The Amazon Affiliate Program (also known as the Amazon Associates Program) is an affiliate program used by many bloggers and affiliate marketers to make money working from home.
How it works is the Amazon affiliate places a link on their blog post linking to a product on Amazon. When a reader clicks on the link, it brings them to Amazon’s website while also including the blogger’s affiliate ID. If the reader then makes a purchase on Amazon within the next 24 hours, the affiliate receives a small percentage of that purchase because they were the ones that directed the reader to Amazon’s site.
The best part? The Amazon affiliate receives a percentage of anything that is purchased within those 24 hours. So, if the affiliate linked to a $50 item, but the reader then went on and purchased $300 worth of items, the affiliate would receive a percentage of all those sales.
Sounds pretty great, right? Well, it is. But, as time as gone on, the Amazon Affiliate Program has become less and less appealing as being the go-to affiliate program for beginning bloggers. Why? Because Amazon has sliced affiliate commission percentages twice now since 2017.
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Amazon Affiliate Program Commission Structure Changes
Pre-2017, Amazon had a “stepped” affiliate commission structure. This meant that the more products that the affiliate sold, the higher percentage of commissions they would receive. This ranged from 4% to 8.5%. This was wonderful for larger affiliates because, even if you sold low-priced items, the more you sold, the higher your percentages went up. 8.5% back on everything you sold? Talk about $$$ opportunity.
Amazon associates wanted a clearer commission structure, though. So in March of 2017, Amazon announced changes to its payout structure which ultimately ended up being a pay cut for most affiliates (including myself). Ever since March of 2017, commissions are now calculated based on which category the items fall into, not the number of products sold.
Here is what the Amazon Associates commission structure looked like on April, 14, 2020 right before the second cut happened (more to come on that):
As you can see from the chart, the commissions were decent. PCs, video games, and TVs were in the 1% to 2.5% commission range which is low. However, if your blog was in the Home/Home Improvement, Furniture, Lawn & Garden, or Pet Product niche, you could have been doing very well with a generous 8% commission.
Unfortunately, on April 14, 2020, Amazon announced yet another pay cut to their Amazon Associates Program effective on April 21, 2020 – this time much worse than the first one:
If you compare the two charts, you’ll notice some major changes and drastic cuts that have taken place. Some of the most notable Amazon affiliate commission rate cuts are listed below:
- Furniture, Home, Home Improvement, Lawn & Garden, Pets Products, and Pantry were cut from 8% to 3%
- Headphones, Beauty, Musical Instruments, Business & Industrial Supplies were cut from 6% to 3%
- Outdoors and Tools were cut from 5.5% to 3%
- Grocery was cut from 5% to 1%
- Health and Personal Care was cut from 4.5% to 1%
Why Did Amazon Cut Their Affiliate Program Commissions?
Well, it’s hard to say. I don’t believe it’s coincidental that they decided to enact this change right in the middle of the COVID-19 global pandemic. Amazon’s sales of essential items such as toilet paper, groceries, and hygiene materials are through the roof.
Some people believed that this was potentially a temporary cut due to COVID-19 and that the regular commissions will return once things have settled down. However, that’s not the case.
After contacting the Amazon affiliate team, several people (myself included) have gotten responses saying that the Amazon leadership team confirmed this is a permanent change.
This is certainly a gut punch to affiliate marketers who have been so faithful to the Amazon Affiliate Program and relied on their program to bring in a large portion of their income each year.
Is the Amazon Affiliate Program dying?
With all of this being said, however, I wouldn’t say you should avoid using the Amazon Affiliate Program or that the program is dying. You simply won’t be making as much money as you could have been before the changes were enacted in April of 2020.
The Amazon Affiliate Program is easy to apply for and you can start making money on your blog right away once you’re bringing in some traffic on your website. Their affiliate program has been and continues to be my largest source of affiliate income on my main blog.
Amazon is the KING of E-commerce conversion rates. My main blog usually hovers around a 12% conversion rate for Amazon products which is insanely high compared to other affiliate programs. So, don’t get discouraged when you hear that Amazon’s payout percentages have dropped. Amazon sells basically every item under the sun and you can certainly figure out a way to incorporate Amazon affiliate links into your blog posts and begin making a steady income.
What Are Good Alternatives to the Amazon Affiliate Program?
After reading this, if you decide that you don’t want to use the Amazon Affiliate Program, there are certainly plenty of other alternatives out there.
Two of the most popular large affiliate marketing networks are ShareASale and CJ Affiliate (formerly known as Commission Junction). Each of these networks has thousands of affiliate programs under any category you can think of. These are extremely convenient because you can sign up for any company’s affiliate program (as long as it is on the network) and all of your affiliate sales are shown under a single dashboard. If you didn’t have this convenience, you would have to sign up for each company individually, have a separate login for each, and it would be a huge waste of time.
Although I am still using and will continue to use the Amazon Affiliate Program due to its convenience, I have begun swapping out some of my affiliate links (where it makes sense) for ones through ShareASale or CJ Affiliate.
Conclusion
All in all, there’s no sugar-coating it. Amazon slicing their affiliate commission rates for the second time since 2017 is bad news for all affiliate marketers. When Amazon sales are soaring and they decide to cut affiliate commission rates to make even more money, it makes us smaller people work harder for passive income. However, keep your chin up! There is still a LOT of money to be made through Amazon affiliate links.
Only time will tell if there’s another change in Amazon’s commission rates (positive or negative). All of us bloggers are hoping that Amazon helps us out in the future by continuing to support the Amazon Associates Program and making beneficial moves to enhance our performance.
What do you think about Amazon slicing their affiliate program rates? Have you been successful using their affiliate program? Leave a comment below!
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