Wow — Amazon just essentially killed their affiliate Program.
Amazon has announced new commission rates for their affiliate program Amazon Associates — and they are game changing. Take a look at the changes …
- Furniture, Home, Lawn & Garden, Pets Products, Home Improvement — 8% to 3%.
- Musical Instruments, Headphones, Beauty, and Industrial supplies — 8% to 3%.
- Tools and Outdoors — 5.5% to 3%.
- Baby Products and Sports — 4.5% to 3%.
- Health & Personal Care and Amazon Fresh — now 1%
The few remaining categories presumably stay the same. We will check the new rate card when it is published on the 21st.
Here is the current rate card that will be replaced …
These were already very low commission rates but Amazon has a higher conversion rate. Shoppers often bought other commission generating items. For many the calculus worked to send their traffic to Amazon.
The new rates though topping out at 3% will cause a huge decrease in revenue for everyone.
Here is the official rate card effective 21 April …
That is a 50% – 60% cut in commissions for the major categories that affiliates focused on. For most affiliates this is not sustainable. It was always risky to be an Amazon-only affiliate. They have a history of terminating accounts without clear explanation, changing api rules and reducing commissions. They are more of a benign dictator than a partner for most. Now not so benign.
With almost all commission rates being 3% it just makes little sense to focus exclusively on Amazon. Sure you get cross sells with customers purchasing other items, but it will just not be enough. If you have an average transaction value of $100 (which is high for many niches) you will get $3. The amount of traffic it will take to earn that $3 is best sent somewhere else.
We have an entire category of posts for non-Amazon affiliate programs. It is time to start at least adding more than Amazon to your site.
The timing of these changes is cruel. Actually contemptuous — they just don’t care about their affiliates. You have people home who lost their jobs to a pandemic. Many people use affiliate sites as a side-gig or extra source of income to make ends meet. Now you are laid off and take a 50% + cut on your part-time job too. Many of the full-time affiliate marketers and affiliate site developers will join the ranks of struggling businesses. This is fresh on the heels of developers having to rewrite our products to support the new PA-API 5 and deal with a reduced market size due to the tightening of API access. I suspect the big players like Wirecutter got a special deal but have no proof of that. If not, there are some good-sized employers that will be adding to the staggering unemployment rolls.
I guess Amazon also was struggling during these hard times and needed to shore up their business … NOT.
Amazon is one of the only companies flourishing during the pandemic. Their stock hit an all-time high on the day of these announcements. They have a market cap of $1.1 Trillion.
What has changed in the Amazon Affiliate commission payments?
Many categories rates have changed. Some as much as -70 %.
When do the changes take effect?
They changes will be effective on 21 April. Less than 1 week after notification.
Is The Amazon Associate Program still worth using?
The rates are now low enough that you should consider some additional programs. I would not be 100% Amazon affiliate income as a business model.
What should affiliates do?
Look at more affiliate programs -- we discuss many. Look at recurring affiliate programs. Add more info type content and get some advertising money.