Every time I get an email from Amazon with the words, “…Operating Agreement Update…” – my heart skips a beat and I’m suddenly filled with anxiety and fear for what I might find inside. Okay… that’s not true for me. But I think it is reality for many affiliates who have been in the game for a number of years.
It happened again today. I, and many others, got one of those emails from Amazon.
This time it was one of the dreaded big ones… They’re making changes to their commission payout structure for some categories. Meaning, they’re changing the rates and, as you can probably guess, it is NOT in the favor of Amazon affiliates. We’re really taking it on the chin this time. Effective April 21, 2020 (one week from the day that they first informed us) – the new rates will be in effect.
Amazon Commission Rate Changes – April 21, 2020
Here are the categories being affected – followed by the negative rate changes…
- Furniture, Home, Home Improvement, Lawn & Garden, Pets Products, Pantry
- 8% down to 3%
- Headphones, Beauty, Musical Instruments, Business & Industrial Supplies
- 6% down to 3%
- Outdoors, Tools
- 5.5% down to 3%
- 5% down to 1%
- 4.5% down to 3%
- Baby Products
- 4.5% down to 3%
- Health & Personal Care
- 4.5% down to 1%
- Amazon Fresh
- 3% down to 1%
Amazon Commission Rates before April 21, 2020
New Amazon Commission Rates Effective April 21, 2020
How do the new Amazon commission rates affect most websites or blogs?
From where I sit – it certainly appears that almost anything that anybody would typically promote on a website or blog is going to be affected. Most of the major product categories, that coincide with typical topics covered on websites or blogs, took a major hit. In fact – I see only 3 categories that I would consider ‘common’ that did not take a hit; Physical Books, Kitchen, and Automotive.
Here is one quick example. Say you had a site in the ‘Pet’ niche – maybe a site about a certain breed of dogs. What if ALL of the Amazon products you promote on your site are in the ‘Pet Products’ category. Well, your commission rate is going from 8% down to 3% for products in that category. If your site was previously earning $1,000 per month from Amazon Associates – those same exact sales will now be worth only $375.
That is one extreme example in one of the categories that took the biggest hit. But it will not be uncommon – as there are a LOT of ‘pet’ blogs out on the interwebs.
Is there a good alternative to the Amazon Associates program?
For MOST affiliates – there really is no good alternative. Certainly – some of the ‘professional’ niche site builders will be looking for viable alternatives and I’m sure many will make changes and try to go in different directions. But when I say ‘MOST’ affiliates – I am talking about average bloggers and webmasters. Many of whom are just trying to get started in the world of making money online as an affiliate.
For MOST of these types of affiliates – Amazon is still going to be the easiest platform to get started on.
There are several reasons for this, including…
- you can promote almost any product available under the sun via Amazon – they have everything
- you get paid for ALL purchases made within 24 hours after your affiliate cookie is set – not just the product that got your visitor to click over to Amazon (not all other affiliate programs work this way)
- nobody cross-sells like Amazon – meaning your visitors are more likely to buy more than just one item
- Amazon has trust – simple as that – people don’t hesitate to buy on Amazon and hundreds of millions of them have their credit card info already stored on the platform
Can I promote the same products on other sites instead and earn more commissions?
Sure – you could find alternative affiliate programs and try to earn more in commissions. You would have to switch out existing affiliate links and use the new programs for all new affiliate links. And if you do this – you likely won’t have an easy way to insert affiliate links with an awesome WordPress plugin, like AmaLinks Pro.
Warning! If you do plan to use different affiliate programs and still use Amazon as well – make sure you stay in compliance. One lesser-known Amazon rule is that you cannot promote products for sale on other sites if using Amazon data (like images) to promote the product.
Is it still worth it to be an Amazon affiliate – given the lower commission rates?
At first glance – I’ll bet most people are like me and would like to just give Amazon the finger and say SCREW YOU! I’m tired of working so hard to create great content that promotes Amazon products – only to get slapped in the face with these commission rate changes.
Maybe it’s not worth it for some – especially those who put ALL of their eggs in Amazon’s basket. They really should have known better and realized that Amazon doesn’t care about that basket.
But, for those of us who have diversified and Amazon affiliate income only accounts for a percentage of our online income – then it is still worth it.
Participation with the Amazon Associates program does still have many advantages – regardless of the new (lower) commission rates for some categories.
For example… I’ll bet it is still easier to earn MORE money as an Amazon affiliate, where you get paid for all items purchased within 24 hours – than to make money from a lesser-known affiliate program, that doesn’t have as much trust, and that pays commissions ONLY for the item that the visitor clicked on.
Why should I continue to promote Amazon products for lower commissions?
As is usually the case for situations like this – I like to try to shift my perspective. Perhaps I can help you with yours.
Think of the Amazon Associates program as just a way to earn a decent amount of extra cash – rather than a way to try to earn a living. Promoting products on Amazon is still extremely easy (especially if you use a quality WordPress plugin like AmaLinks Pro).
You can still use the Amazon affiliate program to earn a little bit of ‘walking around money.’ But maybe you can no longer use it to try to earn ‘quit your job’ kind of money.
What types of things could I use Amazon affiliate earnings for?
- pay your monthly car payment
- save to pay cash for a car
- pay off student loans
- save for your children’s college funds
- pay off credit card debt
- pay cash for things so you don’t get into credit card debt
- pay your rent
- pay extra on your mortgage
- pay for home improvements
- put extra towards your retirement savings each month
- save for a really nice vacation each year
- pay for a gym membership
- spoil yourself with whatever you desire
- use it for your ‘go out to eat’ fund
- buy clothes or shoes that you don’t really ‘need’
- buy nice school clothes for your kids
- spend extra money on your favorite hobbies
- spend on concerts or sporting events
- pay it forward – buy an online training course for somebody else
- give to your favorite local charities
- give to a person or family in need
- give extravagantly large tips to hard-working service professionals (waitresses, etc.)
- random acts of kindness – pay for the car behind you in the drive thru
- random acts of kindness – pay for somebody’s groceries at the store
- random acts of kindness – pay for somebody’s gas at a gas station
And the list could go on and on and on… But as you can see – even if commissions are a little bit lower than they were before – there are still a LOT of great things that you could do with your Amazon affiliate earnings.
Is it the end of the world – should I just drop Amazon altogether?
I’m sure it feels like you probably should just give up on Amazon. But I would encourage you to stick with it. And I’m not just saying this because I sell a WordPress plugin for Amazon affiliates. I truly believe that Amazon is still a viable way to make money online – especially for beginners and just average & ordinary bloggers.
You should absolutely always have a diversified income stream for your website or blog. Don’t make Amazon the ONLY way that you earn from your site. But definitely keep Amazon around as part of your overall earning strategy.
As the world rapidly changes all around us – more and more people are turning to online shopping and Amazon is easily the biggest online retailer in the world. They aren’t going away anytime soon.
You might be earning a lesser percentage on your commission rates – but it’s highly possible that you could start making more sales in the weeks and months and years to come.
Don’t worry – all of your hard work is not lost.
You will continue to earn from work you’ve done in the past. Maybe just not quite as much. But like I stated above – it just might be time to shift your perspective a little bit and not count on Amazon affiliate income as one of your main sources of internet income.
What are other online influencers saying about the Amazon commission change?
- Jon from Authority Website Income must have literally stayed up ALL night to write this post – and he also created a sweet spreadsheet tool (free) to help you analyze how these changes will affect you and your site(s)
- Jim & Ricky – the Income School guys – are pretty pissed. Here is their take on their latest video on their YouTube channel