Huge Amazon Associates Pay Cut

by 76 replies
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Amazon just posted an announcement that starting on April 21 commissions will be reduced...

Furniture, Home, Home Improvement, Lawn & Garden, Pets Products, Pantry From 8% to 3.00%

Headphones, Beauty, Musical Instruments, Business & Industrial Supplies From 6% to 3.00%

Outdoors, Tools From 5.5% to 3.00%

Grocery From 5% to 1.00%

Sports From 4.5% to 3.00%

Baby Products From 4.5 to 3.00%

Health & Personal Care From 4.5 to 1.00%

Amazon Fresh From 3.0 to 1.00%

This is going to be a big hit if you are in one of these niches and/or if you get a lot of spillover commissions!
#main internet marketing discussion forum #amazon #associates #cut #huge #pay
  • Disappointed but not surprised. Amazon is so busy they have trouble filling orders right now...that's not going to end any time soon.

    There is no motivation to Amazon to pay higher commissions - I think they are bumping the FBA fees, too.
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    • I agree. I am almost surprised that they haven't suspended or cancelled ALL commissions indefinitely. The one thing Amazon has always been good at is crunching numbers. They will only keep paying commissions at a rate where they net profit the most.

      It won't affect me since I have been scaling back anyway.

      I feel bad for those that may have been putting a lot of effort into a niche only to find out they are now getting 1%. Even with a lot of good traffic it is hard to make much money with low ticket items at 1-3%.
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    • You are right.

      So I ordered something on Amazon here in Canada and it took little over 2 weeks to get in the mail.

      They are very busy but I don't get why would they lower the commissions for affiliates. I guess they don't and never will rely on affiliates for company growth. They are just too well known.
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  • That's to be expected!

    Even fuel prices are being dropped in some economies, to make ends meet. So don't be surprised if commission structures get adjusted by website owners, to help them keep the lion share of each online sale during this global crisis.
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    • Err, no they're not. The fuel price is dropping for a number of geo-political reasons, plus the fact that demand for oil has plummeted since there's very little air traffic, and very little commuting going on at the moment. The current crisis has reduced demand by over 20 million barrels per day meanwhile production has been cut by 10 million barrels a day.

      It's a simple supply and demand equation. Too much supply, not enough demand.
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  • Do you think this is a temporary cut, due to Covid, or a permanent cut? This could legitimately half the revenue for thousands of websites.
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  • @Janice Do you have a link to that announcement or was it an email?
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  • I am not sure Amazon will completely get rid of its affiliate program

    Amazon still gets tons of traffic from REVIEW sites

    It needs the content... if anything to set CONTEXT for the tons of products it carries
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  • That sucks for many website owners. But I don't think they will cut affiliate commissions to zero. It does give an incentive for all the people who rely on Amazon earnings to check out other types of income channels, so maybe this will give a boost to some other parties?
  • Thank you for the links and the table Jeffery. I had checked that long fees schedule page but it didn't have the new % rates; hadn't seen the other page though.

    It looks they cut the commissions on categories which are sought the most during the stay-home period, except maybe Outdoors.

    Some categories have over 50% reduced commissions. Though, 3% for some categories is still not a very bad figure. But I would think less affiliates would be inclined to specifically promote those 1% categories.

    I can only guess but increased online shopping and people purchasing more items on Amazon after the affiliate click could also help with loss of income due to lower commissions. I'm sure we will be hearing reports from fellow affiliates as to how this change affected them in the following months.

    The change looks to be not temporary, but, well, no change is ever permanent either.
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    • Outdoors was cut from 5.5% to 3% for a difference of -2.5%. Here in the U.S. Starting April is a strong month to traditionally sell outdoor products.


      Amazon site portfolios are pretty much like Adsense site portfolios wherein a couple years of website deployment earns a substantial income. The trick is to create as many niche sites as you can afford to earn a minimal of $20 daily from each product category.

      Eample: There are 8 categories that will have commission cuts for a total of 25,5%. Consider your site portfolio earns a minimum of $20 daily per each product category or $160.00 daily per the portfolio before the commission cuts. Now subtract 25.5% and that works out to almost $14,000.00 less per year.

      Yes, the affiliate link will carry over to additional sales and may skew the math, but unless it is high ticket item(s) the math will not skew too much to make a significant difference. At least in my own experience which is not everyone's experience.

      It is times like this, commission cuts and low sales volume, that we marketers need to put our heads together and come up with different ideas or simply expect and accept lower yearly earnings.

