Amazon Cut Affiliate Commissions To Reduce Its Losses

Amazon Cut Affiliate Commissions To Reduce Its Losses – Amazon’s move to cut commissions for its affiliate marketing program is the latest example of how a few large retailers appear to be tightening up an area of digital marketing that is known for significant fraud.

For instance, commission rates under the categories home improvement, furniture, lawn and garden, and pet products will see a commission rate of 8 percent per sale drop down to just 3 percent. For headphones, beauty products, and musical instruments, commission rates will go from 6 percent down to 3 percent.

Many other categories including grocery, sports, baby products, and outdoors and tools are all dropping down to 3 or 1 percent, CNBC reports, from 4 percent or higher.

The changes will be a harsh blow to digital media organizations, many of which spent the last few years building out commerce divisions dedicated to recommending products that are largely purchased, at least in the US, on Amazon.

RELATED: Affiliate Marketing Through Content Writing

Other retailers, like Best Buy and Walmart, also run affiliate marketing programs, but Amazon remains the leader in US e-commerce with nearly half of all online sales.

Last month, Amazon and other retailers also began suspending dedicated commerce marketing deals, which are separate from the standard affiliate program, with big digital media firms amid the COVID-19 pandemic.

While an Amazon spokesperson told CNBC, the changes are being made as part of Amazon’s standard business evaluations, the timing of the shift during the coronavirus pandemic— which has significantly impacted retail sales in numerous ways— could help the e-commerce giant make up for losses across some categories.

Some of the biggest cuts to commissions are for categories like groceries that are expected to be a significant growth opportunity for Amazon as consumers change their shopping habits during the health crisis, a shift that is expected to provide a boost to online grocery shopping overall.

Grocery sales were up almost 26% in March, in all channels, the largest increase in at least 25 years, per a Digital Commerce 360 report on the Commerce Department’s advance monthly figures. This comes as sales have tanked across many other categories seen as non-essential.

The news follows reports that Walmart cut its influencer affiliate programs with social commerce site MagicLinks and e-commerce giant Rakuten. Previously, Amazon’s affiliate marketing program removed third-party vendors Skimlinks, Sovrn and CJ Affiliate.

Third-party affiliates can earn a larger percentage of a final sale than simply a commission on a single item.

Publishers are likely to be impacted as large affiliate programs retract since a number have built revenue-generating product recommendation engines over the past few years that benefit from affiliate links, per Folio. Bloggers and others who have built businesses around product recommendations will also take a hit, per CNBC.

Whether or not it is a response to the COVID-19 pandemic, it’s clear that Amazon is tightening up its affiliate marketing program in a way that will help it retain a larger portion of referral sales.

More from author

FALCO Holsters Affiliate Marketing Program With AvantLink

FALCO Holsters, globally recognized for their distinctive approach of using one artisan in the production of each...

Helpful Advice From A Seasoned Affiliate Marketer

Affiliate marketing is one of the most interesting and lucrative industries on the Internet, in which commissions...

Affiliate Marketing Tips For Black Friday

Affiliate Marketing Tips For Black Friday: When online marketers hear the word “Q4” there is usually a...

Fears Of Starting An Affiliate Business

Fears Of Starting An Affiliate Business: Lee Ann Johnstone, the founder of Affiliate Insider, has experienced the...

Related posts

Advertismentspot_imgspot_img

Latest posts

Entrepreneurs Failure Stories Are Arguably Just As Important As Their Success Stories

Highlighting the benefits of super successful startups that became a unicorn is common in media. Stories of startups becoming unicorns or entrepreneurs making a fortune...

Shift Away From Cash And Credit Cards To Digital Wallets

By 2025 digital wallet use will account for just over half (52.5%) of ecommerce transaction value worldwide, versus 48.6% in 2021, according to the...

How To Start A Drop Shipping Business In Canada?

You should take several steps to launch an e-commerce venture. First, you should find a niche. Next, you should choose a province to headquarter your...

Want to stay up to date with the latest news?

We would love to hear from you! Please fill in your details and we will stay in touch. It's that simple!