Yes, we were correct! Amazon has changed their commission structure. Here’s the latest one:
I am actually writing this post ahead of time (today is February 17th). There’s a strong chance that this doesn’t happen in near future in which case, I might take down this post. I would recommend you not to freak out immediately. Let’s wait for that moment. Anyway, there is a strong rumor around that Amazon is going to change the commission structure for their affiliates.
It all started from a Warrior Forum thread and quickly went viral. Everyone in almost all community started talking about it. In case if you didn’t know, if you are a big enough affiliate marketer for Amazon, you get a personal affiliate rep. who helps you from time to time in answering your questions. The news actually came from one of them (not my one).
Amazon always had a volume-based payment structure system for their affiliate marketers. If you are an affiliate, you probably know about this. Our Ultimate Amazon Affiliate Guide has pretty much all the details so I won’t be repeating much information. Let’s look at the current structure:
So basically, if you manage to sell up to 6 items from your affiliate links, you get 4% of the total sales as commission and it can go up to 8.5% if you manage to sell 3131+ items. This is a very popular tired system invented by Amazon and later used by a lot of online and offline companies.
Let’s do a math. Let’s say, you sell $100,000 worth of products a month. What will be your commission? The answer is that we don’t know and that has always been the fun with Amazon affiliate marketing. You might sell 300 units to reach to $100,000 or you might also sell 110 units to reach that number depending on what you are trying to sell, right? So the income can vary. Now, Amazon is going to go for a fixed structure where it won’t vary anymore.
The volume based commission always gave people motivation to sell more as clearly, you could earn a lot more in that structure. For example, if you sell 4 items worth $1000 in total, you get $40 right now from Amazon but if you sell 7 items worth $1001, you get up to $60. That was the motivation to sell more and create new websites but it looks like, Amazon doesn’t like their affiliate marketers that much.
In case if you didn’t know, Amazon UK already works like that. They have a fixed rate for different categories of products. Have a look:
So yes, if you are an affiliate marketer then this might affect your earnings big time depending on which category you are working on. The opposite might happen too but in general, it will affect you in a negative way. Being in almost all Amazon Affiliate forums and groups, I can see that people are very disappointed with this rumor!
Having said all these, it is still a rumor (will edit the line once things get finalized). The Amazon Publisher Studio Plugin is currently unreachable as they are doing some improvements and that’s frightening too. Should you be worried about what is going to happen? Probably! Is there a chance that your earnings will drop? Probably! Should you do something about it right now? I don’t think so.
In fact, you actually have nothing to do unless you want to move on to something else. Keep on doing what you are doing. If you have a website with good amount of traffic, you do not have anything to worry about to be honest as there are many options ahead. But yes, if this actually happens then that would be a sad thing for amazon affiliate marketers for sure.
Also, if you are new, I would recommend you avoid that 1% and 3% category just in case.