      Think start a real LLC, pay your taxes and research unearned income.
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    • I am not sure this is permanent. Amazon stopped advertising on google. This to me was because they were already overloaded with too much business. Then they cut influencers and others. Now they cut commissions. This was all to slow down the order flow because of Covid 19. Now when things setting down, will they reinstate the commissions? Possibly.
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  • That's pretty damn awful. From 5% to 1% is a deep fall.
  • This may be only temporary because of the current economic conditions, I don't know. But vendors have been getting hit too by Amazon squeezing their profit margins. If you've been getting decent traffic, consider contacting vendors for private deals.

    I started doing this three years ago when Amazon discontinued their performance-based commission slabs, where top affiliates were earning up to 10% commission in the highest tier.

    Although I am still doing quite well as an Amazon affiliate, my focus actually has been to use Amazon to find trending niches and hot products, with commission secondary.

    Many product manufacturers are on multiple platforms, and often are even open to consider private deals if you can show them you can drive consistent traffic.
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  • Affiliates didn't learn from some of the previous Amazon changes,
    but they will eventually figure out that they should not have all their
    eggs in Amazon. People need to stay flexible, adapt and pivot.
  • I am a little uncomfortable, but in the face of seeing it is fine, it can still be solved with the rest of the year.
  • I'm seriously considering investing in a thousand-gallon tank and filling it at the current price. When the price goes up to $4-5 per gallon in a couple of months I can sell it to friends and neighbors at half-price and make a little pin money.
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  • What makes you think the price of will go up to $4.5 per gallon in a couple of months?
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    • History? An educated hunch?

      Backlash?

      I predict the prices of many things will skyrocket due to this "virus" debacle. I also foresee breadlines and homeless and unemployment numbers that will make the 1930s Depression look like a Sunday picnic.

      More damage will be done by the insane over-reaction than by the virus, and many others agree.

      The "fun" has only just begun.
  • 3% commission, a short lived cookie... well I think their affiliates had it coming.
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    • Just out of curiosity can you qualify your statement a bit more.
      Did you mean affiliates should have seen it coming or they deserved to have had their commission rates cut and why?
      It does annoy me that Amazon can change it's terms of service in the blink of an eye without any consideration for it's affiliates when it was affiliates who helped build the company to what is is today.
  • I think this is a great shame for all of the Amazon affiliates - especially those who rely on this as their main source of income.
    With jobs being cut back at the moment it will hit them quite hard.
    It is always good to have be an affiliate of more than one company.
    There is quite a lot of choice for affiliates - so now is probably a good time to look at other companies.
    Ged
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    • NOW is probably a good time to examine other venues, look to something other than affiliate marketing, which makes you dependent on other people for your income.

      NOW is a good time to be a product developer, creator and to become self reliant, sure, keep affiliate income alive as long as you can, but don't depend on it.

      GordonJ
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    • There is a very sound business reason for commission rates. It is not an entitlement for affiliates. Companies that pay "great" commissions generally suck at marketing and making sales themselves.
  • And again, you need to remember that most of the buyers are now finding their ways to Amazon given the peculiar situation they find themselves in so amazon wants to keep most of the profit.
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  • I goofed with my previous post by putting an 'illegal' link in it. Apologies to anyone that got caught up with it. Still learning here.

    This will be an abbreviated version of the lost comment.
    Several years ago I made a serious attempt to us Amazon FBA sourcing product from China and shipping it in. Had some challenges and learnt a lot.
    However I felt that over time fees increased a little or new ones were added like the long term storage fee. And you were always being encouraged to use their advertising or some other system they controlled.

    After a few years of trying to make a profit I took advantage of an Amazon offer for free shipment to remove stock from their warehouses. Once it was shipped out I closed my Sellers Central account for good.

    Lots more could be said but I think the bottom line is that you are never really fully in control of your own destiny using systems that are owned by another party.

  • Of course you aren't - nor should you be. Whether Amazon or social media platforms - or a forum's marketplace - you are advertising on a platform you don't own and don't control. It can work great...until it doesn't.
  • This is great news for marketers who know how to craft deals with dropshippers
  • Totally not surprised. He who has all the gold, makes all the rules.
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  • It's time to diversity. There are many affiliate programs other than Amazon. When you rely on one source of income, bad things happen.
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    • Agreed, but diversity should be part of your strategy from the start to be fair.
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    • It has always been.

      Having your income come from 10, completely unrelated, sources always puts you in a bettet position than having it come from one.

      Selling t-shirts on amazon or ebay us better than doing it just on amazon.

