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May 27, 2020

How to Gain Affiliate Market Share From Amazon After Rate Cuts

A little over a month ago, it was revealed that Amazon had opened the door for others in the affiliate space, by slashing commission rates for their affiliate partners considerably.

Now that we’ve had some time to further assess the situation, we can adequately advise on how opportunistic brands can take advantage, collaborating with publishers to win over more consumers and to unlock ways to gain revenue and market share in the process.

Oddly enough, advertisers, publishers, and consumers alike can all win from this decrease in presence from Amazon. Replacing Amazon the behemoth with more nimble and competitive alternatives could enhance the affiliate shopping experience. And more products could be sold.

So, let’s find out specifically where those lost commissions will end up in the affiliate economy, and how your brand can be the beneficiary.

We’ll start by asking how we got here, ways everyone can win, what brands can do now to further develop relationships with publishers, what the breakdown of Amazon’s rate cuts actually looks like, and the importance of a consumer-centric approach.

Let’s begin.

What led to Amazon making this decision to lower the percentage of their payouts in the first place?

So, of course, COVID-19 and the stay-at-home order shook up the e-commerce world in general back in mid-March. Arguably, one could say that it expedited a decision Amazon might’ve already been considering at the time.

But it was mid-March, during the beginning of the coronavirus scare that the first domino fell. Around that time, Amazon announced they’d be removing several top affiliates from their program.

On April 14th, Amazon gave 7-day notice to all affiliates that 10 major categories would be reduced to 1%-3% commission. This was the bigger piece of news that directly impacted the affiliate world and provoked commentary like our article.

So, how will this play out?

How this could actually benefit advertisers, publishers, and even consumers

Advertisers clearly are chomping at the bit at the potential benefit from extending their reach to new shoppers as well as capturing larger market share.

Publishers can diversify revenue and drive traffic, filling up on-site inventory in the process.

Consumers will find new brands and products, finding new retailers that may even better suit their needs.

In the end, the go between process of working with Amazon may have actually stifled innovation and optimization of the experience for all three of these groups. With the playing field somewhat leveled, the affiliate economy I spoke of earlier really begins to open up.

Ways brands can work with publishers to drive growth and foster mutual benefit

Give a reason for publishers to switch links to your brand.

Now that it’ll be a bit easier to do so, adjust commission rates so that they’ll be competitive, both with Amazon’s new rates and other brands in the field. Make the buying process seamless and promote things like free shipping and in-house loyalty programs.

That’s what Amazon undeniably nailed, and a similar process will be expected by any publisher looking to replace them.

The opportunity is here to make your case as to why publishers should work with you. Stake your claim and understand that merely being the “cheaper option” won’t be enough.

Get to know your publishers.

Recruitment of new publishers who heavily promoted through Amazon in the past is going to be competitive. Meet these publishers in the middle, promising them a similar but better experience than the one they had with Amazon.

Collaborate directly with publishers for additional exposure.

Use upcoming key shopping periods to catapult demand. Capture market share by investing in publisher partnerships and promoting key products and product categories.

Use your experience in the affiliate space to your advantage. These are brands who’ve grown comfortable with the status quo of Amazon. Show how you can add value, and in the process, do just that!

The new Amazon commission rates, for reference

Here are the new Amazon rates. Again, it’s important to be aware of them in your effort to both beat those rates but also outperform Amazon’s offering:

Amazon New Rates
Category Past New
  • Furniture
  • Home
  • Home Improvement
  • Lawn & Garden
  • Pets Products
  • Pantry
 8% 3%
  • Headphones
  • Beauty
  • Musical Instruments
  • Business & Industrial Supplies
 6% 3%
  • Outdoors, Tools
 5.5% 3%
  • Sports
 4.5% 3%
  • Baby Products
 4.5% 3%
  • Grocery
 5% 1%
  • Health & Personal Care
 4.5% 1%
  • Amazon Fresh
 3% 1%

Keep the consumer top of mind

Always remember that a conversion comes down to whether or not the customer decides they want to buy your product or service. That hasn’t changed. Nail down the delivery of the message you are trying to send and you shouldn’t have a problem.

According to CJ Affiliate, “Publishers are actively executing on new consumer-driven strategies that push advertisers in high demand categories. Publishers are keeping the consumer at the center of their decisions as they drive value through brand awareness, promotions, deeply discounted offers and informative content.”

Consider the ecosystem of affiliate as a more competitive space. You might see more applications from publishers who formerly relied upon Amazon and therefore have little or no performance history. Don’t overlook these potential high-performers!

Focus on the consumer and watch as your brand reaps the benefits of the trickle down effect of the commissions that formerly went to Amazon now going to different advertisers. Be nimble and creative, not greedy.

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In the end, without Amazon looming as large, we might see the game change. Just make sure your brand is one of the winners.

Are you getting started in affiliate marketing or looking to improve your current program?

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