Amazon Cutting Affiliate Rates Threatens Niche Site Owners
If you rely on the Amazon Associates program for income, now’s the time to diversify
Amazon is reducing affiliate commissions drastically according to reports from domainnamewire.com and multiple other sources.
Affiliate commissions are what you get for sending referral traffic to the multinational tech giant’s platform. If I click on your affiliate link, then buy a pair of headphones, right now, you’d get 6% of the item’s sale value. As of next week, it’ll only be 3%. If you earn your living this way, that hurts.
According to the buzz on both social media and many marketing related blogs, on April 14th, 2020 Amazon sent an email to their affiliates. The email wished them well but unapologetically announced that commission rates would be slashed by as much as 80% in some categories.
I’m not very good at math, so I decided to do some calculations on my phone.
If an associate was earning $5,000 per month and suffered an 80% reduction on all commissions, they’d be left with $1,000 per month.
An affiliate website that earns $5,000 per month is a good-sized business — they are regularly sold on Flippa.com for $100,000 and more.
An affiliate website that earns $1,000 a month is not enough income to support a single adult where I live.
Here are some more numbers. I didn’t want to steal anyone else’s images or risk screenshotting Amazon’s website, but you can see the evidence for yourself in the “What’s Changed” section of their affiliate program sit.
Products categorized as furniture, home and lawn care, and pet and pantry will now earn 3% commissions rather than their previous 8%.
Products categorized as headphones, beauty, musical instruments, and business and industrial supplies will now earn 3% versus their previous 6%.
Outdoors products and tools will receive a 3% commission rather than 5.5%.
Sports and baby products will be diminished from 4.5% to 3.5%.
Grocery, healthcare, and Amazon Fresh products will all bee knocked from 3–5% down to 1%.
This may be a serious blow to many online businesses that were previously weathering the economic storm caused by Coronavirus. However, not all affiliate marketers are fearful of the changes. In a recent YouTube video, marketing mastermind Miles Beckler said the following:
“We’re not married to [Amazon], we’re not handcuffed to them, and honestly I don’t personally believe that this is that much of a problem.”
The good news for Amazon associates is that most niches have good alternatives available. Lots of online retailers have their own affiliate networks or are integrated through a network such as Shareasale or Rakuten.
The unfortunate reality though is that some businesses (such as pet-related bloggers) will need to scramble in order to either sell more or find new sources of income.
Hopefully, these changes won’t ruin anyone, but if you’re getting into the affiliate marketing game, take this as a caution to carefully consider your options before relying on Amazon’s associate program. If Beckler is right, then Amazon's affiliate commissions may continue to shrivel up or even disappear entirely.