On April 14, 2020, Amazon sent notice to its affiliates regarding changes taking effect on April 21st.
The changes are dramatic cuts to the affiliate payouts.
For example, the Furniture and Home Improvement categories were slashed from an 8% payout to only 3%.
There was no indication in the email that the changes were to affiliate payouts.
Unless one clicks through from the email to the page with the changes, one would never know.
Here is the text of the Amazon email notice:
We hope you are staying 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’s Changed page to see a summary of these changes. You can also find the Operating Agreement, Program Policies, and the Fee Statement if you would like to refer to the current, pre-change versions.”
The wording is vague as to what was changed.
So it is no doubt shocking to click through to see enormous changes to the affiliate payout structure.
Why is Amazon Cutting Affiliate 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 cutting fees on are related to Covid-19 buying trends that is generating unprecedented buying demand. The demand is so high Amazon is said to be hiring 100,000 warehouse workers to deal with the high demand.
With so much buying traffic already coming to Amazon it starts to make less sense to pay for traffic when Amazon already has more than it can deal with.
That said, the mood is dark in the affiliate world, with many saying that Amazon is motivated by greed by not sharing the bounty with their affiliates.
Categories in High Demand Are Affected
The changes appear to relate to products that are currently in high demand by consumers because of the COVID-19 quarantine.
Products related to the home and working from home tended to be the categories that were slashed.
Below is a screenshot of the Amazon affiliate payouts, with fees highlighted:
Amazon and other businesses are cutting their advertising costs, particularly for products that are in high demand.
Looked at from that perspective, it makes sense that Amazon is lowering the payout fees for products that are already flying off the warehouse shelves.
Not All Categories are Affected
The cuts are not across the board.
Many categories remain unaffected.
For example, the Luxury Beauty and Amazon Coins categories continue to have a 10% payout rate.
The digital and physical music categories continue to pay out at 5%.
But these two categories may be tough categories to earn a payout from because nowadays most people tend to listen to music via streaming services.
The affiliate payout rates for the following categories remain unchanged.
Luxury Beauty, Amazon Coins
Digital Music, Physical Music, Handmade, Digital Videos
Physical Books, Kitchen, Automotive
Amazon Fire Tablet Devices, Amazon Kindle Devices, Amazon Fashion Women’s, Men’s & Kids Private Label, Apparel, Amazon Cloud Cam Devices, Fire TV Edition Smart TVs, Amazon Fire TV Devices, Amazon Echo Devices, Ring Devices, Watches, Jewelry, Luggage, Shoes, and Handbags & Accessories
PC, PC Components, DVD & Blu-Ray
Televisions, Digital Video Games
Physical Video Games & Video Game Consoles
Amazon Affiliates Reaction is Predictably Negative
A dark mood has descended over the affiliate world.
- Should Amazon have shared their bounty with their affiliates?
- Is Amazon being greedy and disloyal to their associates?
An Internet Marketing forum discussion at Th3Core.com about these changes is entitled: Amazon to affiliates: we don’t need you anymore.
The discussion title may reflect the general mood of Amazon affiliates once they find out how their earnings are being slashed to the bone.
The forum post says:
“As of April 21, the commission structure is getting slashed”
Harsh words for Amazon on Twitter:
Amazon just wiped out the affiliate advertising game.
Lowered commissions from 10% to 3%, effective 7 days from today.
This is what it is like to dance with the beast. pic.twitter.com/uVI14dCyrd
— Molson Hart (@Molson_Hart) April 14, 2020
Insane for anyone in the #amazonaffiliate industry right now, wow!
Digital real estate values are taking 60% cut pic.twitter.com/jTEUfy2xvr
— Robert Idell (@robertidellxyz) April 14, 2020
This may be a side effect of the coronavirus quarantine.
Changes in demand are shaking up the online marketing world, particularly the advertising segment.
Advertising budgets are being slashed because of lack of demand in some areas.
Amazon Associates is cutting spending for areas where demand is at unprecedented levels.
It may mean that there is little reason to pay for traffic that is already coming to Amazon.