Value Added Ep.01 – Amazon Slashes Commissions Up to 77%

Amidst the most challenging circumstances — economic or otherwise — many of us have ever faced, Amazon recently announced drastic changes to its popular Associates program.

The news dropped like a bomb on the world of affiliate marketing.

With virtually no notice, Amazon slashed commissions by up to 77%.

For marketers and publishers already struggling to keep their heads above water, Amazon’s decision couldn’t have come at a worse time.

SEOButler founder Jonathan Kiekbusch and Blue Dog Media head honcho Jarod Spiewak jumped on a Facebook Live Stream to discuss Amazon’s sudden move and the challenges and opportunities it presents.

The overwhelmingly positive response from followers — who also contributed questions and advice — has inspired Jarod and Jonathan to make these Live Streams a regular event.

Details and schedules are still being finalized, but subscribe here and we’ll keep you posted on upcoming Live Streams and podcasts.

In the meantime, check out Jonathan and Jarod — captured live in isolation from their home offices in Brighton, UK and Manchester, NH — in the YouTube video above.

Or check out the show notes for the first episode below:

Key Takeaways

• Given Amazon’s track record, why would Associates expect any advanced warning? Even with such a drastic reduction in commissions?
• Affiliate is a business model where the rug can be pulled out from under you at any moment.
• Despite the nightmare scenario that Amazon slashing commissions creates for many Associates, it also presents opportunities.
• Affiliates reliant on Amazon Associates may panic due to diminishing returns, making them more likely to undervalue and offload their sites. This creates an opportunity for savvy website buyers to scoop them up at a bargain price.
  
•  While Amazon Affiliates is the “easy” option, there are many other potentially lucrative ways to monetize an affiliate site, including:
  • Working directly with brands and manufacturers in the niche
  • Working with other big-box retailers with affiliate programs
  • ‘Renting’ your Facebook pixel to retailers and brands
  • Advertising revenue from RPM/CPM programs like Google AdSense or AdThrive 
• There’s little doubt that switching from Associates to another program will cause conversion rates to suffer. Amazon is not only the world’s biggest retailer, it’s the world’s biggest company.It’s unlikely any other affiliate program can offer the same level of trust or familiarity to site visitors as Amazon.
• Bearing that in mind, it’s crucial when you weigh up Amazon alternatives to consider your site’s target audience and demographic — not just the commission rate.Jarod used New Egg as an example of a site that gamers or people heavily into tech are likely to know and consider trustworthy.For visitors unfamiliar with New Egg, the site’s design and other factors may make them less likely to convert.As Jonathan said, “High commission rates don’t mean anything if people don’t buy.”
• Gael Breton of Authority Hacker commented on how important it is to utilize email opt-in CTAs and pop-up on your affiliate sites. As commission rates decline, it’s even more important to capture as many email addresses from site visitors as you can for marketing purposes.
• While it’s pure speculation, Jarod and Jonathan agree that Amazon is likely to cut commissions even further in future. They strongly advise against hoping the reduction is a temporary measure due to current circumstances.Jarod, who owns several Amazon Associates sites, is actively looking to find new programs for them.
• If your site is in a niche that wasn’t severely impacted by the recent cuts or you’re concerned about what moving to a new program will do to your conversion rate.
  
• If you’re looking to find a new affiliate program or just explore your options, Authority Hacker recently published a comprehensive guide to The Best Affiliate Programs and Networks for Bloggers in 2020.

Don’t forget to subscribe here for details on the next Facebook Live Stream and podcast!

Have any topics you’d like Jonathan and Jarod to cover in future episodes?

Let us know in the comments below!