Note: This blog is based on a presentation our CEO / co-founder Jesse Lakes gave at Affiliate Summit West 2020 and a recent YouTube video with the same name.
For most creators, bloggers and affiliate marketers, Amazon’s affiliate program is the central, de-facto, affiliate program for earning commissions.
Yes, that’s a bold statement but I think it’s been earned. For over 20 years Amazon has offered an easy to learn, easy to use, and high converting affiliate program that covers a massive product catalog.
And yet, in the last few years these same creators, bloggers and affiliate marketers have been seeing their revenues drop, accounts closed and seem to be changing their perception of Amazon’s affiliate program from love to fear.
We’ve seen some things lately that have got us questioning if Amazon is, and will continue to be, the de-facto affiliate program for many so today’s blog is going to explore why I think we may be reaching a turning point and how you might position yourself to take advantage of any changing tides.
To explore the possibility of “peak Amazon Associates” I’m going to break our exploration into two parts:
First, a quick run-through of what some online tools and our own investigations are showing. This includes Google Trends, BuiltWith, Amazon Associates Central, PubliceWWW, W3Techs, and SimilarWeb.
Second, we’ll explore some of the things our clients are seeing firsthand. This includes the high-level pros and cons of Amazon, an exploration of Amazon’s commission rates, and finally a discussion around Amazon compliance.
Finally, we’ll share a strategy we are seeing some of the top affiliate publishers doing and that we’ve been exploring too with some proof that it works.
I’m guessing you are familiar with Google Trends, the tool that takes the popularity of search terms across Google and lays them out on a relative basis, over time.
Taking a look, we find the term “Amazon affiliate” is the more popular term starting in late 2016, compared to the proper name of the affiliate program “Amazon Associates.”
But we also see that for the term “Amazon affiliate” peaked in late 2017, and again in late 2018, and currently, we are at about 80% of those peaks.
For the term “Amazon Associates” the peaks were mid-2011 and mid-2017 but today we aren’t too far off from that peak.
Changing the view, by switching from the US to global and tightening the time frame to the past 5 years, again hints at a similar trend – a couple of earlier peaks but today’s trend not too far away from the top.
Now, before you close this tab and get back to the cat videos, I’ll be the first to admit this isn’t crystal clear evidence that Amazon’s days are over, but bear with me.
But once we add in the term “affiliate marketing” a few things start to come into focus.
We see that from mid-2015 until the fall of 2016 that “amazon affiliate” was slightly less popular than “affiliate marketing.”
But then from late 2016, through 2017, and into early 2018, the two lines overlap consistently and “Amazon affiliate” was actually MORE popular at times than “affiliate marketing”. By comparison, I might call this “peak Amazon affiliate.”
However, from mid-2018 forward we see the lines steadily diverge and today we are just off from the peak of “Affiliate Marketing”, while “Amazon affiliate” hasn’t grown and is at about 60%.
Clear as mud, right? Well, Let’s try looking at the popularity of the Amazon Associates program with another tool.
BuiltWith + Amazon Associates Central
Builtwith is a really cool tool that I’d encourage you to take a look at if you aren’t familiar with it. The gist is that they crawl the internet and are able to deduce what tools, services, and technologies are used for a particular website.
They can also turn that information on its head and tell you how many sites are using a specific type of tool, service or technology.
Thankfully, they break out Amazon Associates.
Looking at the graph BuiltWith provides us for all of the sites they’ve indexed we see Amazon Associates’ adoption peaked in 2011, 2012 and 2013.
After that, there seems to have been a pretty massive withdrawal, bottoming out in late 2015.
More recently a smaller peak is apparent but the line ends with a drop and plateau. Today’s count appears to currently be at about 260K sites, compared to the recent peak of 300K, and historic peaks of 350K sites.
If we filter this down to just the high traffic sites we see a very different story.
It appears that Amazon’s affiliate program has been growing fairly consistently but really picked up steam over the last few years in those middle tiers of high traffic sites.
However, it also appears that starting in about mid-2018 adoption plateaued and over the last 5 to 6 months it has started dropping off significantly.
Changing Size of Amazon Associates?
A couple of years ago we tried to quantify the size of the Amazon affiliate program and looked at a few additional tools to measure it. We wanted to see how things had changed over the last couple of years and went back to this blog to compare results with the same tools.
In the last few years, we’ve seen evidence of growth directly from Amazon and its affiliate program.
They’ve increased the number of their storefront specific affiliate programs from 12 to 16. Since we initially published the blog, Amazon has rolled out affiliate programs for Amazon.sg (Singapore), Amazon.ae (United Arab Emirates), Amazon.com.au (Australia), and a private affiliate program for Amazon.com.tr (Turkey).
We’ve also seen on job applications for the Associate’s program, that the number of publishers is in the “millions” with an “s”.
PublicWWW and W3Techs
However, looking at two more tools, similar to BuiltWith and Google Trends, we are seeing more evidence that peak Amazon may be behind us.
PublicWWW, a tool that lets you search for code, not text, from websites, shows the number of sites that include the signature of using the Amazon Associates program to have nearly halved in the two years since we first researched this.
