In a move reminiscent of Michael Corleone killing off his former friends in The Godfather or Carole Baskins allegedly using a meat grinder to feed her husband to big cats in The Tiger King, Amazon’s decision to slash commission rates for its affiliate partners is both sad and shocking.
Amazon’s move to cut its affliliate commission rates 50-80% is particularly distressing because it is occurring at a time during the Covid-19 crisis has caused many people in the world at be without a viable source of income – even though the same crisis has increased Amazon’s business and propelled the stock to all-time highs.
Amazon Affiliate Commission Changes
So what’s changed and why is it such a big deal?
Here is the commission structure that’s been in effect for some time prior to April 21, 2020…
Here is the new and much reduced commission structure after April 21, 2020…
Amazon Affiliate Commissions Rate Reduction – The Real World Math
Who cares about numbers and %’s? Well in this case numbers DO tell the whole story.
Let’s try an example – imagine you are a blogger who runs a cooking and recipe website and large part of your income comes from recommending and reviewing products from Amazon. You’re driving traffic from your site to Amazon and when people purchase products from Amazon that came from your links the Amazon Affiliate Agreement pays you a SMALL commission.
Over time, you find a way to carve out a faithful following of readers who enjoy your content and appreciate the value of your recommendations. In spite of the oversaturation of the blogger marketplace, against the odds, you manage to eek out a respectable living and after lots of hard work you’re up to a six-figure income.
You make blogging your full time gig and think the future looks bright. You’ve become a success story by creating a win-win-win relationship between your readers, Amazon, and yourself.
And then one day Amazon cuts your income by 50-80% – with just a week’s notice.
Oh and there’s a global pandemic going on so you can’t easily get another job or a new source of income.
That’s the sad reality of Amazon’s decision. It may well destroy your favorite bloggers and cause you to miss out on a lot of new content and recommendations that you’ve enjoyed in the past.
Is Amazon Allowed to Make Affiliate Commission Changes?
Bloggers and websites who sign up to become Amazon Affiliates agree to an Amazon Affiliates Commission Operating Agreement that essentially gives full control of the relationship to Amazon and the organization has always reserved the right to change it’s commission structure at its sole discretion. In fact Amazon has changed/reduced commission rates multiple times in the past – but never in such a crushing manner before.
I feel sorry for my fellow bloggers who are in this situation. Like much in life it’s not fair. And there’s not much anyone can do about it.
If we don’t like the Amazon program, nobody is forcing us to be a part of it.
The fact is that Amazon has every right to reduce their commission rates, but that doesn’t make it the right thing to do from a business ethics standpoint.
Sure Amazon is the online retailer of choice for most of the world and the Coronavirus lockdowns have caused more people than ever to make purchases from the e-commerce giant.
But what’s missing in the equation is that it was the blogging community and review websites who played a large part in driving web traffic to Amazon in such a manner that Amazon thrived – especially in the early days of the ecommerce giant.The decision to destroy the commission structure is thus a de facto slap in the face to the very people who helped make Amazon what it is today.
Amazon Affiliate Commissions Destroyed – So What’s Next?
Expect to see most of your favorite sites move away from recommending Amazon’s products and into other affiliate programs – especially if they rely on it as their main source of income.
Here at That Helpful Dad, we are Amazon Affiliates. In spite of the changes, we expect that relationship (and our other affiliate programs) to continue. Why? Because blogging is not our sole source of income and we don’t produce content solely seek profits. Not that there is anything wrong with having a revenue-producing blog. Heck, we’d love if that was true for us too, however it’s never worked out that way – mainly because blogging is just a side hobby for us.
At That Helpful Dad we blog for the fun of it. And we expect to continue to do so – providing you more ‘practical solutions for real life problems’ and ‘life lessons’ you can use to live your best life now. So worry not for us with this change.
But we DO feel for our peers – today is a sad day in the blogging world.
Don’t just take my word for it. Check out these other articles on the topic of Amazon affliate commissions being slashed.
- Authority Website Income: Amazon Affiliate Earnings Change (an excellent read!)
- CNBC: Amazon slashes affiliate commissions (CNBC was one of the first to report this)
- Genius Link: Amazon.com Affiliate Commission Rates – A Historical Guide
- Search Engine Journal: Amazon slashes affiliate commissions to as low as 1%
- ShareASale: The Amazon Effect – Changes to Amazon’s Affiliate Commissions (alternatives to expect going forward)