Thinking About Starting Your OWN Blog? If YOU'D like to learn how to make money blogging with affiliate marketing like I do, feel free to read my Free Blogging 101 E-Course here.
Amazon Affiliate Commission Rate Change Details
The other day, I talked about rumors of a big change to the affiliate commission rates for Amazon Associates.
Well…. it’s not a rumor anymore – It IS happening.
As of March 1, 1017, All Amazon Associates (Amazon affiliates) will be paid based on a new commission percentage payout scale… and you probably won’t love it.
I’ve been an Amazon Associate since 2007 and from the first day I signed up and started earning, Amazon had their previous “volume-based” affiliate commissions structure in place. This made for a VERY nice affiliate income stream (you can see examples of my Amazon affiliate daily earnings here). This new commission structure is bound to have an negative effect on my monthly earnings.
(update: yes, I did take a hit, but figured out how to fix my commission losses here).
Summary of Topics on This Page:
- What’s the BIGGEST Change?
- Affiliate vs Associate
- OLD Commission Structure
- NEW Commission Rates
- What Does That MEAN?
- My Thoughts on the Amazon Affiliate Changes
- My Odd Way Of Seeing My Affiliate Links
- Crunching Some Numbers
- The Winners
- So, NOW WHAT?
- Our Options
- My Final Thoughts
- What Can You DO About?
- How about YOU?
What’s the BIGGEST Change?
The biggest for Amazon Affiliate earnings is this:
No more “sell more/make more” volume-based commission rates.
If you see about 10 or less items as an Amazon affiliate each month, this change probably won’t affect you.
BUT, if you sell more than that each month, you might want to keep reading.
Affiliate vs Associate
Amazon Affiliate vs Amazon Associate – what’s the difference? For the sake of this article, I refer to those that get affiliate commissions from Amazon as Amazon affiliates. However, the official name Amazon uses for their affiliates is “Associates”. In short, affiliate/associates means the same thing.
OLD Commission Structure
This is the old commission payout (still applies through the end of February 2017):
NEW Commission Rates
The NEW Amazon Affiliate commission rates are a flat-rate commission percentage based on the category of the product sold. This new Amazon Associate commission payout structure goes into effect March 1, 2017 and is sure to make changes to how much Amazon affiliates make.
- Amazon Gift Cards & Wine – 0%
- Video Games & Video Consoles – 1%
- Televisions – 2%
- PC, PC Components, DVD & Blu-Ray – 2.5%
- Toys -3%
- Amazon Kindle & Fire Tablets – 4%
- Physical Books, Health & Personal Care, Sports, Kitchen, Automotive,Baby Products – 4.5%
- Digital Music, Grocery, Physical Music, Handmade, Digital Videos – 5%
- Outdoors, Tools – 5.5%
- Headphones, Beauty, Musical Instruments, Business, Industrial Supplies – 6%
- Amazon Echo, Amazon Fire TV – 7%
- Apparel, Jewelry, Luggage, Shoes, Handbags & Accessories, Watches – 7%
- Furniture, Home, Home Improvement, Lawn & Garden, Pets, Pantry – 8%
- Digital Video Games, Luxury Beauty, Amazon Coins – 10%
- All Other Categories – 4%
As you can see, for affiliates accustomed to earning 8% – 8.5% every month on the old volume-based commission structure, this NEW commission structure could possibly cause a big drop in affiliate earnings based on the category of the products they sell.
Here is a chart of the NEW payout rates:
Effective March 1, 2017
If you can’t see it clearly, you can also see it here on Amazon’s site.
Just awesome, right?
Not really, but: It is what it is.
What Does That MEAN?
Currently, until March 1st, the more items we sell/ship, the higher our commission rate is.
NOW, as of March 1st, you can sell ONE item, or 50 million items, and you get the same commission rate for that item – and it’s probably a lower commission percentage (not for ALL categories, but for most).
My Thoughts on the Amazon Affiliate Changes
To be totally honest, my first thought was, “Holy Crapola!!! That ain’t good!”
I was expecting something close the Amazon UK payout structure for affiliates, but for some reason, seeing our new payout percentage changes made my brain hurt lol!
