Big news…

Amazon just announced, that it will be lowering affiliate commissions for up to 80%, from April 21st 2020.

Here is a quick overview.

Amazon reduces affiliate commissions

Furniture/Home/Lawn/Pet/Pantry/Headphones/Beauty/Musical/Business categories are cut the most.

For a lot of blog owners, indie hackers, startup founders affiliate commission is one of the main sources of revenue. And Amazon is the affiliate site on the planet.

For those who don’t know, affiliate program allows you to earn a commission for every referred sale. If someone went to Amazon from your blog (there should be a specific link) and bought something there – you earn something. It can be cents on one sale, but if scaled, might become really big.

Here is some reaction from Twitter.


And not only small bloggers and businesses depend on this… FYI, Honey was sold to PayPal for $4B.

Other think, it’s just the beginning and Amazon will abolish the program completely.

 

Why is Amazon doing this?

“Because they can” – nice one.

What could be the alternatives to Amazon affiliate programme?

  • Other global affiliate networks (Clickbank, Awin, etc)
  • Niche affiliate network, specific for each industry (e.g. my travel site has affiliate agreements with GetYourGuide.com, Viator.com, Tiqets.com). Think of Booking.com in your niche.
  • Specific vendors. You can be an affiliate for a specific software or company in your niche. Commissions can be much higher here, plus you can enroll into lead acquisition (see below).
  • Shopify? Thousands of new webstores choose Shopify, it’s growing super fast. At this moment, I’m not aware of one Shopify affiliate portal, which will combine majority of them. But, there are affiliate opportunities for each webstore.
  • Go into Lead Acquisition. You are being paid much more. If your blog deliver high quality leads for e.g. B2B SaaS software, price for one lead can start from $30-50. Imagine if you deliver just 100 leads per month…

 

What are the lessons for future?

  • Never depend on one source of income in your (indie) business.
  • Build your own product, sell from your own website. If there is “another guy” in between product and you, there is always a risk and your earnings will be much less.
  • Grow your email list, don’t depend on third-party platforms. Having subscribers there is great, but you never know about some policy change.