In this episode, Perrin & Gael sit down and talk about the upcoming Amazon associates payout update coming in the next few days and how to prepare for it.
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Received the email as well, I have a website in the sports/outdoor niche. I sell about 800/900 products a month and about 400 of them are actually bought from the sports or outdoor category on Amazon. The other 500 items are randomly bought from the other categories
I estimate that i’m gonna be earning 40 percent less now in total… ouch
I just received the official email, and as predicted, the new structure will take place from 1st March.
I think it will be a huge blow to affiliates. Even those in niches that are not directly affected – like cosmetics – were still making a lot of commissions from unrelated purchases made by their visitors – for example, when visitors also bought a TV and the fee was 8.5%. Now it’s only 4%. If you dig deep into your amazon reports, you can see there are a lot of unrelated purchases – at least that’s the case for me – so the impact might be bigger than expected.
Remains to be seen.
Great podcast! I wrote about “Amazoncalypsa” few weeks ago. I see it more negative though. You make it sound like a bad change is actually awesome :)
The most important thing is that this is just first of many negative changes coming. There is simply no way back for Amazon – since they started posting profits they must now show huge profit growth every quarter. Their P/E is 175!
Their international ecommerce business is still in loss. Their US ecommerce business generates only 25% of the profits.
The management will soon start to talk why they should pay commision on already acquired customer. I wouldn’t see impossible that the commision on already acquired customer will drop to the floor and only newly acquired customers will bring real cash.
We have commission structures like that in Germany for a few years now.
Enjoy the high pay outs as long as they last.
For some Tech sites I have I changed the monetization model.
Excellent podcast, thank you!
I also don’t think Amazon is trying to get rid of affiliates – or even deter new affiliates from joining. This potential change just makes sense from a business standpoint.
I’m sure from our side of things (the affiliate side) these potential commission changes WILL deter many from the ‘easy Amazon niche site’ model – which I think would be silly. C’mon, it’s AMAZON – it’s some of the easiest affiliate money on the net.
Thanks for sharing!
Hey guys – thanks for posting this, but…
Since I’ve listened to your podcast, I’ve been doing some research, and I’m concerned that you guys (and others) might be severely jumping the gun on this.
First, I suppose it makes sense that Amazon might be “testing” this method with some high-level affiliates and working with them to explore different payout methods. However, I’ve seen absolutely ZERO evidence that this is going to translate into a site-wide change of the payout method for ALL affiliates, especially not anytime soon.
The Amazon reps I’ve been able to get in contact with said that while they don’t personally have information about it, they’re certain that Amazon wouldn’t make a change like this without a ton of advanced (and detailed) notice.
Plus, why in the world would they do something that would cause vast numbers of current (and future) affiliate partners to jump ship or seek out other affiliate programs? I’m sorry, but that’s not a win for anybody. Not for Amazon and not for affiliates. If anything, I would expect Amazon to put policies in place that would benefit the larger affiliate partners…not scare them off.
Something about this just doesn’t compute.
Actually, the speculation behind this change is that Prime is now so prevalent in the US that Amazon does not want to pay commission for already acquired customers.
Add that to the fact that their payouts can easily be 300% above the competition in many categories right now, it actually makes sense they would reduce the payouts.
The question is how soon and what method they will use to roll it out. It will start as early as in a few days but no idea who will be impacted right away.
Thanks for the response Gael. I guess I’m going with the assumption that it’s not going to be nearly as apocalyptic as it might seem. In the mean time, I’m going to work on possibly diversifying my affiliate model, which does rely heavily on Amazon US at this point in time.
I suppose that’s the take away, in any event.
Keep up the good work.
Nice to see you touching on this topic guys.
After my initial post on my blog regarding these rumours, I’ve spoken to quite a few people and had a few insider tips and it does seem like Amazon maybe testing this new structure on high profile affiliates first. From what I can see Amazon have targeted affiliates based on commission earned (tiered) so initially it might have been $100k per month + affiliates, then $50k+ and then next might be $25k+ rather than what you mentioned as affiliates who hit 8.5% as I know many affiliates who consistently hit this (myself included) who haven’t been contacted.
At least I do hope it’s not everyone…just yet.
Also good tips regarding optimisation, I honestly think most affiliates are far too lazy or just haven’t got the necessary skills to split test or do conversion rate optimisation, once they start earning they just set and forget…but you are right, if you do the math behind traffic to site > percentage of clicks to Amazon > percentage of sales > AOV and all that and then start messing around with the data, looking at what you can achieve if you increase the Amazon CTR by just 10% or begin promoting a higher value product the end results can be very surprising.
In my case, I always monitor the month EPV and ensure that it’s on an increase by doing various CRO, from basic things like customising the table design (not just standard tablepress) or making buttons rather than text links, split-testing call to actions and much more. I think everyone should be aiming for at least $0.15 EPV as an initial benchmark, then depending on the niche you are in, AOV you can aim higher.
Also, affiliate programs outside of Amazon, it’s funny that everyone has become so comfortable with Amazon and just automatically assume they offer the best, they quite often don’t – there are plenty of independent affiliate programs, as well as private affiliate programs that offer similar commission levels (sometimes much higher) with much faster payout options, which means more money appearing in your bank account faster, win win.
Anyway, just wanted to drop in and say nice podcast!
Interesting, let’s see what happens, I would love for Amazon to go about it that way and measure the impact of the changes before making it widespread. But there’s also a chance they will roll it out to everyone sometime soon.
And yep I agree, I think most of the drop off can be offset with proper page optimisation. Simple changes in CTA got me a 20% CTR bump lately :).
I started diversify affiliates.
I used to was using only Amazon and now:
Shareasale, CJ and so on
And Google Adsense :)
Also wirecutter do the same. not just relying on Amazon
Smart move :P.
Gael & Perrin,
Thanks for this podcast!
Good to know that there’ll be many new opportunities with other Affiliates & Revenue programs.
Interesting to know that Amazon.com asked feedback from the guys making 8-8.5% Commissions.
Keep up posting content like this one~
We will! Thanks for the comment!
Thanks Guys was a bit of a shock to see your email with my coffee. I think we all knew this was coming one day or another. All in all I feel like yourselves this will be good for those of in this for the long haul. I did not hear any reference to the capping of fees at a maximum per product, like they do in the UK I think its around $10 commission max per product even if its a $500 product. Did this just get overlooked or is there no news on this aspect?
We haven’t heard of commission capping so far but maybe that will be introduced as well. And yeah I think it was inevitable, Amazon has been very profitable, very easily (almost too easily)
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