Referral Fees Cut, What Next For Amazon Associates in The UK?
Posted by Charles on June 30th, 2009
Last week Amazon sent round an email detailing a significant change in their Associates program fee structure, attempting to put a positive spin on it:
“We have raised the top referral fee rate in our tiered model. Most Associates can now earn up to 9% on Qualified Products, an increase of 1.5% from our previous referral fee structure.”
Unfortunately the reality is a little further from the truth, unless most affiliates are selling over 30,000 products each month:
To recap on how the existing commission structure works:
- 5.00-7.5% base commission (depending on volume)
- 2.5% bonus if users purchased the product you sent them through to
- £7.00 cap on electronic products, but no cap on everything else
Therefore in the past you could expect to earn 7.5% base commission (5.00% + 2.5% direct linking bonus) when promoting individual products. You’re now looking at just 5.00%, a 33% cut in commissions which will have a significant impact on PPC affiliates (and incidentally quite a few of my sites!).
Interestingly, at the same time it looks like another commission structure with no cap (discussed here) has been introduced for direct-to-merchant PPC affiliates:
What does all this mean? Lower payouts for content affiliates and higher payouts for direct-to-merchant affiliates. Of course, this will simply make getting on the Amazon URL harder than ever as more affiliates attempt to outbid each other.
Why has Amazon done this? Perhaps the were worried about their site being outranked in the sponsored links by landing pages so have offered more commission for those affiliates that send traffic direct. Or perhaps they’re using it as an exercise to gather more PPC data before culling direct PPC affiliates altogether, as they did in the US earlier this year.
My money is on both those reasons being likely but either way the misleading positive spin is disappointing and Amazon’s affiliate program is now a lot less generous to content affiliates. What do you think of the new commission structure?