      But not as good as selling office furniture and t-shirts on amazon and ebay.

      I am afraid many will start using 2 platforms to sell the same thing and feel they have diversified aplenty.


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  • Personally, I have always been a member of several affiliate networks and tried to find unique products that are not offered on Amazon. Although they are few and far between, they are there.

    One thing to keep in mind right now is many people are going to be more inclined to buy from smaller companies as opposed to the giants even online. And, you can add this as part of your marketing strategy. (this is just my personal opinion)

    For me a good start for an alternative to Amazon would be Share-A-Sale, real easy to search and find vendors and real easy to get approved

    al
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    • How to find unique products that are not offered on amazon?

      Thank you.
  • Usually any product sold on Amazon can be found elsewhere. This is only one of many outlets used by wholesalers and manufacturers.

    I have made a fortune leveraging the Amazon affiliate program for my MLM company over nearly 25 years, and there has been about 4 major reductions in commissions during this time.

    So this is nothing new, and we should expect further commission reductions as Amazon grows. But I have no intention of leaving the Amazon affiliate program just yet.

    Playing off this unique business model is perhaps now more than ever an "unprecedented" opportunity, as wave after wave of Amazon affiliates abandon ship.

    Other companies are suddenly offering their own affiliate programs, as well as legacy affiliate platforms (CJ, Shareasale, Rakuten, etc) experiencing a new "gold rush" in filling the vacuum.

    But there is no other company with Amazon's name recognition, nearly universal trust, and unbeatable conversion algorithm. As much as half of all e commerce is through Amazon.

    In my not so humble opinion, Amazon is a priceless tool for building lists, cold market conversion, and quickly identifying best selling products.

    They're still the best whore the world has ever seen.
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    • And the buyer traffic is already there.

      Second best for buyer traffic is eBay. And if you have your own eBay Store you can offer bonuses 24/7/365 unlike Amazon.
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  • Sad to hear that but I stopped all my Amazon affiliate sites. So it's not much of a concern to me. But I am afraid the trend will continue to Amazon Merch POD too. That is where I am doing something nowadays. Be nice Amazon!
  • AMAZON treats you like an employee, while over at ebay, you're still an entrepreneur.


    Maybe we should buy from EBAY sellers, instead of bowing down to Bezos.


    "richest man in the world" indeed.


    I think Paul Salvadge (sp?)

    ... warrior forum name: savidge4
    has some ideas on how to make $100,000 a year selling on ebay.

    Maybe he can start a thread called
    AMAZON SELLERS VS. EBAY SELLERS.

    Just thinking
    Linwood

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    • We're mere pawns. Everyone, including employees, investors, suppliers, vendors, etc have always been Bezos' pawns since the very beginning for achieving his ultimate dream; an intense all-consuming obsession mentioned in his high school valedictorian speech:
      When Jeff Bezos graduated from high school in 1982, he had big plans to change the world.

      The commission percentage really have never been all that great (except as much as 15% for a short period back in the day), but when used as a marketing and list-building tool, the shopping pattern data and customer base you can develop are priceless. Bezos has made a lot of his pawns rich.
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  • I can honestly see Amazon Affiliate Program diminishing more in the future if not discontinued.

    Amazon is a world recognized online retailer, and as such, has the authority to tell their sellers to create high quality content for their listings instead of those vague listings you still see from time to time.

    Amazon is their own authority today, and I am pretty sure if they shutdown their affiliate program today, I think amazon would be just fine, and amazon could be testing this theory by implementing cuts on commissions.

    and I am sure none of this has anything to do with amazon building brand new plants, ROFL.
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    • They have been adjusting and reducing affiliate commissions for years, and every time there has always been a huge backlash and outcry by affiliates. This is free advertising for Amazon.

      Most likely, the affiliate program will never be discontinued. Just expect more changes to come. The affiliate teasing by this genius marketing machine will always continue.
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    • True, you have said what I have always imagined would happen. But wait, Nike and Cocacola have a name but they still spend millions of dollars on advertisement. Reason? To remind clients of their existence.
  • To me, this kind of makes the idea of being self-employed almost feel like a job again. The big company Amazon decided to cut your pay, and now you are at their mercy.

    This holds true for any business in which you rely on their platform and traffic to get paid.

    I find that it's best to try and "own" as much of my business as possible. If I create the product, host it on my own website, own the email list, etc...then I own all that.

    If, on the other hand, you rely on affiliates, adsense ads, etc...then you are kind of at the mercy of whatever they decide to do.