In late 2017 our analysis came up with 148K websites where our more recent research, in late 2019, had this total down to 82K.
We defined the “signature” for hundreds of different affiliate programs in another project that we wrote about in the blog post: We Studied the Size of the Affiliate Landscape – It’s Bigger Than We Expected.
W3Techs, another tool like BuiltWith, has it’s reported coverage of Amazon Associates also halved — 5.2% of tracked websites in late 2017 (source), down to 2.6% of tracked sites in late 2019 (source).
Finally, let’s look at SimilarWeb, one of the most popular web indexing tools.
If we look specifically at Amazon.com and its referral traffic, the category where an affiliate would be classified, we also see a significant drop. In Dec 2017 we reported in our blog about quantifying the Amazon Associates program that referrals accounted for 22% of Amazon.com’s traffic. In December of 2019, when we were doing this research, SimilarWeb had their referral traffic at 6.3% (source).
That’s a lot of different perspectives and data points, let’s see if we can organize them a bit more to get a sense of a bigger trend…
- “Amazon Affiliate” is the more popular term compared to “Amazon Associates” but isn’t as popular as a search term as it once was.
- While once essentially on par, the term “Affiliate Marketing” is now much more popular than “Amazon Affiliate.”
- From BuiltWith, we see there has been a resurgence in general usage of Amazon’s affiliate program in the last few years, but it’s not as high as it was near the beginning of the decade.
- When we zero in on top traffic sites with BuiltWith we saw strong growth, then a plateau, and most recently a fairly significant drop.
- From PublicWWW and W3Techs we see a drop in Amazon Associates usage near 50% over the last couple of years.
- From SimilarWeb we saw a 4X decline in referral traffic to Amazon from late 2017 to late 2019.
- However, we continue to see Amazon launching storefronts in new countries and rolling out their affiliate program to support these new local storefronts.
I think it’s fair to say we are seeing mixed signals that could be interpreted in multiple ways.
Amazon Associates Central: Good & Bad
So let’s shift gears and look at Amazon’s affiliate program through the perspective and experiences of our clients.
I admit I love the Amazon Associates program. It’s not my only love but as far as affiliate programs go, but the Amazon affiliate program has a ton going for it.
It’s a massive affiliate program (source) for an even bigger retailer. In fact, eMarketer has Amazon pegged at a little over one-third of the US market share. For comparison, Walmart is approximately 4% to 5% (source).
Also, the conversion rates are solid, likely because of the massive product catalog size that Amazon has.
And, this is often related to lots of “halo” commissions – the earnings you get from products your shoppers bought that aren’t directly related to the product you recommended — you know like when you are recommending TVs and you get a commission for toilet paper or a toaster.
Amazon also has a quickly growing international footprint with new regional storefronts and storefront specific affiliate programs springing up fairly regularly.
Last, but definitely not least, shoppers trust Amazon. Period. A recent report puts Amazon at the number one most trusted brand.
Ultimately, I think it’s very fair to say that it’s a very dynamic affiliate ecosystem and has made a lot of people a lot of money.
But it’s not all rainbows and unicorns.
In fact, over the last few years, we’ve been noticing an increase in complaints and concerns over Amazon’s affiliate program. They seem to revolve on these four areas but mostly focus on commissions and compliance.
So let’s take a closer look.
“I feel like a frog that is slowly being boiled alive, so I don’t jump out.”
I read this quote on Facebook in the spring of 2019, shortly after Amazon.com had announced another fairly major update to their commission rates. To really make sense of the quote, I think it makes sense to see how commission rates have changed over the last decade.
For most of the last decade, the Associate’s program was paid out a commission-based primarily on how many product sales you directly responsible for referring. Everyone started at 4% but if you drove a little over 3K products you could earn over double that rate (there were a select few categories this did not apply to).
Then in early April 2017 Amazon eliminated the beloved volume-based commission rate in favor of a fixed-fee model.
This change severely impacted the earnings for the bulk of our clients. In fact from our research the only product categories that saw an increase in commissions were for Grocery Products and Handmade products.
However, of those 54 categories that Amazon’s affiliate program now recognizes, and pays a specific commission for, 19 have decreased. Further, most categories had their rates reduced by 50 to 60%.
End of the “Halo” commissions?
Another new source of concern for Associates is a major change in commission rates we saw rolled out in Europe in the spring of 2019, which uses the concept of Direct and Indirect Qualifying Purchases.
The gist is that if your referral results in a sale of the product in the category you are recommending you can earn a healthy commission rate and that rate could even increase based on the volume. That’s awesome, thanks Amazon Associates!
What’s not so great is that if someone buys a product that is not in the category of products you recommended or if you used a search results based link to get them into the Amazon store, then your commission rate is in the 1% range, significantly lower than the average commission rate of 4.6%.
Again, this Qualifying Purchase model for commission rates is currently limited to the five affiliate programs in Europe but if you dig deep into the downloadable reports in the Amazon.com Associates Central you’ll see an “Indirect Sales” column has been added and each line item includes a “di” or “ndi” which may imply it’s only a matter of time before we see this model implemented in the US program.
