How Much Should You Pay An Amazon Influencer? [GUIDE]
- How much should you pay an Amazon Influencer? The answer may surprise you. This is because it is generally a combination of your acceptable cost to acquire a customer, the value you’ve placed on brand awareness and consideration that the Amazon Influencer also earns a small commission from Amazon, not the Seller, for referring a sale.
- Amazon Influencers have been around a lot longer than you think, recommending products on Amazon and partnering with brands since the inception of the Amazon Associates Program in 1996.
- The Amazon Influencer space, just as the Influencer Marketing space in general, has no set value on how much an influencer is worth. Although the longevity of the practice is staggering and an indication that Influencers are nearly invaluable. Influencer Marketing has been successful for brands since 1760 when Robert Wedgewood of Wedgewood China started using endorsements from the Royal Family to boost their pottery sales.
It’s hard to survive on Amazon, let alone thrive nowadays without driving traffic from off of Amazon onto Amazon.
This impacts how visible you are in Amazon Product Searches, your ad costs, ad visibility and much more.
This is why Amazon Influencers have been so powerful for brands since 1996 and they can be for you too.
For every dollar you spend on Influencer Marketing, statistics show that you’ll average a $23 ROI. Most ROI shoots for a 5:1 ratio, so you can see just how wild these statistics really are. — Neil Patel
Amazon Influencers recommend products to their audiences in exchange for a commission from Amazon when someone buys.
This is EXACTLY how to determine how much to pay an Amazon Influencer.
How Do Amazon Influencers Get Paid?
Amazon Influencers get a small percentage of sales paid by Amazon which is why the Amazon Influencer market has been around for over 20 years.
However, some of the best Amazon Influencers are so good at referring sales on Amazon that they realized they could also increase their own revenue by charging the product owners for placements on their websites, YouTube channels and wherever they have an audience. (remember, these are business people themselves and are entitled to make additional revenue in a free market system).
There are situations where Amazon influencers and Amazon Live Influencers are still willing to place products in their content in exchange for free samples. But increasingly, the Amazon influencers landing at the top of search results require additional payment beyond free samples.
How Much Do Amazon Influencers Earn Per Sale From Amazon?
Whether Amazon Influencers are referring sales from their blogs, social media or YouTube, they earn a commission from Amazon for each sale they facilitate.
Same goes for Amazon Live Influencers promoting products on Amazon Live.
Here is how much Amazon Influencers earn…
Amazon Influencer Commission Rates:
Video games and game consoles
1%
Televisions & digital download games:
2%
Computers, computer accessories, DVD & Blu-Ray:
2.5%
Amazon Tablets & Kindle devices:
4%
Paper Books, Health & Personal Care, Sports, Kitchen, Auto & Baby:
4.5%
Digital Music, Video Downloads, Grocery, Handmade, Musical Instruments:
5%
Business & Industrial Supplies:
6%
Clothes & Accessories, Amazon TV’s, Echo’s & Jewelry:
7%
Furniture, Lawn & Garden, Home Improvement, Prime Pantry & Pet Products:
8%
Amazon Fashion Items & Amazon Coins:
10%
How Much Does An Amazon Influencer Cost?
What influencers charge can vary widely. Influencers with tiny followings may actually request more than their counterparts with massive followings.
Or vice versa. And just because it may seem illogical that you would pay more for less visibility, maybe that tiny following is way more devoted and actually buys more of the products recommended than the influencer with the large following. This obviously further complicates how to price influencers.
How Much Should I Pay An Amazon Influencer?
So, what do you need to know to properly assess how much you are willing to pay an influencer?
The first thing is to know how much a customer is worth to you. If you sell a product that is primarily a one-off type purchase meaning your customer isn’t likely to return to buy more of that or any of your other products then this is a fairly simple equation — a customer is worth slightly less than your gross profit on your product.
If you want to take this a step further you could divide your total fixed costs for the year, divide that by the number of products you expect to sell and then subtract that number from your gross profit. That number is the most you can afford to pay to acquire a customer.
However, if you have a product that customers may purchase repeatedly or you have great product inserts with good sales pitches for related products then you will need to know the Lifetime Value (LTV) of a customer.
