Amazon slashes affiliate commissions

And Amazon Associates learn to love Amazon a little less

This bombshell hit online publishers this week, both large and small:

Amazon Cuts Commission Rates for Advertising Affiliates

….Commission rates for several affiliate product categories are getting reduced significantly. For example rates for furniture and home improvement products have been cut to 3% from 8% while grocery product commission rates fell to 1% from 5%. The commission on ads for headphones, beauty products, musical instruments, and business and industrial supplies got reduced to 3% from 6%.

The commission reductions are a significant blow to some Amazon affiliates who rely on commissions as a main portion of their income. Websites like BuzzFeed publish buy lists that drive readers to Amazon products in return for a cut of those sales.

Amazon is one of the oldest affiliate programs on the Internet. I don’t know exactly when it launched, but Amazon Associates certainly dates back to the turn of this century.

When Amazon started its affiliate program, the company was still in its early growth phase. There were still millions of Americans who were wary about entering their credit card number and personal information in an e-commerce site. Because….everyone knew that such information went straight to hackers in Moldova or the Philippines, as soon as you hit the SUBMIT button.

That was then and this is now. Times have changed. Now everyone buys things on Amazon. Amazon has become the world’s largest retailer.

And that COVID-19 thing that decimated the economy a few weeks ago? Well, it didn’t decimate Amazon’s economy. Since the start of the COVID-19 pandemic, Amazon’s business has gone through the proverbial roof. The company has announced plans to hire at least 75,000 new employees around the country.

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But Amazon still needs its affiliates, right? Well, not so much. This is the relevant economic equation:

When Amazon launched its Associates program roughly twenty years ago, it needed all the traffic it could get. Now Amazon has all the traffic that it wants.

And then some.

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Nevertheless, this is lousy timing for many online publishers—large and small—who have come to rely on Amazon commissions. Not surprisingly, the reaction from these folks has been overwhelmingly negative:

But the affiliates might have seen it coming. Amazon has been cutting commissions for several years now. The writing has been on the wall. 

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I don’t believe that Amazon is evil. But Amazon is a big corporation in a competitive field, and big corporations in competitive fields act in their own best interests. That’s how they stay on top. 

Affiliate marketing is still a viable revenue stream for an online publisher. But Amazon is no longer where the big money is. The big money is in representing those brands that want to sell online outside the Amazon ecosystem. 

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And before anyone asks: Yes, I’m an Amazon Associate, too. (See the disclaimer at the top of this site.) And no, I’m not going to remove all my Amazon affiliate links in protest. 

I sell very few big-ticket items via Amazon affiliate links, anyway. Mostly I sell books, which means 4 cents on the dollar. (That’s if they’re books written by someone else. If they’re my books, I also get a royalty share.) I never saw that as anything more than extra money…nice to have, but nothing I would ever seriously rely on.