Amazon Associates Decreases Referral Fee Rates in Certain Product Categories, Drops Tier System

The new changes to the Amazon Associates Program Operating Agreement has been effective since March 1, 2017

Frankly speaking, after when logged to my associates account today I felt horrified after seeing new changes in referral fees, though after some calculations and speculations, I still feel very good about Amazon Associates program, despite I will lose, most probably, about 25% income in close future from this affiliate program.

About a week ago I received an e-mail from Amazon Associates, informing that:

We are writing to notify you of some changes to the Amazon Associates Program effective March 1, 2017. Changes include, but are not limited to: promotional rate changes, revisions to program policies, and updates to the Fee Statement. For more information about the Fee Statement changes..

We have revised the Fixed Standard Program Fee Rates (see below), removed the Variable Standard Program Fee Rates and removed caps on PC earnings.

See what's changed

Amazon Associates rates table

My story

I've been an Amazon Associate since the Summer of 2014, since then Amazon Associates program have been my top performing and most lucrative revenue stream, in some months generating even more than 95% from total income. Last month, thanks to the activities in other affiliate marketing programs I managed to decrease Amazon Associates role in my revenue portfolio to about 89%. Yes, that's good is was Amazon Associates program.

How to apply for Amazon Affiliate program

Back in 2014 I didn't know much about affiliate marketing and commission structures, I started my Amazon affiliate journey as an experiment, instead of focusing on commission rates, I focused on getting actual traffic there and as more blog's traffic grew, more I get in commissions months after month.

Setting My First Amazon Affiliate Marketing Goal

Just later I learnt that there are some exceptions, like in computers category with a referral fee rate set at fixed 4%, there was a cap of maximum $25 per device. I wanted to promote wine, and again I learnt there is a flat 0 commission for wine or any other alcoholic beverages, see: No Referral Fees for Wine and other Alcoholic Beverages for Amazon Associates

There was a nice tier system (for which I actually didn't paid much attention), by increasing shipped items, commission structure could rise to 8.5%. As I was more into electronics category with fixed flat 4% rate, I didn't paid much attention to other items, they were a lot of course, and most months I finished with a 7-7.50% commission tier.

Now that's changed - seems tier system has been dropped completely, instead a fixed flat rate is provided (see table above), unfortunately rate for computers category has decreased from 4% to 2.5%, though a cap of 25 USD has been eliminated. 

What does it means and how does it affects associates?

Until March 1st, 2017 to get a 25 USD referral fee from computers category, it was enough to sell a device worth of USD 620. Now to get a USD 25  commission fee, you should sell a device worth of USD 1,000. On the other hand if you can sell a laptop or PC worth more than USD 1,000,  let's say USD 1,400 you would get a total commission of USD 35, as a cap of USD 25 have been eliminated. 

Of course, selling more expensive items might be much harder as to sell lower priced items. But yes, there is still a room to grow.

Speaking of me and my experience with computers category, my yearly rate for 2016 was about 3.6%, meaning there were a lot of devices already failing into USD 25 cap.

Generally speaking, I still feel I will experience about a 25% drop in earnings from Amazon Associates program, for me it means a couple of hundred of dollars, larger affiliates probably will see a decrease even in thousands. I hear you, it feels unfair, though I'm still looking on Amazon Associates program as one of the most lucrative affiliate program out there.

On the other hand I have started to diversify my online income revenue streams, trying to keep Amazon afloat but decreasing it's overall share in portfolio. I keep using Google AdSense, Booking affiliate, Bluehost and recently I have started to offer my own services, also I've started to invest in peer to peer lending. Just to keep a healthy revenue income stream.