The fact that one of the biggest companies in the world also runs one of the biggest affiliate marketing programs out there, comes as a surprise to none. The Amazon Associates program is responsible for creating passive income streams for bloggers, YouTubers, influencers and other social media marketers.
But in April 2020, affiliate marketers took a big hit when Amazon decided to change the payout rates. While this issue might seem insignificant in light of the pandemic-induced economic crisis, it is worth noting that the people who were dependent on this stream for their income have been at the receiving end of some serious and devastating losses.
To understand whether the commissions are worth the effort, we must first understand how affiliate marketing works and what changes in rates for the Amazon associate program are all about.
How Does Amazon Affiliate Marketing Work?
When a person earns a commission for advertising a company’s or another person’s product through their content or marketing campaigns, it is known as affiliate marketing. Lately, the process of promoting the products has become easier due to Amazon Associates. The affiliate only has to search for the product that they like and include it in their blogs or videos via a specialized link provided by Amazon.
Now, every time someone buys the product through that link, the affiliate gets a small piece of that profit. The eligibility for the payout may vary from customer to customer- some might get paid per click, while others get paid for the number of leads they are generating, but most of them get paid per sale.
The reason for the change of rates is still unknown. But there are few assumptions that are doing the rounds on the internet. One of the major assumptions is that the sellers on amazon requested Amazon to reduce the rates to help them cope with the pandemic. Some others are saying that Amazon just wanted a bigger piece of that sweet profit cake. Amidst all this speculation, the real reason behind the changes coming into effect continues to remain elusive at large.
The following table sheds light on some of the pre-pandemic rates:
|Physical video games and video game consoles||1.00%|
|Televisions and Digital Video games||2.00%|
|Amazon Fresh and toys||3.00%|
|Various amazon devices, watches, jewellery, luggage, shoes and handbags||4.00%|
|Digital music, Grocery, Physical music, digital videos||5.00%|
|Furniture, Home improvements, pantry, lawn & garden||8.00%|
|Luxury beauty, amazon coins||10.00%|
During the pandemic, Amazon not only changed the payout rates but also made new groupings of products. They are reflected in the table below:
|Furniture, home improvement, lawn and garden, home, pantry, pet products,||3%|
|Beauty, headphones, musical instruments, business, and industrial supplies||3%|
|Health and personal care||1%|
Amazon used more vague terms to describe the product categories. Amazon doesn’t need new marketers to promote the sale, it can very well do it on its own. The product marketers and the affiliates are upset because they were directly responsible for generating traffic on this website and are the reason for the growth of this company in the first place.
Below we have compared the commission rates of Amazon Associates with the affiliate programs of some of its competitors:
|Furniture, home improvement, lawn and garden, home, pantry, pet products,||3%||4%||4%|
|Beauty, headphones, musical instruments, business, and industrial supplies||3%||4-5%||4%|
|Health and personal care||1%||1%||4%|
Amazon Associates Commissions: Still Worth It?
In the greater scheme of things, one can possibly argue that something is better than nothing. Even though Amazon has reduced the rates, it has also removed the 0% commission clause from its programs. Therefore, you can still generate revenue.
The more established content creators and marketers might be unbothered by this because they will still generate a ton of traffic through their content, which in turn will generate a good amount of commission money. Besides, there is always an opportunity to run an independent campaign using affiliate software with integrated management and analytics. These bloggers and content creators might as well collaborate directly with the product brand and pocket a larger commission themselves.
However, the narrative is somewhat different for the amateurs and the budding content creators and social media marketers out there. They might not have enough traffic on their own content to collaborate directly with the bigger brands, so they have to rely on the Amazon affiliate program to generate revenue, notwithstanding the low revenue generation.
The setup for the affiliate program is fairly easy and offers valuable information. There is no black or white answer to this question. As long as you can generate traffic on your website, you can generate revenue through the Amazon affiliate program.
Alex Sysov is CEO and CoFounder of PromotionStep