Amazon Slashing Commission Rates On April 21

Cash Builder

Cash Builder

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I just received an email from Amazon Associates saying that they are slashing commission rates in some categories again.

Full list: https://affiliate-program.amazon.com/help/operating/compare

There are some big reductions coming that will hugely impact a lot of people’s income.

Furniture, Home, Home Improvement, Lawn & Garden, Pets Products, Pantry – 3% down from 8%

Headphones, Beauty, Musical Instruments, Business & Industrial Supplies – 3% down from 6%

Outdoors, Tools – 3% down from 5.5%

Grocery – 1% down from 5%

Health & Personal Care – 1% down from 4.5%

The last big change to Amazon commission rates was back in 2017, IIRC that removed the high volume bonus and changed it to a category based commission. That update hit a lot of affiliate’s earnings, and this one will do the same.

There has been some chat recently about whether Amazon Associates is a viable long-term business strategy. The consensus is that although it won’t disappear anytime in the near future, it will become less and less profitable. This update seems to confirm that train of thought.

Time to diversify?
 
Tyranny of the bean counters.


Hopefully this opens up enough network effect that we can get a new competitor in the space.
 
What a time to make this announcement.

“We know your families are close to financial ruin and the global economy is in the toilet, so we’ve decided to cut your pay in half- remember to buy from Amazon!”
 
This is rather unfortunate but not entirely unexpected since every advertiser is slashing spending. I'm hoping it's a temporary measure. It certainly opens up room for a competitor(s) to swoop in.

I messaged their support about 1) what commission rate we'll earn on items that were ordered before April 21 but shipped after (the rep is going to email me back with an answer, will update after I get it) and 2) if this is a temporary rate change due to COVID-19 or if it's the new normal (usual response of 'this is the rate until it isn't').
 
Here's a chart that someone on /js put together:

EtXjTEn.png


Perfect timing from their side. Everyone is buying from Amazon right now. My RPM has been through the roof in the past few months because of all the random stuff people keep buying while they're on my Amazon cookie.

The bad:

I'm expecting my earnings to get slashed in half. I've been relying on Amazon too much.

The good:

This won't kill me.

I've got display ads thrown in the mix now. Even with RPM's down, they're a nice augment. And people will keep buying tons of stuff from Amazon for the next 2-3 months, despite the rate slash.

I've finally gotten my drive back after slacking off for a couple of months. I'll do everything I can to leave Amazon and add alternative programs. Got a few diversification ideas on how to come out of this stronger.
 
Amazon's starting to ride that line where it's going to look real good to affiliates to push their competitors.

The question becomes, if I direct traffic to their competitors in my niche who still offer the old percent and probably will keep doing so, will that 50% make up for all the random items you get credit for on Amazon?

There's going to be a whole lot of sites that stay the course because it's easy. But as people build new sites, there will be a new generation of sites growing that won't use Amazon as much.

But yeah, I'll be taking quite the hit to my commissions again. Thankfully I'm monetizing in more ways than one and Amazon isn't the biggest one, not by far.
 
That's awful and I think they went to far this time.

While affiliates are not considered "victims" in the Covid grievance game, Amazon should be careful. Adidas and other companies have gotten into some serious shitstorms, for not paying their landlords among other things. Right now is not the time for the richest companies in the world to play the scim game.

We'll see, there might very well be a backlash, some competitor might think that they'd like to leverage the world's collective affiliate traffic to grow quickly.
 
Sucks big time. But it's just an economic decision for them.

I'm taking a hit but I'm surprisingly calm. It's just another lesson never to place all your chips in one model/supplier/product, etc.

Time to actively implement other monetization strategies.
 
JamaicanMoose said:
I messaged their support about 1) what commission rate we'll earn on items that were ordered before April 21 but shipped after (the rep is going to email me back with an answer, will update after I get it)
Click to expand...

Answer: "any item shipped after the rate change will be paid at the new rate, even if the order was placed before the change."

That's a real kick in the dick.
 
I diversified from them after their last drop but still have about 30% of income tied to them. This is disgusting they had their best year in history from people during the virus buying, so instead of spreading it they choose to hoard more of it during the most inopportune time. There is a national pandemic, your making more money then anyone why would you spit in the face of your affiliates right now and put more people on unemployment.

