Imagine going from $8,500/month to $5,000/month within days.
This is the possibility that some people are facing with the new (rumored) Amazon affiliate commission structure.
I already wrote a different post about a change that affected deal sites and price tracking sites, but this possible new update looks like it will affect everyone.
In this post you will learn:
- Where these rumors are coming from
- What the changes are
- What proof I have that these rumors are probably true
- How this will affect you
- And what I’m going to do.
Where are these rumors coming from?
What are the changes?
According to the WF thread, Amazon might be fully moving towards a category based instead of a volume based structure.
Most Amazon products are volume based, which means the more total items you sell, the more money you make.
So if you sell 6 items for a total of $1000, you earn $40, but if you sell one more item for a total of $1000.50, you will now earn $60.
This motivated people to sell as many items as possible without caring about their price that much as the goal was to get to the 8.5% commission rate.
The interesting thing is that some products are already category based and for many of them the % that you get is much smaller than 8.5%.
This is great for Amazon, but not so great for most affiliates. In fact, most people I know stay away from the fixed commission products as they know they’ll earn more with volume based products.
However, other countries (for example UK) have a commission system that is entirely category based, which is what Amazon.com might be shifting towards.
My possible proof for the truth of these rumors
I have two reasons for believing that something is happening.
1. The detailed reports section now contains an “Advertising-Fee Rate” section that wasn’t there before.
As you can see on the right, it still shows the volume based % for the volume based categories, but that might change soon. (I’m at 7.5% this month which is why it’s showing 7.5% for Books, Sports & Outdoors, etc…)
The category based percentages are also already embedded as you can see based on the Industrial & Scientific and Electronics categories.
There is no reason to have this new % column unless the percentages are going to change even more.
2. The Amazon Publisher Studio Plugin login is unavailable citing that they are “making some improvements to [their] service.”
While this by itself isn’t necessarily suspicious, I’ve never seen this message pop-up (and I’m a compulsive earnings checker) so the fact that this message has been up for nearly 24 hours means the update that they’re implementing must be big.
How will this affect you?
It depends on where you’re at in your affiliate journey.
If you’re just starting out, you’ll get to enjoy higher earnings right away without having to increase your volume sold, but it will also limit how much you can earn with Amazon as the only way to increase earnings will be to sell more products at the same rate.
If you’re still on the low end of the volume-based chart, you might also experience higher current commissions with lower potential commissions down the road.
If, however, you’re a big fish that gets to the 8.5% tier every month, you will lose out on a lot of money.
It’s not all bad news though! If Amazon does end up implementing this change, less people might start building up Amazon sites, and you might be able to snatch up a couple Amazon affiliate sites at lower prices as people panic sell on Flippa or maybe even EmpireFlippers.
How I’m Going to Act
I’m not going to change anything for now. I’ll just keep building out my current sites with quality content, getting quality links, and hopefully earning more money.
Of course, I will probably be hurt by the lower commissions, but if I build out a couple successful sites, that can outweigh the loss and maybe even benefit me more in the long run because of decreased competition.
This also makes me realize that I need to expand into other areas of earning as if Amazon affiliate shuts down I’ll be left with only $500/month in earnings.
So for me the plan is this: keep expanding and building new Amazon affiliate sites while looking for ways to diversify my income.
What are you going to do?