Sad new for affiliates! If you haven’t read the updates in the Amazon Associates Program Operating Agreement, this might come as a shock. It isn’t showing up clearly on their website yet, but starting on the 21st of April Amazon Associates is changing the Standard Program Fee Rates of multiple product categories… And they are much lower than they used to be.
Which product categories are affected?
Amazon will lower the commission rate on a lot of product categories. As you can see in the screenshot above all of these categories have changed commission rates:
- Furniture, Home, Home Improvement, Lawn & Garden, Pets Products, Pantry
- Headphones, Beauty, Musical Instruments, Business & Industrial Supplies
- Outdoors, Tools
- Grocery
- Sports
- Baby Products
- Health & Personal Care
- Amazon Fresh
Old versus new commission rates
We’ve made a comparison between the old and the new commission rates. As you can see some of the commission rates decreased by 80%. The decrease of 62.5% for furniture, home improvement, pet products and lawn & garden may be the biggest blow for affiliates because many affiliate niche sites focus on these product categories.
- From 8% to 3%: Furniture, Home, Home Improvement, Lawn & Garden, Pets Products, Pantry (62.5% decrease)
- From 6% to 3%: Headphones, Beauty, Musical Instruments, Business & Industrial Supplies (50% decrease)
- From 5.5% to 3%: Outdoors, Tools (45.5% decrease)
- From 5% to 1%: Grocery (80% decrease)
- From 4.5% to 3%: Sports, Baby Products (33.3% decrease)
- From 4.5% to 1%: Health & Personal Care (77.8% decrease)
- From 3% to 1%: Amazon Fresh (66.7% decrease)
Why did Amazon cut commission rates?
COVID-19?
Right now a global pandemic is happening. Did Amazon cut commission rates because of the Coranavirus (COVID-19)? Honestly, this seems unlikely. These changes seem to be permanent. If these changes were made with COVID-19 in mind then they would have been mentioned as temporary.
Because they can?
Bingo! Amazon probably lowered the commission rates because they don’t really need affiliates any longer. They are the number 1 online store for almost anything. People go directly to Amazon these days. By lowering affiliate commission they can cut their advertising budget, probably without a noticeable income change.
What does this means for affiliates of the Amazon Associates program?
As you can see above many affiliates that operate in one of the niches above will see their income drop by 33.3% to up to 80%, a massive drop. This means that they can go from a stable, well earning business to a nonviable business in a day.
What now?
Some affiliates might quit. Some might try to increase traffic to make up for the losses. Some might look for a different online store to promote
One of the key takeaways for affiliates is that they should have diversified income sources. Don’t be dependent on only one player. Don’t be dependent on one niche only. Have different affiliate networks.
Amazon Associates Alternatives
These changes are a huge opportunity for other major online retailers and affiliate networks. Many affiliates will go looking for alternatives to the Amazon Associates program now. Here are a few:
ShareASale: ShareAsale has many offers in the Home & Garden and Fashion product categories. They offer royal commissions and unique products, but the brands are less well known.
AWIN: AWIN is a huge affiliate network. They have nearly 300 offers for retail and shopping brands in the US alone and 1000+ offers for retail and shopping worldwide.
Walmart: Walmart is a perfect alternative for the US market. Walmart pays 4% for home, health, sports, toys and baby products. The affiliate commissions for Walmart used to be lower than the affiliate commissions of Amazon. After Amazon’s changes the Walmart rates are better for these categories.
CJ: CJ (Previously known as Commission Junction) is an affiliate network that has offers for Office Depot, Lowe’s and Barnes & Noble. Also fine US alternatives to Amazon.
Amazon Product categories with unaffected commission rates
Luckily there are some product categories in the Amazon Associates program where the commission rate stays the same. These are:
- Luxury Beauty, Amazon Coins (remains at 10%)
- Digital Music, Physical Music, Handmade, Digital Videos (remains at 5%)
- Physical Books, Kitchen, Automotive (remains at 4.5%)
- Amazon Fire Tablet Devices, Amazon Kindle Devices, Amazon Fashion Women’s, Men’s & Kids Private Label, Apparel, Amazon Cloud Cam Devices, Fire TV Edition Smart TVs, Amazon Fire TV Devices, Amazon Echo Devices, Ring Devices, Watches, Jewelry, Luggage, Shoes, and Handbags & Accessories (remains at 4%)
- Toys (remains at 3%)
- PC, PC Components, DVD & Blu-Ray (remains at 2.5%)
- Televisions, Digital Video Games (remains at 2%)
- Physical Video Games & Video Game Consoles (remains at 1%)
If you have an affiliate site in this niche: Good for you! But think about diversified income sources and having different affiliate networks.
Whats next?
We don’t know yet. Subscribe to our newsletter and we’ll let you know once we do!