Even google is pausing some update roll-outs because of corona...f Amazon. "
Update on 2020-04-06: We have decided to postpone this change for the immediate future due to the Coronavirus situation. We will re-evaluate this matter in June 2020.
"
 
It's not surprising and I hope it is just temporary, but they could have timed the announcement better. They are really just responding to a changing market - everyone is indoors and buying online so they are basically saying to affiliates we don't need you at the moment. That is a really shitty thing to do at a time of global crisis, but at the end of the day it is just business.

I'm not worrying too much about it. There are a lot of other affiliate programs around, especially in the niches that are being cut the most. I have always stuck with Amazon because it is easier, and the extra products purchased made up for the lower commissions. That will most likely not be the case going forward, so it's time to see what other programs are on offer.
 
They were literally suspending non-essential shipping for some time. Lots of stuff is out of stock due to supply chain interruptions. In short, they have more traffic and customers than they need at the moment, so they cut down on marketing.

Amazon doesn't choose their rates randomly and just sees how it flies. The rates prior to the change were tailored to the market before this pandemic. The new rates are tailored to the market they expect during this pandemic. 80% rate cuts aren't going to be permanent, they don't own those "1% category"-markets yet. Look at groceries for example.
 
Cash Builder said:
It's not surprising and I hope it is just temporary, but they could have timed the announcement better. They are really just responding to a changing market - everyone is indoors and buying online so they are basically saying to affiliates we don't need you at the moment. That is a really shitty thing to do at a time of global crisis, but at the end of the day it is just business.

I'm not worrying too much about it. There are a lot of other affiliate programs around, especially in the niches that are being cut the most. I have always stuck with Amazon because it is easier, and the extra products purchased made up for the lower commissions. That will most likely not be the case going forward, so it's time to see what other programs are on offer.
Click to expand...

This is not temporary, in one of my seo groups a person posted a convo with amazon customer service they confirmed its not a covid change, its permanent.
 
I must admit that I felt dread in my chest/stomach when I first read that email in my inbox. It was this animal "fight or flight" instinct as if I had just lost a bunch of money. (Yes, this is my first rodeo)

Here's how I reframed the situation, might help someone:
  • Amazon is just an affiliate program. There's a whole world of opportunity out there.
  • Good traffic will always make money.
  • This is the kick I needed to stop being lazy and finally get serious about diversifying my income sources & making the most of my traffic. Thanks, Bezos.
 
I wonder how low it'll have to get before people start recommending products based on how good the product is. People might be forced into actually serving their readers. Strange times indeed.
 
F5K7 said:
Amazon doesn't choose their rates randomly and just sees how it flies. The rates prior to the change were tailored to the market before this pandemic. The new rates are tailored to the market they expect during this pandemic. 80% rate cuts aren't going to be permanent, they don't own those "1% category"-markets yet. Look at groceries for example.
Click to expand...

If the bolded is true then they can kiss the market goodbye , unless they're expecting Affiliates to do nothing and keep sending them traffic.

You don't kill someone's means of livelihood and expect him to do nothing despite the pool of opportunities out there.

Anyone that folds hims arms and comfortably accepts a 1% commission from Amazon , without seeking alternatives is dumb.

Potatoe said:
I wonder how low it'll have to get before people start recommending products based on how good the product is. People might be forced into actually serving their readers. Strange times indeed.
Click to expand...

Never. Unless you're doing community service and have no interest in making money.

Most people aren't recommending bad products. They're just giving the ones with more Affiliate commissions higher preference. Even our dear wirecutter does it.

Ryuzaki said:
The question becomes, if I direct traffic to their competitors in my niche who still offer the old percent and probably will keep doing so, will that 50% make up for all the random items you get credit for on Amazon?
Click to expand...

With this new rate , even the random sales isn't gonna save anyone's ass because they're not gonna be worth the same. Earnings are going to drop , no 2 ways about it.
 
There are a lot of great products that aren't even on Amazon and that don't even have affiliate programs. Everyone in this thread wants to rely less on Amazon, that doesn't just mean choosing some other network with a better %.

And heck yeah, serving an audience with the best info possible to build trust and a long term brand is a form of 'community service', but that doesn't make it charity.

Build a community and serve them, you nailed it.

Look at BuSo as a shining example of community service. Maybe there's value in that, maybe it is rewarded by the market? BuSo could be selling tons of SlightGround, HostHator and PooHost packages if they wanted to, but I'm not sure all of us would be here if that were the case. Instead, we get a community with people who are willing to contribute good stuff instead of a predatory WaFo 2.0.

