Earlier this month, Amazon dropped a bombshell on its affiliate marketers. The unexpected bombshell was dropped on the 14th of April.
In its email, Amazon announced that it was slashing affiliates payouts to as low as 3% and even 1% from 8% in the category of furniture and home improvement.
The email that bore this news did not outrightly reveal this information. Amazon associates were directed to click on a link in the mail to access this information.
The email reads:
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 mail was vaguely worded that one had to read further to get the message it conveyed. It there came as a big surprise to those who went further.
Why the cut in Affiliate Fees
We’re not trying to play the devil’s advocate for Amazon. It, however, seems like a logical business decision.
The affected categories for one, have seen an unprecedented rise owing to the current COVID-19 pandemic.
The upsurge in demands in these categories has seen Amazon employ about 100,000 workers for its warehouse.
With this much traffic, it seems like a waste of resources to pay for traffic through the affiliate program.
The affected categories seem to be connected with working from home or staying comfortably at home, thanks to the global quarantine.
The good news is that not all categories are affected
The unaffected categories include the luxury beauty and Amazon coins which have stayed at 10%.
The Digital Music, Digital Videos, Physical Music, and Handmade have stayed at its Pre-COVID-19 5%.
Physical Books, Kitchenwares and the Automotive category still stay at 4.5% while Apparel, Amazon Echo Devices Amazon Fire Tablet Devices, Amazon Kindle Devices, Luggage Amazon Fashion Women’s, Men’s & Kids Private Label, Jewelry, Amazon Cloud Cam Devices, Watches, Shoes, and Handbags & Accessories were left untouched at 4%.
Toys are still at 3% while personal computers and accessories and DVD & Blu-Ray are still at 2.5%.
Digital video games and TV sets are still at 2% while video game consoles and physical video games remain at 1%.
Expectedly, the reaction from Amazon’s affiliates has been characterized by rage and anger with some calling Amazon greedy and unwilling to share its profits from the high traffic.
The reaction has been negative across various social media platforms.
Th3Core.com, an online forum which discusses internet marketing opened a conversation titled: ‘Amazon to affiliates: we don’t need you anymore.’ the reaction wasn’t any softer on twitter with @Molson_Hart tweeting that
The above gives an insight into the feelings and reactions of affiliates. It, however, makes zero economic sense to pay for traffic that comes to Amazon without the intervention of affiliates.
Perhaps it is a side effect of the quarantine but there is no telling if this is temporary or if it is the new normal.