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Changes to Amazon’s Commission Structure: What You Need to KnowMichelle
Amazon recently announced a major change in the way they will pay out affiliates in their Amazon Associates program. Starting March 1, the commission structure will move away from a volume-based fee and begin paying a flat fee based on the product category.
Amazon Associates is an affiliate program that allows you to access Amazon’s giant inventory of products, generate affiliate links and make money from your referrals. This program has been a great way for affiliate marketers to generate revenue through Facebook Pages, as well as blogs and other online avenues. Several online marketers make a good monthly income from selling Amazon products alone.
Not only do you get a commission on the product you referred, but when people buy other products after your link takes them to Amazon, you also earn a commission on those items. As long as the customer orders within 24 hours, or longer if the visitor adds items to their cart and returns to pay later, you get a commission on all of the items they purchased.
For those of you just getting started with Amazon Associates, these changes to the payout will help you understand where to focus your marketing. But if you’re already selling 10 products or more per month, you’ll want to keep reading. Changes to the affiliate payout may have a significant impact on your monthly income.
Current Amazon Affiliate Payout
Since commissions have been based on the volume of product sales you made each month, you could earn more with the more products you sold. With the new changes taking place, you will earn the same rate no matter how many products you sell.
The current payout has percentages anywhere from 1% to 10% depending on the category. For anything that doesn’t fit in those categories, the payout was based on how many products you sold per month. You started at 4% and capped out at 8.5%.
Amazon Associates is switching to a flat fee based on the product category. All payouts is a fixed percentage based on what is purchased. The rates per category are listed below, and products in any category not listed are capped at 4%.
These changes will have the biggest impact on those who are currently hitting 8.5% on a monthly basis. For example, if you are successful at promoting and selling books and are currently at the 8.5% mark, your commission rate will drop to 4.5%. In the big picture, that takes you from $8,500 per $100,000 of revenue to $4,500.
What Should You Do?
These changes can be a game changer for some. Many things in online business are beyond our control and the best we can do is be ready to adapt when the unexpected happens.
Amazon’s changes encourage affiliates to direct people to certain product categories, especially digital. To earn a decent income with Amazon, focus on promoting products in the categories with the highest payouts.
Since you never know what is going to happen, it’s important to diversify your streams of income. Amazon is still a free program to participate in and there is a great opportunity to earn income there, but don’t put all your eggs in one basket. Participate in other affiliate programs in your niche. Remember that in addition to the Amazon tool, FPTraffic allows you to post content and earn from eBay as well.
What do you think about Amazon’s changes to the affiliate payout? How will this affect your monetizing? Let us know by leaving a comment below!