Amazon Associates Commission Slash: How Will This Affect Affiliate Marketers?

Is the Amazon affiliate program gradually coming to an end?  Since the breaking news about the updated terms and conditions on slashing affiliate commission rates from April 21, there has been some uproar among affiliate marketers concerning this decision.

According to a CNBC report on April 14, Amazon spokesperson confirmed that the company notified affiliates in the United States about the fee change. The spokesperson refused to comment on whether the decision was an implication of the coronavirus crisis.

The spokesperson also said that Amazon regularly analyzes its program offerings to secure it’s competitive position with the broader industry and added that such rate of evaluations are merely standard business procedures.

Here are the rates for product categories to be changed,

The affiliate slash is quite drastic as illustrated above. Furniture and Home improvements have reduced from 8% to 3%, while grocery and other edibles have gone from 5% to 1%.

This change was obvious right from the start of the pandemic,  see article about: Coronavirus vs Amazon Associates

But the controversy here is,  since the beginning of 2020 Amazon has had series of successful records with share prices, and the E-commerce market generally. As at the time of this article, Amazon’s share price has been up by 8% which is laudable, and the entire Market since February 14, has had a down rate of 18%. Which begs the question, why such decision to cut -down on their affiliate commissions, if sales are improving?

Indicating Share Prices within the last 2 months

Indicating Market Summary within the last 2 months

(Please note that these are current analytics taken as at the time of this article, stats may differ subsequently).

With a global recession looming, and amidst this pandemic that has sent millions of people around the world queuing on the unemployment line, this could be a negative reputation for perceiving affiliate marketing as a solution to providing profitable employment opportunities, especially with the Amazon Associates program.

The Effect of Amazon’s Update on Affiliate Marketers 

Affiliate publishers have impacted Amazon’s entire market for over a decade. Almost half of Amazon’s online sales are indebted to affiliate marketers.

These marketers who have built their niches on the Amazon affiliate system over the years will definitely face the severe challenges, which this update presents.

On a positive note, It also serves as a wake-up call for diversification on their part, because obviously with these updated terms the Amazon Associates program is living its final stages as an affiliate platform.

But most importantly,  this could have a negative impact on Amazon as well,  because the more affiliate marketers diversify into other means of generating earnings,  the more Amazon sales from its affiliates will decrease immensely, and other E-commerce platforms such as Shopify, Etsy (who are competitors)  could see an increase in their online sales from their affiliate program in the future.

Amazon just gave affiliate marketers a reason to jump off the boat,  because up till this point,  Amazon’s commission prices were just “manageable” in terms of passive income,  and it was not as significant as other renowned affiliate networks paying higher commissions above 50% from different categories of E-commerce vendors.

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