Effective March 1, 2017, Amazon is implementing a change to the fee structure used to pay Amazon Associates.
This is a considerable change and likely to have an impact on you. For some, the impact is positive. For others, the change may result in decreased earnings.
Understanding the changes will help you better leverage the program going forward AND make up for any lost earnings.
For Amazon's detail on the change, look here:
(Look quick as those links are likely to change in the next few days!)
First, I
want to say that I'm not as disappointed in this change as I was afraid I might be. There is still considerable opportunity to make money through Amazon's affiliate program. Yay!
One big change is that instead of having two different pay tables - one table that identified fixed percentages for some product categories and a second that covered everything else - there is now only one pay table.
In addition, instead of the commission rate being determined by the volume of sales an affiliate had each month, the rate is determined based on the category in which a product falls.
Previously, you had to sell at least 631 products in order to see a commission rate of 8.00%. Under the new structure, you could get to 8% on your very first sale as long as the item sold falls in the Furniture, Home, Home Improvement, Lawn & Garden, Pets Products, or Pantry departments on Amazon.
For beginners who are likely to see fewer sales per month when starting out, this is great news.
For those who already have sites established in categories that now have a much lower cap of 3% (like Toys), this could result in lower earnings each month.
If you have sites that focus on niches in the lower capped categories, it might be time to find a niche in one of the categories with a higher cap in order to make up any gap in earnings. Or, get ready to ramp up the content on your site in order to draw in more traffic and sales just to close the gap. Even more
work would be necessary to grow your earnings above what you saw last year.
One change that's almost not a change at all is the elimination of the $25 per-sale cap on
personal computing products (like laptops). Since the percentage earned per sale on those products has now been capped at 2.5%, that means that only personal computing products with a price greater than $1000 are really going to see a commission of greater than $25 anyway.
How To Find Product Category Information
To see the categories in which your past sales have fallen, you'll need to log into your Amazon Associate's dashboard, click on the Reports tab and
download your reports. Unzip the downloaded set of reports and go to the Fee-Earnings report. The first column on the report shows the category for each product sold.
To find the kinds of products that fall in each category on the new pay table, go to Amazon, click on Departments in the upper left corner and
browse through the different department categories.
What This Means Going Forward
As an affiliate marketer, you can make use of the new pay table for deciding where to focus your efforts this year for maximum return on your time.
There are lots of high priced products in the categories that have a higher cap (7% and above) and the combination of high price and a high commission percentage are going to result in greater earnings per sale.
If you're looking to build a new site or enter a new niche, finding and promoting those kinds of products is a good use of your time. There are lots of appliances and tools in the Home and Tools category that are perfect for review sites.
For those who don't build review sites but build sites that target a specific niche, target low competition product keywords, and/or use social media (like Pinterest) to drive traffic, focusing on products in the following categories will result in
more sales at a higher commission percentage (7% and above): Apparel, Jewelry, Luggage, Shoes, Handbags & Accessories, Watches, Furniture, Home, Home Improvement, Lawn & Garden, Pets Products, Pantry, Digital Video Games, Luxury Beauty and Amazon Coins.
If you already have a site, look for products in the higher commission categories that are related to your site and consider how to target those products with your existing site.
It's Going to Be Okay!
I know - change can be frustrating but part of running a business is learning how to deal with change. We simply cannot control everything. We can only be mindful of the fact
that things WILL change and we have to be prepared for when that happens.
In this case, Associates still have the opportunity to make very good money per sale since a
percentage commission is used vs a dollar cap per sale.
There are certainly some pluses with this change (not having to make a huge number of sales to high a higher
commission rate, for instance) and while some of us will have to play catch up in order to meet or exceed last year's income, at least we have assets (sites, traffics, and experience) we can tap into to get that done.
Take some time to understand the changes and plan accordingly!
Sincerely,
Erica Stone
erica@extremereviewer.com
