So it happened again. It was inevitable.
On 14th April 2020, Amazon associates received a harmless normal-looking email that changed their lives (once again). It was another commission cut from Amazon.
If you are new to the affiliate marketing game, Amazon offers one of the most popular affiliate programs around the world in terms of the number of affiliates. When I joined the program back in 2016, it was decent. They had a tiered commission (the more you sold, the higher you made per unit) and in early 2018, they did their first change.
They cut commission on some categories and they also closed the tiered commission to a unit-based one. That generated a lot of anger among affiliates but everyone still stuck with it. The commission range was around 8% in some categories and averaged at around 5%.
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But they changed it again. This is what the latest change looks compared to the previous one:
As you can see, Amazon had massive commission drops across all categories. Just to put this into perspective, if you had a website in Furniture or Home niche that was making $1000/month, it will now make $375/month. That’s a big drop if you ask me.
But didn’t we all see it coming?
Think about it.
What is affiliate marketing for a company?
It is a way of marketing their products/services using third party marketing people. With the world pandemic and the growth Amazon was having, it didn’t make business sense for them to continue paying affiliates that high of a commission fee anymore.
When everyone’s buying from Amazon anyway, why pay a third party to send traffic, right?
This is exactly why I tried to educate people on why it is important to diversify your business and to use different monetization strategies on each of your websites.
Remember, you don’t build an affiliate website, you build a business and then think about the monetization strategy for that business later on. Me and Matthew Woodward had a great discussion about this exact process.
If you were building a business, you are safe. You just replace the Amazon affiliate links with some other company and it’s business as usual for you from the next day. If you have a solid business, maybe you don’t need to monetize it with affiliate marketing anyways.
You have lots of other monetization methods available to your website:
- Auto Ads (Adsense, Mediavine, Adthrive etc.)
- Renting out ad spots (manually reaching and getting a deal)
- Selling your own info product on site (eBook, courses, videos, scripts, consultations, recipes etc)
- Doing lead generation for companies
- Promoting companies on email blasts
And the list goes on.
If you are building a new site now, you shouldn’t build it focusing on Amazon’s affiliate program. Follow my process of building a website which is basically this:
Step 1: Find a topic that you like. A topic, not something stupid like food processors. That’s not a topic, that’s a product. If you are thinking that way, you will end up falling into the Amazon affiliate trap again. A topic can be, Kitchen Maintenance and food processor can come naturally in that article in a relevant topic.
Step 2: Build a site. Don’t focus heavily on review type articles. Do a 40-60 (60% informative content, 40% review style content).
Step 3: Once you have enough traffic with SEO, social media etc, start thinking about monetizing the website using the strategies I mentioned above.
For now, I am expecting the market to go a little crazy. There will be lots of people who will sell their affiliate websites (rightly so) and exit the market. There will also be smarter people who will buy sites, focus on content, invest in the right type of website and win this.
At the end of the day, this was coming and this will keep happening if you don’t have a real business and are too focused on the mercy of a giant company like Amazon.
That’s about it.