This is how much you can reasonably expect to make from a customer over the lifetime of your relationship with them.
For example, if you know that on average a customer buys three products from you then you would multiply the average total sales for a customer by your average gross margin to get the LTV.
Let’s say that a customer makes a purchase and then comes back and makes two more from you totaling $150 in gross sales. If your average gross margin is 30% then that means you can expect to make $45 on that customer during their lifetime as a customer.
That means you cannot afford to pay more than $45 to acquire that customer.
The final piece is to determine how much traffic an influencer may send to your page and then how well your product page is converting.
For an influencer’s blog page you can see average monthly views, but you can also ask the influencer to see click throughs to amazon from their other articles and use that as an average for how much traffic you may get.
Multiply that number by your conversion rate and you will have the number of customers you can expect to gain from that influencer.
In an ideal world you want to pay the influencer less than what you expect to gain.
How To Determine The Value Of Brand Awareness From An Amazon Influencer
While these give you the raw numbers of what a customer may be worth to your business, it is important to remember the value in brand awareness and brand recognition that an influencer can bring for you as well.
Even though an influencer’s follower doesn’t click on your link and buy immediately, they may remember your brand or product at a later time, especially if you have good presence across multiple influencers.
Since you will only have your side of the equation when initiating the conversation with an influencer it is tough to offer them a concrete number.
However, you can determine a range that you would be willing to pay based per user that they send. For example if you expect to make $15 on a transaction and you know your conversion rate is 5% — meaning that you need 20 people to visit your site for every one purchase, you can approach a perspective influencer with the following proposition:
“I typically pay $0.50-.60 customer that you can send me.” Fifty cents multiplied by the 20 viewers you need to convert one is $10 spent on leads for that $15 in profit.
Depending on your business model, you may only be able afford much less. Or, maybe you can afford to pay much more, especially if you are focused on building your brand over the longer term.
No matter what you are willing to pay, approaching the influencer first with concrete numbers and thoughts will let them know that you are serious and you know what you are talking about.
They may have unrealistic expectations of their value (and some may be worth it based on brand alone), but when you make the first move based on facts at least they know where you stand and how to proceed from there.
Then ask them for proof of their traffic counts and click-throughs via screenshots of Google Analytics.
You can reasonably assume that they will select some of their higher converting content, so don’t hesitate to try to negotiate on the lower end of that or ask for data from specific or multiple pages.
Whatever you do, don’t let emotion or gut feeling drive your willingness or unwillingness to pay a particular price.
- How much to pay an Amazon Influencer is generally a combination of your acceptable cost to acquire a customer, the value you’ve placed on brand awareness and consideration that the Amazon Influencer also earns a small commission from Amazon, not the Seller, for referring a sale.
- There is no standard rate, just in any form of Influencer Marketing.
- Amazon Influencers earn a commission from each sale they refer to Amazon. Because they have skin in the game, they are incredibly effective at driving sales to your Amazon listings.
- Influencer Marketing has been successful for brands since 1760 when Robert Wedgewood of Wedgewood China started using endorsements from the Royal Family to boost their pottery sales.
- The first thing is to know how much a customer is worth to you. If you sell a product that is primarily a one-off type purchase meaning your customer isn’t likely to return to buy more of that or any of your other products then this is a fairly simple equation:
- A customer is worth slightly less than your gross profit on your product.
- If you want to take this a step further you could divide your total fixed costs for the year, divide that by the number of products you expect to sell and then subtract that number from your gross profit.
- That number is the most you can afford to pay to acquire a customer.
- However, if you have a product that customers may purchase repeatedly or you have great product inserts with good sales pitches for related products then you will need to know the Lifetime Value (LTV) of a customer.This is how much you can reasonably expect to make from a customer over the lifetime of your relationship with them.
- The final piece is to determine how much traffic an influencer may send to your page and then how well your product page is converting.
- For an influencer’s blog page you can see average monthly views, but you can also ask the influencer to see click throughs to amazon from their other articles and use that as an average for how much traffic you may get.
- Multiply that number by your conversion rate and you will have the number of customers you can expect to gain from that influencer.In an ideal world you want to pay the influencer less than what you expect to gain.
Originally published at https://www.referazon.com
