If you are aware of the Amazon e-commerce platform, you must also be aware that Amazon lets people sell their products online and make money. However, Amazon also runs an affiliate program which is a way to make people buy from Amazon and in return, Amazon pays them commission as a reward for directing traffic to their site. But Amazon has made a big announcement this morning where they have cut the affiliate rates which is the percentage of commission given to advertisers by more than half.
According to a report, the affiliate rates were anywhere between 0 to 10% earlier but they have now been reduced to 3% for most categories. Now, we don’t know the reason why Amazon has done this and it could be due to COVID-19 situation but it could also be a permanent cut meaning that the new rates are here to stay. It is also said that this feels like a total monopolistic move from the company where they have just slashed income of people earning from affiliate links to less than half.
As for the new rates to come into effect, Amazon says that it will happen from April 21, 2020. While we know that other e-commerce platforms also have their own affiliate programs, most of the people in the US buy from Amazon and it made sense to focus on a single program rather than adding many programs into one. However, this rate cut will force many if not majority to move away from Amazon because the new rates are just not worth the time and effort that gets into building assets. Not only will websites and influencers be affected by this change but platforms such as Rakuten and Honey will also be hurt by this change as their revenues will also decrease to half. We do hope that these rate cuts are temporary and things will get back to normal once the pandemic situation gets better though.