It comes as no surprise to any that one of the largest companies in the world also runs one of the largest affiliate marketing programs. The Amazon Associates program is responsible for creating passive income streams for bloggers, YouTubers, influencers and other social media marketers.
However, in April 2020, affiliate marketers were hit hard when Amazon decided to change their payout rates. Although this issue may seem insignificant in light of the economic crisis caused by the pandemic, it is worth noting that people who depend on this flow for their income are facing serious and devastating losses.
To understand if commissions are worth the effort, we first need to understand how affiliate marketing works and what the changes in rates are all about for the Amazon affiliate program.
How Does Amazon Affiliate Marketing Work?
When a person earns a commission for advertising a company or another person’s product through their content or marketing campaigns, it is called affiliate marketing. Recently, the process of promoting products has become easier thanks to Amazon Associates. The affiliate simply needs to search for the product they like and add it to their blog or video via a special link provided by Amazon.
Now, every time someone buys the product through this link, the affiliate gets a small portion of that profit. Eligibility for payment can vary from client to client – some get paid per click while others get paid for the number of leads they generate, but most get paid per sale.
The reason for the rate change is not yet known. But there are a few assumptions floating around the internet. One of the main assumptions is that sellers on Amazon are asking Amazon to lower rates to help them cope with the pandemic. Some say Amazon wants a bigger piece of this sweet profit pie. Amid all this speculation, the real reason behind the changes to take effect remains largely elusive.
The table below throws light upon 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, Market, Physical music, digital videos||5.00%|
|Furniture, Home improvements, pantry, lawn and garden||8.00%|
|luxury beauty, amazon coins||10.00%|
During the pandemic, Amazon not only changed payment rates, but also introduced new product groupings. 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||%one|
Amazon used more vague terms to describe product categories. Amazon doesn’t need new marketers to promote selling, it can very well do it on its own. Product marketers and affiliates are upset that they are directly responsible for generating traffic on this website and are the reason for this company’s growth in the first place.
Below, we’ve compared Amazon Associates’ commission rates with some of its competitors’ affiliate programs:
|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||%one||%one||4%|
Amazon Associates Commissions: Are They Still Worth It?
In the larger scheme of things, one could possibly argue that something is better than nothing. Although Amazon has lowered rates, it has also removed the 0% commission from its programs. Therefore, you can still earn income.
More established creators and marketers might not be bothered by this because they will still generate a ton of traffic with their content, which in turn generates a good amount of commission money. Also, there is always the opportunity to run a standalone campaign using affiliate software with integrated management and analytics. These bloggers and creators can collaborate directly with the product brand and receive a larger commission themselves.
However, the narrative is a little different for amateurs and budding content creators and social media marketers out there. They may not have enough traffic on their own content to collaborate directly with bigger brands, so they have to rely on the Amazon affiliate program to generate revenue despite low revenue.
The affiliate program is fairly easy to set up 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 income through the Amazon affiliate program.
Alex Sysov is the CEO and Co-Founder. PromotionStep