First off, before I even begin, I need to say: This potential new commission structure for Amazon Associates (affiliates) has NOT been confirmed nor announced officially by Amazon.
Update 2/23/2017: This change is now OFFICIAL
Today, I logged in to check my Amazon affiliate earnings (as I do everyday) and noticed a new layout for my detailed earnings reports.
Earnings and ordered items were broken down by category now as opposed to just a list of products ordered that day and earnings.
That made me say, “Hmmmmmm…. I wonder what Amazon is up to…”
Then, inside a private Facebook Group I participate in, a link was shared to a page where someone claimed to have some inside information about what Amazon is about to do to their Affiliates payout structure – and you may not like it.
Instead of a tiered commission structure offering a higher commission percentage based on your volume of sales, it looks like Amazon is working towards a “Flat Fee” type of commission structure.
So, what does that MEAN for those of us that are Amazon.com affiliates?
In This Post:
Amazon Affiliate Commission Change Details
This post in the Warrior Forum was started by a fellow Amazon affiliate who said:
“I had a call with an affiliate rep from Amazon, and since I wasn’t asked to keep it a secret, I thought I’d relay what I was told (bold emphasis mine).
Starting March 1, Amazon is moving away from a volume based fee structure and moving toward a category based fee structure.
In other words, you’ll get the same rate whether you sell one product or one million products, but you’ll likely get very different rates depending on what types of products you sell.”
As I said in the opening of this post, I do not have PROOF that this is a confirmed change with the Amazon.com Associates program, but it looks like it could very well be on the horizon… sooner, rather than later.
Today, when I logged in to check my Amazon affiliate earnings from yesterday’s sales, I saw my new “detailed reports” looking like this (note: this is the “real time” reports view – not the “classic” reporting option)
Currently, and how it has been ever since I became an Amazon affiliate in 2007, commissions (what Amazon calls “Advertising Fees”) were based on the volume of product sales you made each month.
These commission percentages are “tiered” – meaning the more you sell, the more you earn.
It doesn’t matter WHAT you see (other than a few specific categories that are capped at a set percentage), once your products shipped hits a new volume tier, you earn a higher percentage.
That payout looks like this (and to note: the Amazon.com compensation information page has NOT changed and still has this chart)
New Payout Structure for Amazon Affiliates
The talk is that Amazon.com will be starting a new commission structure either the same as, or very similar to the current payout structure that Amazon UK Affiliates have.
That looks like this:
In short, this new rumored payout structure for US-based Amazon.com affiliates, will be based on the CATEGORY of the the products sold – NOT based on overall sales volume anymore.
What Does This Change Mean To YOUR Amazon Earnings?
As it stands right now, as an Amazon.com affiliate, if I sell 500 blenders for $50 a piece in a month, I would be at the 7.5% commission rate and earn $1875 in commissions (Advertising Fees) for that month.
Based on the new flat percentage commission structure based on the category of products sold, in that example above I would only earn 5% of those sales = $1250.
That would mean I would earn $625 LESS that month based on the potential new payout structure.
Now, on the other had, if I sold 500 pieces of jewelry for $50 a piece in a month, instead of the current 7.5% earning me $1875, I would instead be paid a flat 10% commission for products sold in the jewelry category earning me $2500.
That would mean I would earn $625 more than with the current Amazon commission payout structure..
Not bad at all.
So, what does all this mean for YOU?
It all depends on what category your main product sales come from.
WHY Would Amazon Do This?
A natural reaction I am seeing online is pretty much the feeling of “Amazon hates affiliates – Amazon is phasing out affiliates…. etc etc”
I do NOT think that at ALL.
To me, this makes perfect sense.
And I have to say…
The IRONY of all this in relation to my previous post about building an online business on “free” does NOT escape me.
But, as I said, to me, this potential change in payout makes sense to me.
It all comes down to profit margin – and encouraging affiliates to direct people to certain product categories.
In other words, paying affiliates in a closer proximity to what Amazon earns per product sale.
But we can discuss WHY they’re doing this all we want to… we can be as mad and scream “that’s not FAIR!!!” all we want to.
What we affiliates think really doesn’t matter.
It is THEIR company and they can do whatever they want to (with the exception of stock holder opinions).
And let’s remember this: the Amazon Associates affiliate program is FREE to participate in.
In other words, they allow us to earn FREE MONEY from our clicks that convert to sales.
The only thing that really DOES matter is this:
What will YOU do in relation to the affect this potential change will have on YOUR business?
For their business – they do what they need to do.
For our business – we do what WE need to do.
If you need some help keeping your business mind straight through changes like this…
So, what do YOU think?
Does this potential change make sense to you?
Will YOU continue to work the Amazon affiliate program if this all DOES happen?