If we are reading these tea leaves correctly, and this model is introduced into the Amazon.com Associates Program, then the era of great conversion rates, due to those “halo” commissions, might be coming to an end.
Taking a quick step back, decreasing commission rates shouldn’t be a surprise to us, affiliate publishers. We all know that Amazon is a business, a publicly-traded business, and its fiduciary responsibility is to its shareholders. Ultimately, those shareholders demand that Amazon needs to make a return on their investment. We’ve seen that Amazon is brilliant in its efficiency and from their perspective if they can cut commission rates with little to no forecasted downside then why wouldn’t they? Sorry affiliate publishers, its just business…
Another source of concern that has grown over the last few years is around compliance with the affiliate program’s Operating Agreement.
While every Amazon affiliate publisher should take the time to read and understand the Operating Agreement and the accompanying Policies page to really learn the rules of the Amazon affiliate game so few do. That’s on 100% on us, the affiliate publishers.
But unfortunately, some percentage of us don’t take the time to read and understand the rules, plus some small percentage of bad actors out there, seem to have pushed Amazon to a point where their judgments now appear to be swift and harsh for those that violate the rules, even when done so inevitably.
This brings us to the two challenges Associates now face.
The first is around the confusion.
The Operating Agreement is lengthy, hard to read, and challenging to understand so many publishers just copy what they see being done by their peers or just put their heads in the sand instead of putting the time and resources into understanding. This often leads to an echo chamber of misinformation that can result in inadvertent bad practices.
The second is around the process.
Likely due to the massive size of the Associate’s program, remember, we’ve recently heard them publish that there are millions of publishers, it seems there are parts of the review and compliance process that aren’t perfectly refined nor is the messaging crystal clear.
As a result, when a publisher is found to be violating a rule they get a note, with a tight timeline, that is often hard to understand.
It’s an incredibly stressful situation to know that you need to fix something, but you don’t know what, within a short time period, or lose out on your last two months of commissions and possibly your sole source of revenue for your site.
But again, let’s take a step back to put this into perspective. Amazon, because of its success among other factors, seems to regularly be under a microscope from various regulatory committees, including the FTC. As a result, when you, the affiliate publisher, make a mistake in your compliance it’s ultimately Amazon that can get in trouble. I don’t think you can really blame them for being aggressive in their review of their affiliate publishers.
Putting It All Together
I really encourage you to take some time to interpret the items I’ve shared above, and gauge for yourself where you think Amazon’s affiliate program is going and how you should be prepared.
Ultimately, my takeaway from all of this is that Amazon, and their affiliate program, are here to stay.
But I also firmly believe the practice of relying solely on Amazon’s affiliate program is akin to putting all of your eggs in one basket — while it can be efficient it can be very risky.
I also believe that a lot of those same bloggers, creators, and affiliates I first mentioned might not be seeing the bigger picture.
Amazon is so big, especially in the US, that it’s easy to overestimate how many people shop there. But that was recently quantified for us — 38% US ecommerce market share.
And when we focus our affiliate marketing on Amazon alone, we may be ignoring a significant shopping segment — the other 62% of the US ecommerce market!
My recommendation is NOT to abandon Amazon, but rather focus on providing multiple options to your consumers on where to buy.
Adopting a multi-retailer strategy.
We see multiple benefits from this approach including diversification of your revenue streams to avoid a single point of failure as well as a better buying experience for the consumer.
And, it seems we aren’t alone in this thinking.
A quick look at a few of the largest affiliate publishers in the product review space shows a common theme. Their product reviews often start with Amazon affiliate link and buy button, but are then followed with multiple other buy buttons from other top retailers with affiliate programs.
At Geniuslink we’ve been following a similar approach with the rollout of our Choice Pages, an easy to build mobile-optimized landing page used to promote a single product but with multiple retailers.
While we initially built this tool for our clients in the book and music space we had some YouTubers that review camera gear latch onto these in the early days.
Armando Ferriera, the man behind the popular YouTube channel Mondo Bytes, was an early adopter and after using the multi-retailer strategy for his product recommendations, via Choice Pages, he saw his Amazon commissions increase over 160% and he became a top affiliate for B&H Photo Video, a top retailer for the gear that Armando regularly reviews.
Read more about Armando’s case study here: How One Client Doubled His Commissions by Giving Consumers a Choice
And Armando isn’t alone!
I wanted to leave a few questions for any of you out there that are affiliate publishers, bloggers, creators, etc. and regularly use, and maybe even solely rely on Amazon’s affiliate program. I really encourage you to take a few minutes and honestly answer these:
What percentage of your revenue is from Amazon?
How much does this hurt if it disappeared overnight?
What have you done to diversify your revenue?
Thanks for taking the time to read this blog, I hope it provided some insights into Amazon’s affiliate program, where it might be going and how you should best prepare to maximize your upside and minimize your risks.
We look forward to your feedback and thoughts in the comments below.