Of course, building up sites and taking over a niche for a few months and having them burn out is another strategy, too. Puts you much more at the mercy of the Giants and their whims, tho. To me, the fact that your commissions can be slashed overnight is a great argument for serving a community instead of chasing the highest commissions in a hit and run without regard for community service.

Anyways, I was pretty clearly being hyperbolic...
 
Here's the message that's going around:

vZzngn2.png


It says it's not related to the current pandemic.

I think it was 2 years ago, nearly the same day that they cut rates. 2 years before that they had cut rates too. Seems like they have an "every other year" plan of cutting rates as they need affiliates less and less. Any surviving 3%+ category is next on the chopping block to go to 3%.

Who knows if it stops there but I agree with Encrypted. Anyone promoting Amazon for 1% is an idiot. I'd say we're all pretty idiotic at this point, but those people are extra change-resistant.
 
Maybe they say it hasn't to do with the pandemic, but hey ... they are cutting rates, taking their "associates" money during a time of great uncertainty.

So we all know the standard line "they can do what they want", but can they? Is there never a limit to how a monopoly or huge company can act not suffer a backlash?

I'm not so sure.

Normally, maybe, but during a time of great upheaval, with political agendas up everywhere.

BUY AMERICAN

Is Amazon considered American still or a shill for China?

Coming up, there will be increased demand for locally produced goods and consumer products, I'm absolutely sure of it.

Begin thinking about that now. Who produces in the US? Which companies stuck by their fellow countrymen during the crisis, who fucked them over. Then market those and make sure to tell people to "buy american", make a big sticker on that product: Made in the USA.
 
Here's Walmart's rates in case anyone is selling general enough products that they can do an easy switch over:

NrGmfAo.png


You'll still get credit for the "random items" and they have a 3-day cookie it seems. That ain't too shabby. It won't cut it for me and my industry, but someone in Home & Garden, for example, could probably do well to switch. They'll claw back one extra percent anyways, but probably lose the made up money in conversion rates.
 
brb developing businessandpersonalchecksandcontactlenses.co

Does anyone have experience with Wal-Mart? Curious to know how it stacks up with Amazon, especially for conversions. I've never ordered from Wal-Mart's website but I order from Amazon multiple times per week, so I don't really have any first hand experience from a customer's POV.

Either way, seems like a good time to add Wal-Mart next to my Amazon links for "Where to buy:"
 
Amazon is just too big. Nobody will see this coming but i'm willing to bet they will implode in time.

Blind to greed, a competitor.. one day shall do them like Google did Yahoo!
 
Darth said:
Imagine a lot of people that were gearing up to sell their associates sites (or in the middle of it) will be gutted too
Click to expand...

I could see this also rippling through to website developers having lower budgets now and being more fearful to build and spend, so that's less links being purchased, less SEO consulting, less content being ordered, lower prices for sites so brokerages might take a hit (unless higher volume of people unloading sites makes up for it for a while?), domain sales (new and used) taking a hit as people develop less, less hosting plans being purchased, less themes being bought, etc...

Not trying to fear monger, just thinking of everything related that could be impacted by people who build websites having less money.

WINNERS FROM AMAZON'S COMMISSION REDUCTION:
On the other side of the coin, for people who have cash and ideas to monetize beyond Amazon, maybe a good chance to pick up some cheap traffic/attention.

And for ad networks (looking beyond the fact that people are advertising less, ofc), it could be a plus if people decide to monetize differently and use them more aggressively. If one can make up some of those lost %'s from Amazon by switching to display ads, they can also put great recommendations and info at the top of their list of priorities, resulting in more trust from their audience, maybe higher rankings as a result of that, a lot easier to build "real" links to an article that isn't stuffed full of PROS CONS CLICK HERE TO CHECK PRICE ON AMAZON stuff.

For people in networks like Mediavine, where you can get additional sites added more easily than the first site, maybe finding fire-sale websites in the 300-500 visitor per day range is a good move since you can get that site into a premium ad network and earn a lot more than the previous owner had access to. So, you get the site on sale already, and beyond that you're also able to earn more from the same traffic.

The Athletic is a good example of a publisher with content that's so good, people are willing to pay to read it. That's another option to keep in mind.
 
I've already started receiving emails from other affiliate networks offering increased percentages in order to gain my business.

Until now, I've stayed away from ad networks like Mediavine because they look tacky af on websites and my gut says ads lower conversions (read: no data to support this other than my hatred for ads). I'm going to need to reevaluate this sentiment in the coming weeks.
 
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