Amazon is reducing the commissions it pays affiliates who advertise and connect to the eCommerce giant’s products in their sites. The program, known as Amazon Associates, has been set for years and is a meaningful source of revenue for affiliates, such as publishers. In a memo obtained from CNBC, Amazon said it’s reducing the commission rates starting April 21.
A spokesperson for the tech giant would not say whether the movement was driven by the COVID-19 pandemic. As an example rates for furniture and home improvement products have been cut to 3 percent from 8% whilst grocery product commission prices dropped to 1% from 5%.
The commission reductions are a substantial blow to a Amazon affiliates who rely on commissions because a main part of their earnings.
Websites such as BuzzFeed publish buy lists that induce readers to Amazon goods in return for a cut of those sales. The cuts employ to U.S. affiliates, the Amazon spokesperson said, noting it regularly assesses its programs and that changing commission rates is a conventional industry wide practice The movement to decrease the percentage affiliates get for Amazon merchandise sales comes only days after the eCommerce giant began accepting imports of non-essential things from third-party sellers who make up more than 50 percent of its earnings.
Amazon was prioritizing essential orders required amid the pandemic but will currently accept products out of that in its warehouses at the U.S.
Here’s what Amazon is telling members of its affiliate program:
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 Amazon Associates Program
Amazon’s business has been impacted on a number of fronts as a result of the coronavirus outbreak. Hit with a surge of online orders, the company moved to prioritize shipments of essential items in its warehouses, though it has since begun winding down those restrictions. The virus also forced Amazon to temporarily pause its Prime Pantry delivery service, while its Amazon Shipping pilot program will be halted in June.
Prior to Tuesday’s announcement, Amazon had already made some cuts to its commerce marketing deals. Last month, the company informed digital media firms it would suspend commerce marketing deals, according to The Information.
One member of the program, who asked to remain anonymous, said they “cannot afford” the fee cuts that were announced, since a main portion of their income comes from commissions earned via Amazon links. The member runs several Facebook groups that advertise shopping deals across the web, including Amazon products.
“All the affiliates I talk to make the majority of their money from these categories,” the member said. “It’s going to hurt a lot of people.”
Bloggers and online businesses voiced their frustrations about the cuts on Twitter and Reddit. In a Reddit forum for affiliate marketing, one member of the program wrote: “These slashes are ridiculous. Together with a high chance of upcoming recession, SEO/affiliate outlook is pretty gloomy, to be honest.”
Jamie French is an author, journalist and CEO of themostactivestocks.review, a leading stocks and markets website. He has more than 5 years of experience in institutional investment markets, including fixed income, equities, derivatives and real estate. He has a Bachelor in Business Administration with a major in Finance. He bought his first stocks in a private business at age 15 and made his first public stock trade at 23. David has always been interested in the stock market and how it behaves.
As the dad of two children, he’s made saving money and investing for them a high priority. Over many years of investing, he has made some wise choices and he’s made many mistakes. But he’s learned from both. Mr. Jamie observations and experience give him the insight to stock market patterns and the investor behaviors that create them.
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