On April 14th the titan company known as Amazon has made public an announcement stating that, as of Tuesday 21, the company would make severe changes to their affiliate commission pay rates.
Amazon Associates, the affiliate program for Amazon, is slashing rates at the worst time for affiliates
Amazon has 13 markets supported storefronts all over the world. Countries like: the United States, Canada, Brazil, México, France, Germany, Italy, Spain, the United Kingdom, China, Japan, India and Australia, and this cut off will of course affect a part of these countries online economy, specially bloggers, influencers and webmasters that use the Amazon’s Affiliate program to generate a part (of the total) of their incomes.
This measure will represent a great impact in some categories, for example: the furniture and home income will suffer a 5% decrease (from 8% to 3%) and the grocery items will suffer a 5% to 1% decrease.
Even if the company has not officially claimed it, these changes are obviously related to the global situation with the Covid-19. However we cannot affirm that the virus itself is the only reason behind this decision but rather because of the consequences created by this situation.
In any other case we could say that amazon is going broke, but the case is the complete opposite as the company is so “well” that they can’t handle the actual demand. This represents an excellent example how even a great amount of demand (that could be seen as more income for the company) can become chaos in a matter of time.
There are several reasons for amazon to create this kind of “contingency” measures, and, apart for the great amount of demand Amazon was apparently not prepared to deal with the consequences of a pandemic disease such as this.
The main problem with Covid-19 is that this virus makes everyone stay at home to prevent infection while scientists around the world look for a cure, this results in a massive amount of online orders coming to amazon at all times.
In order to keep up with this demand the company had to hire over 100,000 warehouse and delivery workers in order to keep up with the request for medical and cleaning supplies. Amazon is also planning to add another 75,000 workers in the near future to be able to keep up with their user’s request.
Other measures taken by the company was to increase their return policy window and to improve their safety measures as their workers started to protest against the lack of adequate protective gear against the Covid-19.
These measures of course cause an increment in the company’s budget and of course one of the counter measures is to cut off some “unnecessary expenses”.
Below is a list with the previous percentage income versus the income that will be established on April 21st on each respective category:
- Furniture, Home, Lawn, Pet and Pantry: from 8% to 3%
- Headphones, Beauty, Musical Instruments, Business: from 6% to 3%
- Outdoors, Tools: From 5.5% to 3%
- Grocery items: from 5% to 1%
- Sports: from 4.5% to 3%
- Baby products: from 4.5% to 3%
- Health and Personal Care: from 4.5% to 1%
- Amazon Fresh: from 3% to 1%
Many websites, and therefore, webmasters (especially inside the US) depend on Amazon Affiliates to make a living, and with this cuts the results can become detrimental not only to websites and webmasters but also to this part of the online economy.
Just think about it, you wake up in the morning with a message from your boss that due to the global situation they had to do some cuts, you won’t lose your job, but you will make from 60% to 80% less, how well could you take that?
Due to the Amazon’s announcement a lot of people all over the internet had started to mark this decision as “ridiculous” and “impossible”, many of them even implied in their comments that this could mean the beginning of the end for the Amazon Affiliate program.
However, many others mark this decision as a “logical business decision” in order to cut off unnecessary cost on this difficult times; of course, there is also a lot of people that claim that this is only an excuse made by amazon to not share the huge “loot” with their affiliates.
A great point that this theory has (looking at it from a reasonable point of view) is that Amazon is not obligated to pay for a traffic that they no longer “need” because with their current situation they can barely manage to be on par with the actual demand; of course, even if this is the “most logical” option to take, Amazon’s affiliates emotions come to play and the complaints are all over the internet within just a few hours of the announcement, especially with you also add to the mix their email that “hopes that you (the affiliate) are well” but sadly they have to inform you that your income can be reduced to an 80% in the worst case scenario.
Just imagine for a second what would happen, not only to you, and not only to the online economy, but the whole world economy if all companies have to make measures as critical as this.
Finally, even though it all seems bad news for affiliates that work with Amazon, the “good part” of this bad news is that some of the categories will remain intact even after the cut off, the bad part is that most of the following categories are between the most difficult niches to promote in order to get a real or “significant” income out of your website’s traffic.
- Luxury, Beauty and Amazon Coins: will remain on a 10%
- Digital and physical music categories: will remain on a 5%
- Physical books, Kitchen and Automotive: will remain on a 4.5%
- Amazon Fire, Amazon Kindle, Amazon Fashion, Amazon Cloud, Amazon TV, Amazon Echo, Watches Jewelry, Luggage, Shoes, and Handbags & Accessories: will remain on a 3%
- Toys: will remain on a 2.5%
- PC, PC components, DVD and Blu-Ray: will remain on a 2.5%
- Televisions and Digital Video Games: will remain on a 2%
- Physical Video Games and Video Game Consoles: will remain on a 1%