Yesterday, Amazon sent an email out to the Amazon Affiliates discussing changes that would take effect from 21st April. Whilst the email is vague, it’s message – that there will be big cuts to the affiliate payouts – will have a dramatic impact on the livelihoods and businesses of many Amazon Affiliates. I’ve lived through this before and I can tell you it can hurt or destroy a business.
I say the email was vague because the email itself didn’t actually discuss the changes to the way amazon would be paying its affiliates, rather than email requires the reader to click through from a link to see how they will be affected by the changes.
The email from Amazon read:
We hope you are staying well during this time. We are writing to inform you of upcoming changes to the Amazon Associates Program Operating Agreement, which governs your participation in the Amazon Associates Program.
All changes are effective as of April 21, 2020.
Visit the What’s Changed page to see a summary of these changes. You can also find the Operating Agreement, Program Policies, and the Fee Statement if you would like to refer to the current, pre-change versions.”
Based on the wording in that email, I’d be surprised if many affiliates were prepared for what they’d be confronted with when they clicked through from the email and I wouldn’t be surprised if many affiliates decided not to bother clicking through at all.
Categories Affected Have Something To Do With COVID-19
The categories Amazon has decided to reduce the payout on appear to be categories with items closely related to the COVID-19 Crisis, with many of them being in the home and working categories.
Amazon does review the prices they payout to their affiliates from time to time and it does make sense that they would reduce their costs on the products that are currently in high demand. But I can promise you once Amazon reduces the payout they are unlikely to go back to paying out more in the future.
I’ve been at the sharp end of this myself. In 2011 / 2012 I was running a printer ink business with a friend and we the business was working because of Amazon, that’s where the majority of our sales came from and the percentage they paid out (something like 13% if I remember rightly) made the whole endeavour work. We got a similar email to say they were slashing the payout and suddenly we found the business model just didn’t work anymore and though we pivoted and tried to do other things that business ceased trading around a year later.
Hostility from Amazon Affiliates
It goes without saying that Amazon Affiliates aren’t happy with the changes.
And on Twitter there is plenty of Tweets about how this is the end of advertising on or around Amazon:
Amazon just wiped out the affiliate advertising game.
Lowered commissions from 10% to 3%, effective 7 days from today.
This is what it is like to dance with the beast. pic.twitter.com/uVI14dCyrd
— Molson Hart (@Molson_Hart) April 14, 2020
With this guy demonstrating how the changes will affect affiliates:
Amazon slashes affiliate payouts up to 80%. pic.twitter.com/mKjTaWZz0l
— Ishmam 🚀 (@IshFillet) April 14, 2020
Whilst many affiliates see being an affiliate as a business it’s important to recognise to Amazon affiliates are an advertising channel. As such, if they don’t need the advertising channel they will eventually turn it off. That means if they are getting high demand from the public already, why would they pay someone else more money to generate that revenue?
I’ve never forgotten what Amazon did to our printer ink business back in the day and it’s a reason I’ve never used affiliates (or advertising) as a revenue source since.