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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.
Follow Up Post: How To Regain Your Lost Amazon Affiliate Earnings AFTER the Commission Change
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).
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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.
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Amazon Associate vs Amazon Affiliate?
A very common question is: 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, Amazon affiliate/ Amazon Associates means the same thing.
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OLD Commission Structure
This is the old commission payout (still applies through the end of February 2017):
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NEW Amazon Commission Rates
The NEW Amazon Affiliate commission rates are a flat-rate commission percentage that are paid out 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.
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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.
Weird, right?
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…
$363.55
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.
Ugh.
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.
The Winners
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.
BUT…
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?
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.
Our Options
I’ve been thinking of some options due to this new payout structure, and these some ideas I’ve had.
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.
Read: How To Pick GOOD Amazon Affiliate Products To Promote
Learn: How To Make MORE Sales From Your Affiliate Posts
How about YOU?
How will these new Amazon payout rates affect YOUR business?
Do you have plans to make changes?
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I’m really just not worried or stressed. It’s a huge bummer for people taking a large pay cut – heck, any pay cut is a bummer!
But it’s “the nature of the beast.” Our biz ebbs and flows and we roll with it or we perish and the latter is not an option for me. Especially after seeing good sites get hit hard by Google’s animals and owners give up – only for the sites with staying power to recover after sticking it out. That was a huge lesson for me.
So this? Just gonna roll with it. Maybe take a closer look at how I can strengthen my monetization plan. Reach out to companies and negotiate? Sure! Create products? Absolutely!
What I’m loving is that there isn’t a whole lot of panic in my network. For the most part, people are staying calm and simply shifting their mindset. They seem understanding and willing to just go with it all.
That speaks volumes.
Hiya Julie!!!!
Yep, I’m just gonna roll with it as well. Does it sting some? Of course! I don’t like “lost money” – but as with all things working online, when changes come, roll with it, adjust and move on.
Thanks for stopping by!
Jennifer
~PotPieGirl
Hi Jennifer,
Thanks for warning us – you were right! What I wonder is how you can be sure that an item is in the category that pays well. Is there any way to know for sure? Like the digital video games for example – which actually qualify? Is there an easy way to know for sure?
I’m with you – not promoting Amazon coins. Does anyone use them?
Blog on
Janet
Hiya Janet =)
As for being in the ‘right’ category – not 100% on how to know for SURE yet.
It all comes down to how the seller categorizes their listing.
I’ve promoted products that should all be in the kitchen category (as an example) but then see some sales come through for the same type of product yet it’s in the ‘office’ category.
It’ll be tricky at first, but hopefully after the next month, we’ll all get a better idea of how to make these changes work best for each of us.
Thanks for reading and for your comment!
Jennifer
~PotPieGirl
Gosh so Angry right now but know there’s nothing anyone can do about it. Worked hard for 12 months to double my income to be taken back to square one as most products fall into the ‘other’ category. Nothing I promote is in a higher category so I am loosing on every sale!. Talk about a pay cut.
How can affiliates fight back?. A world world Amazon affiliate strike where we all take our sites offline for a couple days so Amazon can feel the financial sting. Well there’s 2 options for me. Double my workload again to make it back to the point it is in Feb 2017 by late 2018. Or move onto something else. Finding amazon substitutes is not going to happen when one promotes 100’s of products in various niches.
Oh, Josh… I hear ya! There’s lots of anger, frustration, and feelings of defeat floating around the affiliate world today.
And I’m sure plenty thinking of the strike idea too.
Hang in there… take some deep breaths… walk away from the computer for a bit.
You’ll be ok – probably better than before all this… just hang in there.
Jennifer
Yea, fortunately I am moving house and can go pack some boxes to distract me haha. Knew it was coming, was just hoping it was just a bad dream :(. So many product fall into ‘other’ categories that belong in Furniture, sports etc. I assume Sellers pick the categories the products go in? So I hope Amazon at least cleans this up.
That’s a GREAT idea – work off that frustration with manual labor! I know I have plenty of cleaning to do =)
And yep, the sellers pick the category and unless something is obviously wrong, I don’t think Amazon messes with them.
That is definitely one thing I wish was more consistent over there regardless of what the pay rate is.
