Amazon Cutting Commissions on April 21st

b2mcd said:

Well, it appears that commissions will be cut once again on April 21st. Highest rate is now 3% for some shopping categories, while many have fallen to 1%.

Unreal, looks like this is going to affect a lot of people. They just sent out an email.

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Skitnica said:

Yeah, it absolutely sucks. But here's the deal:

1. Don't hold your breath. The change is permanent.
This wasn't a rush decision. They have data to back it up, and they've probably considered all scenarios.
Some of you have already contacted Amazon and their responses confirm this.

2. We had a good run, but they're moving on. And we're not their business partners or majority shareholders.
Yes, this change sucks. Yes, it affects us. Yes, the change was too drastic. Yes, they're letting us know just days before. And?
They're not a charity. They're a business.
When I find a better option to get results, I don't worry about how using a different supplier will affect my old supplier's economy. You don't stick with your old suppliers just because you don't want to hurt them. Amazon is the same. It just so happens that they're so big that this change affects a lot more people in a bigger way, but it's the same principle. They didn't plan this to hurt us or affect us or because they're evil. It just made business sense, based on whatever data they have.

3. And it definitely made business sense. This was coming.
The reason we were relying on Amazon is that it was bountiful. I mean, look at the percentages from other big brands like Walmart or Best Buy. It's not like they were much better than Amazon. Hell, some of them were/are even worse. And those brands don't have the conversion, shipping, refund, or reputation as Amazon.
Just read the thread. Most of us are asking, "If it isn't Amazon, then where do we turn to?" and there's no clear answer. Why? Because there was no better option than Amazon. There isn't one right now, either.
So why would Amazon, the best option pretty much across the board, be the one paying the most to affiliates?
And don't go "Oh, this site pays a way bigger percentage than Amazon." I mean, as far as your actual income goes, Amazon was on top, no question.

4. No one cares about our plight.
We could get all major networks and newspapers all over the country to tell our story and show the world how Amazon is affecting us. Guess what? No one cares.
We're like a beautiful traveling Instagram model, complaining about how this pandemic is affecting her upcoming photo shoot in Ibiza and how a six-figure contract with a makeup brand fell through because of travel restrictions. Do you think normal people care about her plight? Of course not!
And just like her, normal people won't care about our plight. Do you think normal people are going to care about how we're not going to be able to make as much residual profit from a laptop while they just lost their jobs and are looking at zero income? Put it into perspective.

5. Amazon will grow bigger.
Come on. I've been reading replies saying this will affect Amazon. Really?
Stores and malls were already having a bad time BEFORE this pandemic.
And I can bet a lot of people that didn't use Amazon, are using it now.
And you can bet a lot of brands that didn't want to be on Amazon are calling them to reopen talks.
Besides, why are you thinking that moving somewhere else will not bring the same issue further down the road? They're all businesses. If we all get together and move to Walmart or whatever other option is out there, then Walmart will ALSO lower the commissions at some point in the future. It's not Amazon, it's every business.

6. Percentages will keep dropping.
Nowadays, it's not about helping people get to know Amazon. Everybody knows Amazon right now.
Think like a company, guys and gals. They don't need to be on the top 1,000 search results. They just need to be on the top 50. They already have that.
What's the next step? They want to skip their middleman, Google. It's better for them if people go and stay at Amazon (instead of Google, then Amazon).

7. Put it into perspective.
We're still able to make a living or make a buck while working from home.
Just think of how many unemployed people, scared not just because they lost their jobs, but because they don't even know if there will even be an available job out there... don't you think they would jump at the opportunity of being able to earn that extra 3% or 1%?
We're the little fishes that are swimming behind the great white shark. We have a mutualist relationship. Amazon allows us to earn money, and we send customers their way. The difference is there's just one Amazon, and we're thousands of little fish (some bigger than others, of course). If some of us go away, the shark won't notice because new ones will join. If we ALL go at the same time, we affect ourselves more than we affect the shark. And the shark will be able to go on for quite a while, assured he will gain new little fishes.

In the end, the shark is a jackass, but I'm staying with this shark.

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magicjones said:

Good post but I was actually making way more from other affiliate programs before the rate drop. Amazon only represented about 20% while the rest is other eCommerce websites.

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ranga said:

I think reason for Amazon cutting commission was to actually reduce traffic and sales. Currently, Amazon is facing challenges in shipping their existing orders. If they don't ship on time, their reputation goes down. I am seeing lot of orders pending shipping for long time. Also, the return rate increases due to shipping delays. So, the best way to reduce traffic, is to reduce paid ads and affiliate commissions.

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ClickNinja said:

Care to say which affiliate programs that you're making more with? So many people saying things like that in this thread with no one suggesting any decent alternatives for Amazon.

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Brighter Faster said:

I don't think there is a direct replacement in the sense that there isn't a single merchant you can sign up for and just replace all of your amazon links.

I make way more money by having relationships with leading manufacturers and retailers in my niche. But saying which places those are would effectively be saying which niches I'm in and wouldn't really be helpful anyway. So yeah, you just have to figure out the right retailers and manufacturers in your niche are and then negotiate deals with them. Definitely more work than Amazon but it was paying better before these cuts, and is paying way better after.

You also need to market these new places and convince your customers to buy from them (not that hard). It's like the old days when affiliates actually had to convince people to use Amazon.

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Tyler Casper said:

I just started going hard core with them this month... Guess it's going to be back to the drawing board... Dang... Anyone have a good alternative?

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Bim Zon said:

Amazon is doing a test. Amazon reduces commissions and they will see these changes within a while, if their market share is still good then Amazon will stop affiliate program. If things go bad then they will increase the commission rate again. So, you better remove the link to amazon to save yourself. And only go back to amazon when they have clearer commitments.

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magicjones said:

Good post but I was actually making way more from other affiliate programs before the rate drop. Amazon only represented about 20% while the rest is other eCommerce websites.

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ranga said:

I think reason for Amazon cutting commission was to actually reduce traffic and sales. Currently, Amazon is facing challenges in shipping their existing orders. If they don't ship on time, their reputation goes down. I am seeing lot of orders pending shipping for long time. Also, the return rate increases due to shipping delays. So, the best way to reduce traffic, is to reduce paid ads and affiliate commissions.

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El Flaco said:

I don't think so. People might be more indulgent about delays in this special time. The change is permanent as they said and has been thought a long time ago. They aligned their rates on Walmart rates. They perfectlty know what alternatives we have and they know they still can't be beaten with a highly reduced rate on many products because they convert better than other competitors. At the end of the day, their ultimate goal is to have only direct traffic ; having Prime members going straight to Amazon without even searching on Google for alternatives so they can have all the cake for themselves. Maybe they saw an opportunity with this crisis to cut down marketing expenses but there won't be any return to previous times after the crisis. People now shop on Amazon like they search on Google.

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ranga said:

For many of us a lot of products are stuck in shipping on Amazon as they are delaying delivery for non-essential items. I personally have high 4 figures worth of stuff pending shipment, some of them even before their announcement of commission structure change. However, the commission paid will be based on the date of shipping. Take that.

Easy money for Amazon to line their pockets with by just delaying shipping.

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