Amazon decided this week that they don't need their affiliates to drive sales anymore.
The retailer sent out an email to web publishers who belonged to the Amazon Associate program this week. You can find the email at the end of the post, but the short version is that Amazon is cutting the commissions it is paying on sales generated by the affiliates.
Under the old system, well, it was complicated.
Certain product categories paid specific commissions - Kindles and Fire tablets earned 4%, for example - while the bulk of the merchandise had a variable commission which increased as an associate sold more items (your first commission on a sale was 4%, the seventh as 6%, and the 631st was 8%, etc - more details here).
Under the new system Amazon is doing away with the variable commissions. Instead, all products will earn a flat commission based on its category. An Amazon affiliate will still earn 4% from Kindles and Fire tablets, while gift cards earn nothing and paper books will earn 4.5%.
The new rules will take effect on 1 March, and you can read about the new program here.
O O O
When Amazon changed the affiliate program in the past, it was usually easy to see why. In 2013, for example, Amazon took steps to discourage sites from promoting free ebook downloads. And last year Amazon brought the hammer down on free ebook newsletters shortly before launching its competing service.
Now Amazon has removed the incentive for affiliates to be as active as possible in promoting goods sold on Amazon. Instead, the retailer is now paying a flat commission.
Amazon is saying that they don't want to pay as much they used to; they no longer value the more active affiliates. That is their right; Amazon is in business to make money, and I can understand why they made this decision.
But I can also foresee that this change in policy will impact sites which depended on Amazon's affiliate program for income.
I have been crunching my numbers, and I expect to lose about a fifth of my Amazon affiliate income. That's going to hurt, and I won't be the only one to feel the pinch.
There's going to be a winnowing of book review blogs on par with the demise of book industry blogs last year. Book bloggers are going to look at their falling income, consider how much time it takes to read and review books, and decide that it is no longer worth keeping up the blog.
The smarter bloggers will find new sources of income (perhaps charging fees to authors) but many will decide their blog is no longer worth the effort.
And that is something authors will need to keep in mind as they plan their book launches for 2017.
That blogger you had planned to work with in June, September, or November might have thrown in the towel by the time that your book launch rolls around.
It would be a good idea to plan for backups.
Dear Amazon Associate,
We are writing to notify you of some changes to the Amazon Associates Program effective March 1, 2017. Changes include, but are not limited to: promotional rate changes, revisions to program policies, and updates to the Fee Statement. For more information about the Fee Statement changes, please find additional context below.
- What are the Fee Statement changes?
We will be updating the Fee Statement. The new plan simplifies our fee structure, removes all earnings caps on PC products and eliminates volume tiers.
- Why are we applying those changes?
We have received feedback from associates that the advertising fee structure could be made clearer, especially with respect to understanding which products are in fixed-fee categories and which products are in tiered-fee categories. These changes simplify the fee structure, clearly defining the advertising fees you can earn by referring traffic to Amazon. By offering higher advertising fees in certain categories, we want to reward associates that can refer sales across those categories.
- What's on the horizon?
In addition to earning advertising fees for referring product sales, remember that you can also earn bounties for referring your visitors to a range of other Amazon services, including Prime Video, Prime Music and Kindle Unlimited. We will be adding additional bounty opportunities this year, as well special promotions throughout the year. Please visit https://affiliate-program.
The Amazon Associates Team
image by MikeBlogs