H? Jennifer,
? am a bit upset about these changes as I have a lot of articles addressing kitchen, baby, outdoors and sports related stuff. I guess some new big shot at Amazon decided that the company will make more money. I can understand that; after all Amazon is a business venture, not a charity organization.
My future articles will now focus mostly on the Home and Luxury Beauty categories. Fortunately, I already have quite a few articles in those two categories. But unless I increase their number, I expect about 30 to 40 percent drop in my Amazon affiliate revenue!
Thanks for all the useful info you keep providing us and good luck to you as well with this new fee structure.
Maurice
Hiya Maurice =)
There’s a ton of “upset” floating around the Amazon Associates world lately… it’s a tough one, that’s for sure. I wish they had considered some way to “grandfather in” some long-term affiliates, but as I said – It Is What It Is.
Amazon is SO much more than just selling blenders and books so I don’t think this was a “let’s screw over the affiliates” type of move. It all comes down to the bottom line of Big Picture – the line the stockholders care about.
Bummer 🙁
I am afraid this is just the beginning and we will see more drastic decrease in commission in the next few years. My main revenues are usually from Toys and Home. I’ll need to check and do some calculation to see what I’ll loose. Might have eventually to change some links and go through other affiliate programs that may pay more. Again, will have to check that out. I love Amazon because I find all the product from them instead of having to deal with multiple affiliate sites. No headaches about sites closing their affiliate programs, no stress about getting paid on time etc..
Totally agree, Nathalie! Amazon is so easy. I’ve been with them since 2007 and for the most part, there haven’t been any major changes to their payouts. And in all reality, those payouts were darn good when take the whole ecommerce affiliate picture into account.
I expected this changes for some time. I also think it is the first negative change, not the last.
They will monitor the situation for several months, make statistical analysis where I would expect it will just show more green $$$ in their pockets and another squeeze will come.
One thing we know for sure: Change is inevitable, right?
Amazon is an industry pioneer and industry leader – I expect them to make whatever changes any business would make to keep things all good for their business as a whole.
A few of my thoughts:
The main products that I promote are sometimes listed in one category and sometimes in another – I guess the seller determines the category? Not sure how that works. So those products will either earn me 8% or 5.5%, depending on the whim of whoever selects the category. Oh, well, what can you do? (Pray that the sellers pick the 8% category, haha!)
I have recently signed up for some other affiliate programs and mixed those links in with my Amazon links. Readers clearly prefer Amazon, and I can understand why. I know that if I have the choice when I buy something, I almost always go with Amazon. And when I’m shopping for almost anything, I always check to see if I can get it at Amazon for less. Don’t most Americans? So I’m not giving up on Amazon.
Many of the items that people buy through my links aren’t the products I’m promoting anyway. I’m sure everybody else has this happen, too. It’s hard to predict exactly how this is going to affect us. So for now I’ll just carry on and make adjustments as I need to. And keep looking for other options so my eggs aren’t all in one basket.
Hiya Marge =)
Yep, sellers pick the category (from the very best of my understanding. If I am wrong, please someone correct me).
Your attitude and ideas for moving forward are right on point =)
It’s cute you call them employees and I call them my minions lol That’s hilarious! You’re so cute! I’m not gonna fret! With Squidoo I lost it all overnight so this just doesn’t seem “as bad” I suppose. Funny as I write this a song just came on……
“You could be the greatest, you could be the best, you could be the King Kong banging on your chest…”
Minions! I love it!
And ya know what, Lesley? Perhaps those that lived through the whole Squidoo debacle are better with these changes BECAUSE we survived all that.
Even before the rumors and now news, I was thinking about multiple revenue streams. Much of our income comes from downloadables and books my husband sells, so the idea of creating products myself is appealing. Also I sure had fun yesterday with a page I made from Zazzle products. I know the public is less likely to buy from non-Amazon spots but Zazzle has a LOT of attractive and creative stuff you can’t get anywhere else. And so the world turns…
Zazzle can be fun – good idea for diversification, Rosana!
I was thinking this morning how many other online retailers have a big opportunity right now to snag some major affiliates…. curious to watch this play out.
I am a newbie affiliate blogger but also have an IT background. Amazon has not been known to be the most profitable company anyway. I just found this quote from April 2016-“Amazon, a company known for spending like a drunken sailor, appears to have sobered up. At least for now. Amazon typically posts razor-thin (or nonexistent) earnings despite skyrocketing revenue.” I am not terribly surprised they are changing the structure around.
