- Amazon is cutting its commissions rate for its affiliate program in a number of product categories, per a report from CNBC, citing an email it obtained that had been sent by Amazon to affiliate members. An Amazon spokesperson also confirmed the change.
- The email was sent to Amazon affiliates on Tuesday, explaining the new rate card and that it goes into effect on April 21.
- Furniture, home, home improvement, lawn and garden, pet products and pantry items are dropping from an 8% commission to a 3% commission, per Folio. Groceries, which currently garner a 5% commission, will drop to 1%. Health and personal care, which currently bring affiliates a 4.5% commission, will drop to 1%.
Amazon's move to cut commissions for its affiliate marketing program is the latest example of how a few large retailers appear to be tightening up an area of digital marketing that is known for significant fraud. While an Amazon spokesperson told CNBC, the changes are being made as part of Amazon's standard business evaluations, the timing of the shift during the coronavirus pandemic— which has significantly impacted retail sales in numerous ways— could help the e-commerce giant make up for losses across some categories.
Some of the biggest cuts to commissions are for categories like groceries that are expected to be a significant growth opportunity for Amazon as consumers change their shopping habits during the health crisis, a shift that is expected to provide a boost to online grocery shopping overall. Grocery sales were up almost 26% in March, in all channels, the largest increase in at least 25 years, per a Digital Commerce 360 report on the Commerce Department's advance monthly figures. This comes as sales have tanked across many other categories seen as non-essential.
The news follows reports that Walmart cut its influencer affiliate programs with social commerce site MagicLinks and e-commerce giant Rakuten. Previously, Amazon’s affiliate marketing program removed third-party vendors Skimlinks, Sovrn and CJ Affiliate. Third-party affiliates can earn a larger percentage of a final sale than simply a commission on a single item.
Publishers are likely to be impacted as large affiliate programs retract since a number have built revenue-generating product recommendation engines over the past few years that benefit from affiliate links, per Folio. Bloggers and others who have built businesses around product recommendations will also take a hit, per CNBC.
Whether or not it is a response to the COVID-19 pandemic, it's clear that Amazon is tightening up its affiliate marketing program in a way that will help it retain a larger portion of referral sales.