Amazon Commission Updates
Amazon announced yesterday reduced commissions for many product categories effective April 21, 2020. We've heard a lot of concern about these changes, and I want to give you some thoughts on how this affects our industry and online businesses. It hurts anytime commissions and margins are reduced on products we sell! But good business owners are focused on the long-term.
1) The Pie Is Growing! Although we will get a smaller slice of the pie (reduced commissions), the good news is that the pie is getting much larger. Amazon is hiring over 100,000 new workers just to handle the demand. For all but essential products, ship times are increasing as Amazon simply can't keep up with all the orders. This is great! The pandemic is accelerating online commerce like never before. We are seeing growth in almost all sectors. The increased online commerce activity will largely offset the reduced commission rates. Will it hurt at first? Yes. Will your business be even better and bigger in 12 to 18 months from now? Yes (if you stick with it). I'd rather see commission rates drop and the pie grow larger (ecommerce), than the pie getting smaller. This event will weed out the non-serious sites and leave the market stronger for serious entrepreneurs.
2) Amazon's Conversion and Related Product Sales are HUGE – I've got 75 product links on my men's care affiliate site. Yet, I sold over 283 products from my site last month. Amazon gave me commissions for all the other products these visitors purchased — even the ones I don't have an affiliate link for! Amazon is king at conversions — this opportunity can't be missed or overstated. With very little work, Amazon nets us so many other sales. This is hard to beat — especially from speciality affiliate programs you can join. Where Amazon's commission rate may be only 4%, I would likely need some other affiliate program to have commissions double that to match the same conversion rate and revenue that Amazon brings. Doubt me? Do some research — you'll find lots to back this up.
3) 90-Shopping Cart Cookie and 24 Hour Visitor Cookie — Again, you can benefit from related purchases and repeat shopping. Anything the visitor purchases over a 24 hour period, you will get commission! And if they place one of your advertised products in their shopping cart, you'll get commission for those purchases for 90 days.
4) Building a Solid Business — good businesses don't rely on a single supplier. Amazon is the best option to get started with, but you should focus on building a business that is resilient — so you should be looking at multiple monetization opportunities. I would never ignore Amazon — but I would add other options to my site (other affiliate programs, ads, dropship, etc…)
5) Diversification – every business should have diverse income streams. Here are some we encourage:
- Ads – Running ads on your site is a completely passive way to increase your earnings. We have a special relationship with Ezoic and can get you setup and going FAST (even if you don't meet the minimum traffic requirements). Contact me for details.
- More Affiliate Programs! There are many affiliate programs available — some offering higher commissions. We can help you research, setup, and update your site to begin working with other affiliate programs. Contact me for details on how we can help.
- Dropship / Ecommerce Shop — want 50% commissions or more? Create a shop and sell products directly from your content site. We offer a turn-key package to add a shop to your existing site – complete with product research, manufacturer recommendations, product setup, shopping cart configuration, and more! Contact me for details.
Keep developing great content, be smart about diversification, and don't stop working at it! Those who work hard today will be reaping the benefits in the months and years ahead. Amazon is going to continue to be a huge money-making opportunity for all of us who stick with it.