Many bloggers rely on the Amazon affiliate program as a passive income stream to monetize their websites. The way the program works is that Amazon affiliate bloggers add links to their posts for products relevant to their readers. Those links point to the products on Amazon’s site and contain a tracking code that enables Amazon to see which website or blog generated the “hit” and pay them a commission that is a percentage of the item’s price.
Currently, the commission an affiliate receives is based on a tiered product structure, but is heavily influenced by the number of items sold through their website or blog. This tiered commission structure benefits people who sell more through their sites, since the percentage begins at 4 percent for sales of 1 to 6 items per month, and goes up to 8.5 percent for sites that sell more than 3,131 items per month.
But beginning March 1, that is going to change.
Instead of a volume-based commission structure, an affiliate’s commission will be based solely on the type of item sold, not how many items are sold. Amazon gift cards and wine yield no commission at all, while sales of digital video games and luxury beauty items will yield a commission of 10 percent. Toys will earn a commission of 3 percent, baby products will earn 4.5 percent, and pet products will earn an 8 percent commission.
“This is likely to have a massive [e]ffect on the blog/article review system,” wrote Hacker News forum user Graeme. “Most of the review sites that exist today only do so because of Amazon’s fairly generous programs…I expect people will deprecate affiliate marketing as an activity to some extent: this is a major change in the niche.”
“As an Amazon affiliate who has done quite well with it, this is definitely a gutting,” said Hacker News forum user sharkweek. “But…if I’m being honest with myself, it also seems kind of reasonable. I think their original plan was pretty generous. I was kind of expecting this to happen at some point.
On a subreddit for people building affiliate websites, user Humblesalesman said, “Had a chat today with probably the largest Amazon affiliate I know. He was having a big cry that his monthly take home on his biggest site will get cut in half.”
Amidst all the panicking to be found on the internet, blogger Jennifer Ledbetter, a self-styled expert on internet marketing, is advising Amazon affiliates to keep their cool. “Until I see at least a full month of earnings under the new Amazon affiliate payout structure, I’m not doing anything differently…It’s still the easiest money to make online—everyone LOVES Amazon.”
When all is said and done, it shouldn’t come as a surprise to anyone that Amazon has updated its affiliate structure to ensure that large sites don’t get huge payouts as they have in the past. While this could benefit blogs and websites with a lower sales volume by providing a higher per-item commission, the party that ultimately benefits is Amazon. After all, they don’t have to pay generous volume-based commissions, and bloggers and webmasters all over the world are sending people to Amazon to buy products they recommend.