Here are the important additions and alterations to the Amazon Associate program that you need to know.
The Big One– Commissions and Payout Scaling
Back in spring of 2017, Amazon sent out an email to all their affiliates informing them that there was a drastic change in the program’s fee structure in the works. For much of the program’s history, affiliate commissions have been based on a variable standard program fee rate. But under the new policy guidelines, there are flat rate percentages earned based on what category the items purchased fall under. Basically, Amazon Associates is no longer functioning with volume based commissions. Under the old policy, the more you sold, the higher the percentage of your commission. But as of March 1, 2017, that element of the Amazon Associates program took a hike and was replaced by an entirely new commission model.
The New Rates
Now, Amazon Associates operates with fixed standard program fee rates. What this means is that some categories of products on the Amazon website will be worth a lot less than other categories. For example, video game consoles, TV equipment, PC products, and Blu-Rays earn only 1 to 2.5% commission—regardless of the volume of products sold– while apparel, luxury beauty, and Amazon coins earn a 10% rate.
Ultimately, how this affects individual affiliates is based on the size of their client base and the specific categories they promote through their sites and blogs. If you happen to be one of the affiliates who focuses on higher earning categories, you may actually come out of this transition on top. But as it really seemed back in March—and as many Amazon Associates have experienced in the past few months—there is also huge potential for severe pay cuts.
Why These Changes?
Despite what some people are claiming, it is unlikely that Amazon made these changes to spite their loyal affiliates. As Amazon continues to develop their brand and extends their reach, Amazon Associates play a methodical part in their business. If you examine the top-ranking items on the new flat rate scale, many of the high percentage categories consist of Amazon’s own products—such as smart TVs, Kindle devices, Amazon coins, and Amazon Echo—while the lowest ranking items are more traditional mediums and outdated technologies—such as TVs and printed books. While it’s foolish to assume Amazon isn’t saving money from the policy change, it is equally ignorant to dismiss that this is—in part—a smart business move to remain relevant in the highly digital era and to encourage affiliates to promote the Amazon brand.
The new policy brings many new challenges to affiliates, but also potential opportunities. While previously you may not have considered dabbling in certain categories, this could be a great chance to expand your reach, gain new online following, and make even higher percentage commission from certain categories. Many Amazon Associates have already begun to take this perspective and have—as a result—not seen a negative shift in their affiliate income.
Online, Change Is Inevitable
It’s no secret that since the new policy rolled out, many affiliates have openly expressed their frustration with the new system. But it’s important to keep in mind that Amazon—as it evolves with the changing digital industry—offers other promotional features by which affiliates can benefit and has made some changes that really are for the better.
This year, Amazon launched a new version of their affiliate program for local businesses. This allows companies—like salons and florists—to create their own pages on Amazon and suggest commission-earning products to customers that they don’t carry in their store. This sort of concept suggests that Amazon is invested in their affiliate partners and their prosperity, which is a comforting reminder during this transitional period.
At the end of the day, long-time Amazon Associate members will find a way to carry on, as they always have. And with the numerous opportunities to make extra cash from Bounty Deals and ever-improving user friendliness of the online platform, it doesn’t seem like the Amazon Associate program—or their affiliates—are going anywhere soon.
Remember one of the key elements is diversifying your revenue portfolio. If you are a successful Amazon associate it might be time to take the plunge into launching your own FBA business. Regardless of the changes remember to build your business around your goals and lifestyle and not Amazon terms and conditions!
Thanks for reading.
Tom Buckland is a digital marketing consultant specializing in Amazon optimization, influencer marketing and outreach. For more information feel free to visit: https://amazonseoconsultant.com