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July 29, 1997updated 05 Sep 2016 12:28pm

AOL WAKENS ONLINE RETAILERS WITH FLAT RATE CHARGE

By CBR Staff Writer

America Online Inc says it will re-vamp its online shopping mall by charging retailers a flat rate for rental of space, rather than taking a percentage of sales. The move by the Dulles, Virginia company is meant to make retailers try a bit harder with their web retailing efforts. The previous structure relied too much on commission for AOL’s liking, and so if retailers didn’t sell much, they didn’t have to pay AOL much either. It will, of course, also help smooth out AOL’s revenue stream in the process by guaranteeing it regular payments. It remains to be seen how many retailers can now stay with the pace. AOL says it will still operate charge some select retailers a part commission-part flat rate, though most will be at an undisclosed flat rate. It previously charged up to 20% commission on deals with retailers, but that percentage will decrease, and the flat rate increase. The company also intends to split its Shopping Channel area up into 15 product areas, each led by two flagship retailers. The re-designed Shopping Channel will debut in late August.

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