On April 14, 2020, Amazon sent a notice to its affiliates regarding the changes that will take effect on April 21.
The changes are significant reductions in affiliate payments.
For example, the furniture and home improvement categories were reduced from an 8% payout to just 3%.
There was no indication in the email that the changes were related to affiliate payments.
Unless one clicks from the email to the page containing the changes, one will never know.
Here is the text of the email notification from Amazon:
We hope you are doing well during this time. We are writing to inform you of upcoming changes to the Amazon Associates Program Operating Agreement, which governs your participation in the Amazon Associates Program.
All changes are effective as of April 21, 2020.
Visit the What has changed page to see a summary of these changes. You can also find the Operating Agreement, Program Policies, and Fee Statement if you wish to downgrade to current versions prior to the change. “
The wording is vague as to what has been changed.
So no doubt it’s shocking to click to see massive changes in affiliate payments structure.
Why is Amazon cutting commission fees?
In my opinion it appears to be the result of a logical business decision. This is likely about cutting unnecessary costs.
The categories Amazon is lowering fees on are linked to Covid-19 buying trends that are generating unprecedented purchase demand. Demand is very high and Amazon is said to be employing 100,000 warehouse workers to handle the high demand.
With so much purchase traffic already coming to Amazon, it makes no sense to pay for traffic when Amazon already has more than it can handle.
However, the mood is dark in the affiliate world, with many saying Amazon is driven by greed by not sharing the reward with its affiliates.
High demand groups are affected
The changes appear to be related to products that are currently in high demand by consumers due to the COVID-19 quarantine.
Products related to home and work from home tend to be the categories that are cut short.
Here is a screenshot of Amazon Affiliate Payments, highlighting the fees:
Amazon and other companies are lowering their advertising costs, especially for products that are in high demand.
Given this perspective, it makes sense for Amazon to lower its payment fees for products already flying off warehouse shelves.
Not all classes affected
The discounts are not comprehensive.
Many categories remain unaffected.
For example, the Luxury Beauty and Amazon Coins categories continue to have a 10% payout rate.
Digital and physical music categories continue to pay 5%.
But these two can be difficult categories to earn compensation because nowadays most people tend to listen to music via streaming services.
The rates of return for the following categories remain unchanged.
Luxurious Beauty, Amazon Coins
Digital Music, Actual Music, Handmade, Digital Video
Physical books, kitchen and cars
Amazon Fire Tablets, Amazon Kindle devices, Amazon Fashion women’s, men’s and kids’ stickers, clothing, Amazon Cloud Cam devices, Fire TV Edition smart devices, Amazon Fire TV devices, Amazon Echo devices, Ring devices, watches, jewelry, luggage, shoes, Handbags and accessories
PC, computer components, DVD and Blu-Ray discs
Televisions, digital video games
Physical video games and video game consoles
Negative response from Amazon affiliates expected
A gloomy mood prevailed over the Subordinate World.
- Should Amazon have shared its bounty with its affiliates?
- Is Amazon greedy and betrayal of its partners?
Discussion at Th3Core.com’s Online Marketing Forum about these changes titled: Amazon for Affiliates: We No Longer Need You.
The discussion title may reflect the general mood of Amazon affiliates once they discover how their profits are being cut to the bone.
Forum post says:
“As of April 21, the commission structure is cut off”
Harsh words for Amazon on Twitter:
Amazon just eliminated its affiliate advertising game.
Commissions reduced from 10% to 3%, effective 7 days from today.
This is what it means to dance with the beast. pic.twitter.com/uVI14dCyrd
– Molson Hart (@Molson_Hart) April 14, 2020
crazy for anyone in # amazon Industry now, wow!
Digital real estate values reduced by 60% pic.twitter.com/jTEUfy2xvr
– Robert Edel (@robertidellxyz) April 14, 2020
This may be a side effect of the coronavirus quarantine.
Changes in demand are shaking up the world of online marketing, particularly the advertising sector.
Advertising budgets are being reduced due to lack of demand in some regions.
Amazon Associates is cutting spending for areas where demand is at unprecedented levels.
It could mean that there is no good reason to pay for the traffic that actually comes to Amazon.