Amazon Associates just announced that they are changing how they pay affiliates. The new payout takes effect starting March 1, 1017. Instead of paying based on the volume of sales starting at 4% and going up to 8%, Amazon will now pay a flat fee based on the category. They also let affiliates from Arkansas back into the program.
Here's a recap of the changes and some ideas on how it will affect different types of affiliates, including bloggers.
Current Amazon Payouts
The current payout has percentages for each category, that hasn't changed. It's anywhere from 1% to 10%, depending on the category.
For anything that doesn't fit the categories listed above, your payout was based on volume sold per month. The lowest being 4% and the highest payout was 8.5%.
New Amazon Payouts
The new payout eliminates the volume. So everything is a fixed percent based on what is purchased. This change will go into effect on March 1, 2017.
Here's a partial list of changes, summarized:
- You make nothing from Amazon gift cards or wine, you used to get 2% for Amazon gift cards and 4% for other retailer's gift cards.
- Video games, TVs, PCs, PC Components payouts stayed the same.
- DVD and Blu-Ray dropped from 4% to 2.5% but digital went to 5%.
- Toys are added (which means they cap out at 3%) – ouch that has to hurt toy bloggers, time to look for an alternate program!
- Amazon Kindle and Fire stays at 4%.
- Physical books, health/personal care, sports, kitchen, automotive, and baby are capped at 4.5% – ouch book bloggers, food bloggers, and mom bloggers!
- Digital music downloads, grocery (no change), physical music, handmade and digital videos are 5%. So that just capped off earnings for a ton of bloggers at 5%.
- Outdoors, tools are 5.50%, they weren't listed before.
- Pet products, furniture, home improvement, lawn & garden, Prime Pantry, and home category now earn 8% and this is the only categories where for most they come out ahead. Pet bloggers, home improvement, and garden bloggers rejoice!
Anything not listed in the new payouts is capped at 4%, which is what the lowest tier there was for anything not listed. Anyone who sells more than 6 items a month is staying the same or getting a pay cut. What does Amazon pay well for? Amazon Coins (who uses those?), Digital video games (stayed the same), and Luxury beauty (not sure how to know exactly what's included).
To me this says to focus on categories with the highest payouts and that Amazon wants to reward digital.
Case Study – Will you Get a Pay Cut?
Another blogger warned about these coming changes a few weeks ago, in this blog post by PotPieGirl. In an update she also shared some numbers to give an idea of how the changes would affect her business.
Going into her reports she found that when she shipped 162 items she earned 7% and brought in $6,109.87 worth of sales. Her payment was $427.70. With the new earning structure she would make $363.55 for the same number and amount of sales. That's a $64.15 loss for a month. So yes, she got a pay cut. If her income dropped $64 every month for a year that's over $750.
I still think (like she concluded) it's worth using Amazon affiliate program but I wouldn't rely on it. You always have to diversify. You may need to join other affiliate programs for your bestselling items. My visitors often only buy what I link to or just one thing (they must be Amazon Prime members). So it makes sense for me to test replacements or additions to Amazon's affiliate program.
Affiliate Marketing Takes A Commitment to Constantly Learn and Improve
With any affiliate program, your earnings can go from thous
ands to nothing overnight! It's how things work – ask me how I know 🙁 You have to constantly learn and adapt. That will not change. So don't give up, just keep testing and learning to protect yourself from inevitable changes in affiliate marketing. You can just expect it!
If you want to get better at Amazon affiliates, you can start here. You can learn Amazon affiliate marketing from PotPieGirl's classes – she has several. She knows Amazon's affiliate program very well and has a very easy-going style that is easy to learn from.
I've taken a few of her classes and worked to get my earnings from around $30 a month (which I just used to buy more product) to almost $300 a month in one month.
There are many programs that pay more than Amazon, have more favorable terms and communication, but Amazon is still an easy choice because they have almost everything. Plus they make it easy with their Amazon Associates plugin for WordPress and other tools.
Remember, you get paid for anything purchases for 24 hours after someone clicks on your Amazon affiliate link. I really wish they'd throw us a bone and given a 48 hour or longer cookie but I see the trend is to mostly cut. With the power and variety of Amazon's products and reach, it's distressing but not surprising.
What do you think of Amazon's new payouts for affiliates? Think they will hurt you, help you, or will you earn about the same?
Great reporting! I have Amazon as part of my strategy, but it’s a very small part mainly because I’ve never been a big fan of their pay structure. Now with these changes I’m even less of a fan, but when a product doesn’t have any other affiliate program, they’re better than nothing. But this post also goes to highlight what I always tell people, to diversify (as you mention), grow your list and eventually find high-paying products or develop your own.
Thanks for bringing this to my attention!
Thanks for your comment, Oscar. I agree that the best is to sell your own products and grow your list (ahem, I could improve with both). Like you, I’ve never focused a lot on Amazon but for a certain demographic (like suburban moms who have Prime and just want quick/easy) it works. My buyers tend to buy only the thing I recommend and not much else. However, the conversion rates are insanely high – yesterday’s was over 12%. So like you, I put some work into it but it’s not my main focus.
Blog on
Janet