    Just food for thought.
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    • I get what you are saying.. but lets throw this into an amount of context. The idea of getting paid by selling your own product vs getting a paycheck from selling someone elses.. comes down to what you can bring to the table.

      YOU Bkelly301 are an example ( that is few and far between ) of someone that can BRING VALUE. Its that VALUE that separates getting paid vs getting a paycheck.

      How many times here ( the WF ) have we read "Hey I just started IM this week and launched my first product on getting traffic.. How do I get traffic to my sales page?" There is obviously no value.

      So you either have experience... I have played guitar since I was 8.. or I have been developing websites since 1997 and with that experience there is VALUE. The opposite is losing your job as a shelf stocker and realizing you want more in life and deciding you are going to take on making money online... and creating a product. ( There is NOTHING wrong with stocking shelves BTW - it pays the bills and that in un itself is a good start )

      I would suggest the reality is there is this obvious 2 fold divide in terms of level of marketers.. the ones that have something to offer, and then the opposite being those that need to sell someone elses product in order to gain an amount of experience to turn around at a later point and have VALUE.

      I personally operate on a whole lot of platforms eBay, Amazon ( both selling and Affiliate ), Etsy, Facebook ( Marketplace and a facebook shop ) Craigslist, Selling my own services, services related to selling for my clients etc. To some extent I do all of these things to better understand for my clients the best PLATFORM to match my clients needs. I only provide what it is I KNOW... vs what I client says they want - and then faking it to make it.

      Understanding and being honest with the amount of value, or the need to educate yourself to create value is critical. From there understanding what you have to sell and where specifically or more specifically what platform to sell on is REALLY important.

      Success comes down to VALUE. how much do you have to offer, becomes the leverage between buying and selling. I don't know a thing about working on cars so I hire a mechanic vs I have all the tools and have worked on them for years and fix my own. This point of leverage exists in all aspects of life, not just "Online".

      When we look specifically at a platform like AMAZON... I wouldn't think it to hard to think about "Supply and Demand" and understand the supply of affiliates is actually greater than the demand of product. I could suggest that Amazon is reached a breaking point where the saturation of affiliates is disrupting in a bad way direct sales.

      And what I am suggesting here is not that Amazon is losing money by paying affiliates, they are losing conversions regardless of affiliate or direct because of the shadiness of many Amazon affiliates. How often have you ( the reader ) gone looking for something and seen amazon affiliate page after amazon affiliate page and finally went somewhere else and maybe paid more, just so you dont buy on Amazon? I dont know specific numbers... but i know this is happening at scale - and THIS is what Amazon is fighting with.

      just my $.02 and maybe a bit more lol
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  • Banned
    Back when Amazon had that issue with Sales Taxes for each State I have been cold to take that path but I have seen people making serious bank with it.

    I saw someone just sell a eCommerce Amazon site at auction the day before the announcement for a great price. Hope they are both equally happy.
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  • All the big corps do this one way or another after they grow a big enough business and it leaves the little guy in the dust. One thing is certain -- CHANGE!
    The key is to find a new way to make a buck online by being creative. Good luck!
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  • I am not suprised, considering the current econmic reality. It however calls for a rethink for those of us in partnership with Amazon.
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  • I really do believe Amazon is trying to get rid of the little guy.
  • Everybody's being hit right now so there's not much shock in this change of commission. If you've been relying on Amazon's associate program for the bulk of your income, now is a good time to start selling your own products.
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  • May was just my biggest month for Amazon profits ever!

    The commissions dropped drastically but people were buying a ton of stuff. My click-throughs were like normal but once people got there they bought many more items than in the past.

    At least while it lasts...

    Get targeted traffic -> Get them to click through to Amazon -> Make money.

    When the buying starts to die down again the only way to keep profiting from Amazon will be to keep increasing buyer traffic.
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    • Amazon is getting record sales, and buyers may not revert to their old habits when the pandemic ends. There is no end in sight for Amazon buying to die down.

      Affiliate commissions most likely will continue to drop, but brand recognition and traffic conversions will continue to dominate across every demographic and market.

      The competition from other Amazon affiliates who have never learned to leverage this marketing monster and adapt to reduced commissions is getting wiped out at a record rate.

      Get targeted traffic -> Get them to request a discount code by subscribing to your list -> Send them discount code -> Get them to click through to Amazon -> Send them more products with discount codes -> Get more targeted traffic -> Repeat -> Get private deals from your top selling Amazon vendors -> Make lotsa and lotsa more money.
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