So then I did what I do when changes come –
I got out the ol’ pen and paper and crunched some numbers to see what these new payout rates would do to MY bottom line.
My Odd Way Of Seeing My Affiliate Links
I’m an odd one – I am perfectly aware of that, and perfectly ok with that too 😉
To me, my affiliate links are like my “employees”.
They’re awesome little employees, too. Once I “train” them (ie, get them out there), they are out there working FOR me 24 hours a day, 7 days a week, 365 days a year.
They don’t even need a lunch break or sleep, awesome, right?
So, each type of affiliate links I have out there are measured by how much they make me per hour.
For my Amazon affiliate links, it really works better for me to be able to get a “big picture” idea of how they’re working since well, it’s AMAZON, there’s no way to KNOW what I’m going to sell.
Of course, I also measure conversion rates and click through rates and all that good stuff – but I do that more on a “campaign” level that for an affiliate program as a whole.
Crunching Some Numbers
So, I popped open a random report inside my Amazon Affiliate earnings dashboard, made sure it was broken down by category, and then started crunching numbers.
For my random report: 162 items shipped.
Under the current “old” volume-based payout rates, that would be a 7% commission (excluding any capped categories, etc).
Those 162 things earned Amazon $6,109.87
My Earnings With the Old Commission Structure:
Based on the “old” volume-based” commission structure, selling/shipping 162 items would mean 7% commission for me…
That earns me $427.70
Which is about $17.82 per hour.
My Earnings With the NEW Commission Structure:
Then, I had to break down each category of items sold and see how much the items in each category would earn me under the new commission percentage rates.
That took a moment
Turns out, for me and the items I sold in that sample report I pulled, those same 162 items would now earn me…
A loss of $64.15
Which brings my little affiliate link “employees” down to earning me…
$15.15 per hour.
A loss of $2.67 per hour.
Now, a potential loss of $64 a day doesn’t sound HORRIBLE…
until you look at that number for a YEAR.
That would be a loss of $23,360 a year.
That makes me say, “OUCH”.
The biggest “Ouch” categories for ME are kitchen & housewares, toys & games, baby, and outdoors.
Now, if all 162 items I sold/shipped in that sample earnings report were ALL Pet Products… well, my little “employees” just got a raise…lol!
Pet products, furniture, home improvement, lawn & garden, Prime Pantry, and the all-illusive “home” category are all now a flat 8% commission rate.
Once my account gets to 1571 items in those categories sold/shipped – I’m losing again.
By the old “volume-based” commission structure, I would be at 8.5% commission.
So, NOW WHAT?
For me – nothing.
Seriously – nothing.
I’m not gonna run around out there and take down all my Amazon affiliate links – those little “employees” of mine are still working FOR me – just probably not gonna make as much.
But I am certainly NOT going to “cut my nose off to spite my face” – that would be silly.
I might start looking more closely at the 10% categories like the Luxury Beauty category on Amazon or the Amazon Coins (which I don’t see me going with the coin thing…I didn’t even know what they were until today lol! If you’re curious, here are the details about Amazon Coins – maybe they will fit with your promotions.)
I will start brainstorming ways to supplement my little “employee” Amazon affiliate links with something else… maybe Adsense…or another affiliate program.
Another option is this:
If I find I sell a lot of a certain brand of an item, I could reach out directly to the merchant and see if they might offer a better rate.
My Final Thoughts
Until I see at least a full month of earnings under the new Amazon affiliate payout structure, I’m not doing anything differently.
It will be business as usual – and yes, I will still be actively creating my little Amazon affiliate link “employees”.
It’s still the easiest money to make online – everyone LOVES Amazon.
But in the back of my mind, I know that my affiliate link “employees” are probably going to make me about $2 less per hour starting March 1st
What Can You DO About?
I KNOW there are plenty of affiliates that are going to feel a major “sting” over these changes – and my heart is with each and every one of them.
But I also know – you don’t get to become a “Power Affiliate” without the ability to “bob and weave” when changes come your way.
I have no doubt that they will come out on top.
How about YOU?
How will these new Amazon payout rates affect YOUR business?
Do you have plans to make changes?