How do the Changes to Amazon’s Affiliate Program Impact Authors?

Amazon’s Affiliate Program

Amazon Associates is touted by Amazon as the web’s most popular and successful affiliate program. And that is probably true. The program is free to join and rewards affiliates (called “associates”) for driving traffic and purchases on Amazon.com. The program has long been one of the most generous affiliate programs on the web, as it pays a commission to affiliates on the entire basket of goods a customer purchases within 24 hours of coming to Amazon.com from the affiliate’s site. Affiliates simply “tag” their Amazon links with a unique code so Amazon can track how much commission is owed to that affiliate. Many large sites auto-generate affiliate links throughout their site, which often results in Amazon affiliate commissions making up a lucrative revenue stream for them.

Changes to the Amazon Associates Program

In late February, Amazon announced that it was making changes to its affiliate program, effective March 1, 2017. Prior to March 1, 2017 Amazon Associates paid affiliates out on a variable standard program fee rate. The variable fee rate paid affiliates a starting commission of 4% and scaled to 8.5% as the affiliate drove more volume to Amazon in any given month. The new fee structure pays different rates based on the category of the item purchased. Apparel, luxury and beauty items pay out at the higher end of the scale at 7%-10% per transaction, however books and kindle devices are stuck at a flat 4% payout rate. Given the new category payments it is likely that this change will negatively impact authors and book bloggers. Authors and book bloggers earn affiliate fees from readers who tend to purchase book and book-related items, and these items now pay out lower commissions.

Authors’ Reaction to the New Fee Structure

We work with thousands of authors and we were curious as to whether they were concerned about this change. Below are the results of a poll we ran in March on this topic:

Of the 195 author respondents:

• Half were enrolled in Amazon’s affiliate program
• The majority of polled authors make less than $25 per month in the program. Only 5% of authors reported making over $100 per month from the program.
• Almost half of authors enrolled in the program were aware that Amazon’s commission structure would change on 3/1/17. The other half had not yet heard about the changes.
• 25% of those who knew about the change, expected to make 10-20% less in affiliate revenue.
• 75% of authors said the change would not impact them.

The Bottom Line

Even before Amazon changed its payout structure to reduce affiliate commission payouts, the vast majority of authors were not making more than $25 from the affiliate program. Given that the income was nominal to begin with, the change will not have a material impact on most authors.

The impact on book bloggers and deal sites is less clear. Sites that survived solely off Amazon affiliate commissions may find themselves earning 20-30% less from the affiliate program. It is likely some sites will decide it’s no longer worth their time and effort to maintain their book-related blog and will shut down. Some sites will look for other ways to earn revenue from their site, including potentially shifting the type of content they cover to push the categories that pay higher rates.

What do you think? Let us know in the comments.