Amazon slashes commission rates for affiliate program

Amazon slashes commission rates for affiliate program

A worker assembles a box for delivery at the Amazon fulfillment center in Baltimore, Maryland, U.S., April 30, 2019.

Clodagh Kilcoyne | Reuters

Amazon is cutting commission rates for members of its affiliate program.

The company notified members of the program, known as Amazon Associates, that it will slash commission rates beginning April 21, according to an email obtained by CNBC. 

Amazon has for years operated the affiliate program, which allows members to advertise and link to Amazon products in exchange for a percentage of the sales. The program drives significant revenue for online websites who link out to Amazon products in their content. It’s especially important for online publishers like BuzzFeed, The New York Times and Vox Media that publish buying guides that drive readers to buy products from Amazon for a cut of the sales.

Rates are being cut for a number of affiliate product categories. For example, the affiliate cut from purchases of furniture and home improvement products has fallen from 8% to 3%, while the commission rate for grocery products has slid from 5% to 1%, according to a document obtained by CNBC. 

An Amazon spokesperson confirmed to CNBC that the company notified U.S. associates Tuesday of the fee change. The spokesperson declined to comment on whether the decision was a result of the coronavirus pandemic. 

The spokesperson said Amazon regularly evaluates its program offerings to ensure it’s competing with the broader industry and added that such rate evaluations are a standard industry practice. 

Here are the rates for product categories before the change:

And here are the rates after April 21:

Here’s what Amazon is telling members of its affiliate program: 

Hello Associate,

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.

Sincerely,

The Amazon Associates Program

Amazon’s business has been impacted on a number of fronts as a result of the coronavirus outbreak. Hit with a surge of online orders, the company moved to prioritize shipments of essential items in its warehouses, though it has since begun winding down those restrictions. The virus also forced Amazon to temporarily pause its Prime Pantry delivery service, while its Amazon Shipping pilot program will be halted in June.  

Prior to Tuesday’s announcement, Amazon had already made some cuts to its commerce marketing deals. Last month, the company informed digital media firms it would suspend commerce marketing deals, according to The Information. 

One member of the program, who asked to remain anonymous, said they “cannot afford” the fee cuts that were announced, since a main portion of their income comes from commissions earned via Amazon links. The member runs several Facebook groups that advertise shopping deals across the web, including Amazon products. 

“All the affiliates I talk to make the majority of their money from these categories,” the member said. “It’s going to hurt a lot of people.” 

Bloggers and online businesses voiced their frustrations about the cuts on Twitter and Reddit. In a Reddit forum for affiliate marketing, one member of the program wrote: “These slashes are ridiculous. Together with a high chance of upcoming recession, SEO/affiliate outlook is pretty gloomy, to be honest.”

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