When you are looking to buy a particular product on Amazon, what research do you conduct before clicking “Add to Cart?” Perhaps you ask a friend, browse online, or head to a trusted website/influencer for recommendations. When reading articles or engaging with influencer content containing links to Amazon products, the outlet or influencer is most likely a member of the Amazon Affiliate program, meaning they are compensated for advertising the product when a conversion is made through their unique link! Unfortunately, affiliate program members are taking a hit as Amazon recently lowered the referral rates. Read on to learn more about the Amazon Affiliate program and how reduced referral percentages will affect its members.
What is the Amazon Affiliate Program?
The Amazon Affiliate program, also known as Amazon Associates, allows website owners and bloggers to share Amazon products, create links, and receive a referral commission when a product is purchased. Commission percentages depend on individual product categories. For example, products that fall under the Sports category receive a commission of 3% commission, while products under the Grocery category receive a commission of only 1%. Members are even eligible to receive commission on products that are not directly linking to, but those that visitors discovered while browsing through the link created by the writer. Under the program guidelines, bloggers and website owners must disclose that they may be eligible to earn commission off of their recommendations (see example below). The free-to-join program has been extremely popular among top-tier digital publishers, such as Buzzfeed, The New York Times, Vox, and more.
Why Reduce Referral Rates?
Effective April 21, 2020, Amazon reduced referral fee rates for all affiliate program members. Almost every Amazon product category has been affected by these cutbacks. For example, products in the Home and Furniture category previously received a referral fee of 8%. Now, products within that category will only receive a 3% referral fee. Some product category fees were reduced by as much as 70%. The reduction in referral fees leave bloggers, freelancers, and digital editors wondering why.
The Coronavirus outbreak caused the ecommerce giant to shift its focus to essential efforts. Surges of online orders and high demand of essential items required Amazon to place priority on shipping certain products amid the global crisis. The pandemic also caused Amazon to put their Prime Pantry service on hold temporarily. A spokesperson from Amazon states that it after consistent evaluation of its offerings, the rates are competitive with the broader industry.
Alternative Affiliate Programs
The commission cuts are disappointing, as thousands have come to rely on the program for consistent income. While Amazon’s Affiliate Program is the most popular program online, there are other affiliate programs that users are able to consider. Narrativ, a marketplace for unbiased product recommendations, have a number of notable partners, such as Condè Nast, Wirecutter, and more. Since Amazon’s recent commission cuts, Narrativ provides their partners with a better opportunity to drive sales and increase traffic to their ecommerce platforms. Another niche affiliate program authors and bloggers who share the love of books can consider joining is available on Bookshop.org! This affiliate program offers a generous 10% affiliate fee for each book sold.
As the largest ecommerce retailer in the world, it will be no simple task to for alternative affiliate programs to compete with Amazon. However, the reduction in referral rates provide other affiliate programs with an opportunity to grow by assisting bloggers and website owners to make a living.
Are you interested in learning more about affiliate marketing? Get in touch today!