPal subscriptions. I know they've been
bashed a lot on this forums but to date no one can match the brand
recognition of PayPal and so your potential clients won't get turned away
but having to pay money to an (relatively) unknown vendor.

In any case, if you let a third party control the subscription, you are
giving away too much control of your business well-being. This is a
long-term commitment you are talking about and there is a chance that you
may change your mind about them but you'll be locked in because they have
control over the means your clients pay you.  

I would pay this company for inclusion into their catalog if it gives you
better exposure, just as you'd pay a magazine for an ad, but would handle
the subscriptions in-house.

Good luck!

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Re: How to allow another company to sell subscriptions to my site? wrote:

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I handle subscriptions via a custom built set of scripts which I have
total control over. I accept PayPal, but I do not use PayPal
Subscriptions. I didn't want PayPal to have that much control over my
customer's accounts.

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This particular vendor is one of the best known suppliers in the home
schooling community in the US.

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The third party won't be controlling my subscriptions. The want to act
as a reseller. Only there isn't any physical item for them to resell. I
can't wholesale them an inventory to resell. The question is how does
one resell subscriptions to a web site?

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That is the plan. But say I am a customer. I place an order with X
company. Included in my order is a subscription for Y web site. How do X
company and Y web site coordinate the specifics of the purchase so that
the customer gets what he paid for? That is my question. And why
wouldn't the customer just buy directly from Y website?

Quoted text here. Click to load it

This is the idea, from my perspective, but the other company wants to be
able to take orders and keep a commission on the order, much the same
way they might buy an item at wholesale and resell it at retail. On my
end of things, I like the idea of only paying them for subscriptions
that are generated by inclusion in the catalog rather than paying for ad
space, assuming that this company would even be willing to sell ad space
in their catalog.

Re: How to allow another company to sell subscriptions to my site?

On Wed, 14 Feb 2007 12:32:55 -0700, Scott Bryce wrote:

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you are really only offering ppl access to your member section through an
affiliate. right?
write an affiliate script to authorize or hack one up and use a coupon code
or something


Secretary of Altered States
Governement of the Mens Room

Re: How to allow another company to sell subscriptions to my site?

Scott Bryce wrote:

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How about flipping the whole thing on its head.

The catalogue gives you a half-page glossy advert for your site and writes
a small, favourable review. At the bottom of the advert is a notice
saying, "for a $1 discount, quote code 'BLAHCATALOGUE' when signing up!".

They go to your site to sign up and pay. During the signup process they
are given the opportunity to quote a discount code, giving them a $1
discount on the payment. At the end of each month, you tally up the total
number of BLAHCATALOGUE discount codes used and pay the catalogue
publishers a commission of $1 per signup.

For the customer:

    - $1 discount

For the catalogue:

    - $1 profit on each person who signs up
    - No work handling payments and giving out codes

For you:

    - More signups
    - But $2 less income per signup

The beauty of this scheme is that you can keep the idea of discount codes
and apply it to non-commission sales.

That is, you could take out a normal advertisement in some appropriate
magazine -- this would of course cost you money. And in the advertisement,
say "$1 off if you use discount code 'FOO MAGAZINE' when you sign up". And
when those signups start rolling in, no need to pay out any commission on
them. Keeping track of the number of people that sign up using the FOO
MAGAZINE code and comparing that with the cost of advertising in Foo
Magazine will tell you whether or not it's worth it to continue
advertising there.

Toby A Inkster BSc (Hons) ARCS
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Geek of ~ HTML/SQL/Perl/PHP/Python*/Apache/Linux

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