The e-commerce giant Amazon is no different than all other businesses globally which are tackling huge hits in terms of business slowdown because of the COVID-19 situation. As the companies are taking various measures to keep the impact minimal Amazon has reportedly decided to slash down the commission rates for their affiliate program as well.
This news was delivered by Amazon to the members of its affiliate program Amazon Associates via an email wherein they mentioned the slashed commission rates will come in effect as early as April 21st.
Amazon, the world’s largest eCommerce platform, has been operating its affiliate program for years, just like Much like all other e-commerce competitors. Anyone who enrols into this program called Amazon Associates becomes a verified affiliate who is able to advertise and link to Amazon products. When Amazon generates a sale via a referral link the affiliates get paid a small percentage of the sales.
Financial Hit To Online Publishers
This referral program of Amazon is one of the many ways via which leading online publishers such as BuzzFeed, The New York Times and Vox Media generate revenue. They mostly do this by publishing guides, making unboxing videos and so on, which then drives their readers or audiences to buy products via their affiliate links.
Hence, Amazon slashing down the rate of commission is definitely going to be a huge hit for these online publishers and many other individual content creators who have so far been heavily relied on it besides sources of generating income via the internet.
Many bloggers and online businesses have voiced their fears and frustrations over these cuts on Twitter and forums like Reddit.
In one Reddit forum which is entirely dedicated to affiliate marketing, a member wrote “These slashes are ridiculous. Together with a high chance of upcoming recession, SEO/affiliate outlook is pretty gloomy, to be honest.”
Worldwide, Amazon has 13 affiliates supported storefronts in Americas (United States, Canada, Brazil, Mexico), Europe (France, Germany, Italy, Spain, United Kingdom), Asia (China, Japan, India), and most recently Australia.
The e-commerce behemoth has slashed down the rates of many affiliate product categories. For the furniture and home improvement product category, the affiliate rate has fallen from 8% to a meagre 3%. The high-in-demand nowadays grocery products category has suffered the worst as Amazon has cut down the commission from 5% to only 1%.
The news of this change in affiliate margins for all U.S associates has been confirmed by an Amazon spokesperson. However, it wasn’t made clear by him if this was due to the wrath of the COVID-19 pandemic.
The Amazon spokesperson further added that the Amazon Associates category is regularly evaluated by the company and that such revisions in rates are a ‘standard industry practice’.
Here’s a comparison of the rates before and after the changes were made:
Amazon Cutting Affiliate Rates: Impact of COVID-19
It is no mere coincidence that Amazon has decided to slash their affiliate rates amid this pandemic. Amazon’s business has taken huge hits on numerous fronts because of the coronavirus outbreak.
Amid this situation, the company had to prioritise the shipments of only essentials by shutting down all other categories such as electronics from where it usually generates most of its revenue like all other e-commerce marketplaces.
Also, prior to this announcement, the company already informed digital media firms last month that they will be slashing most of their marketing budget from search and display advertisements.
Now, it will be interesting to observe what alternative ways will most content creators and publishers come up with to generate revenue during these unprecedented times. As the most relied upon options such as the Amazon Affiliate program has drastically cut down the commission of Associates, this could be an opportunity for other comparatively smaller estores to attract the affiliate force working for Amazon until now.