Are they biting the hand that feeds them? Possibly. We will have to wait and see. Maybe Amazon gave the higher commission %’s to the products that have the highest markup…? i.e. their Amazon coins. I do believe tho they have reduced the incentive their own “affiliate employees” previously had to push their products-and maybe, just maybe this new commission structure will not last long.
10% categories is joke. How much people buy coins, and how much remaining items? 🙂
Hiya Amy =)
Good points! I also think the new structure “highlights” the categories they want to draw our attention to.
I agree with keeping the status quo until we know what the impact. Thank the Lord though that we now blog on our own platforms, so we will be able to take whatever steps necessary to change things if needed.
Thanks Jen for your level headedness!
Oh gosh YES, Zee ! Very true!!!
After 4 months in a row with 8%, new structure isn’t attractive at all. For those, who worked to achieve better % rates, it’s the end. The end for motivation, at least. It turns to look for other opportunities.
Amazon is a business and we are there “employees” and they just decided to cut down on the payroll. Like any other job you can take it and go one or find an other job.
Maybe companies are now starting more of their own affiliate programs? Amazon is not the only source of income for an affiliate marketer. Shows again not to put all your eggs in one basket.
I am not gone be worried about it. Its just how it is.
Eddie
Spoken like a true businessman, Eddie!
All we can do is “bob and weave” and adjust our sails accordingly.
Just started earning on amazon so probably won’t feel the bite much- lucky or unlucky for me
It just reminds me not to quit my day job just yet ?
Thanks for breaking it down for us!
I’m thinking of affiliating with etsy as I think their affiliate rate is 4%- anyone work with them?
Hiya Mali =)
Well in a way, being new right now is a blessing – you won’t feel that overnight “loss” that so many others are.
There are a LOT of Etsy affiliates ’round here. I haven’t worked with them, but I’m sure there are others with experience to share.
I sell mostly supplements and will be looking at other supplement affiliate programs. Some companies pay 2, 3, and even 4 times as much as Amazon will be paying. It just doesn’t make sense to not give those a try.
If there’s one product you sell a lot of and it’s something that can be private labeled you could make a lot more selling it on Amazon yourself (and you can still promote it as an affiliate too, gray area but people do it). For example, supplements are very easy to private label. I started out as an affiliate and now I sell my own private label products and make more than I ever could have as an affiliate.
Thank for sharing this post. I am confused to decide whether go with Amazon niche site or not after this update ?
I am amazon affiliate for 8 years now and I will definitely try eBay. It has 30 days cookies and can be the next thing. What do you think about it?
I blog about Tech since it’s what i like and what i know. Computers were previously fixed at 4% and now it’s 2.5%. A 40% hit – ouch!
Been thinking of diversifying the income stream for a while and i guess this is a good sign that we all should.
I really like the way you broke this down to figure out the actual amount of change for a month of sales you actually made as an example here (as opposed to all the speculation out there today) – it’s a lot of math and some brain work, but it’s interesting to see real numbers in black and white. Thank you so much for taking the time to do that!
I think every Amazon Associate owe it to themselves to at least try other income streams. I was spurred on by a post on Jon Dykstra’s FatStacks blog in November where he presented his results re: experimenting with Amazon vs another merchant.
This other merchant outperformed Amazon nicely, so experimenting is a must.
People say Amazon does convert very well compared to others, but have they actually tried? I find that in internet marketing mostly people just repeat what other people are saying without actually trying themselves.
I AM trying (Amazon vs Walmart) and so far liking the results. Made me realize that if I promoted them more, I would actually make more. Go figure, LOL!
Also Adsense is working quite well for me on sites where I didn’t expect it.
And here’s a little rant that I need to get of my chest: I have seen plenty of posts and comments on various sites and even on the Amazon discussion board that Amazon “doesn’t need us anymore”. And in the same sentence say they will stick with Amazon and accept the pay cut.
Really? So Amazon is a charitable organization now, just keeping their affiliate program open for little people like us? How nice of them!
Right now they still need us, but this of course will change at some point. As does everything in this ever changing landscape. Just like you said, we need to be able to bob and weave.
So I keep the sites/pages that are still performing for amazon, target the higher paying categories and continue experimenting with other affiliate/ad networks.