How Amazon challenges its affiliates

Amazon’s affiliate program has been a popular choice for countless website publishers. However, the program has undergone significant changes in recent years, presenting challenges for affiliates. From declining commission rates to the deprecation of popular ad formats, it’s essential to understand these shifts and adapt accordingly.

In this post, I’ll explore the fundamental changes that have impacted Amazon affiliates and provide practical strategies for navigating these challenges.

How commission reductions are hurting Amazon affiliates

One of the most significant changes to Amazon’s affiliate program has been the steady decline in commission rates. This trend has frustrated affiliates who rely heavily on these commissions for their income.

It’s important to note that in mid-2012, Amazon Associates saw its average commission rate peak at 9.25%. However, by early 2020, this figure had fallen to nearly a third of that, to a mere 3.14%. This harsh reduction has understandably had a considerable impact on the earnings of many affiliates.

In Amazon’s affiliate program, affiliates earn different amounts depending on what customers buy after clicking their affiliate links. There are two types of sales:

• Direct qualified sale happens when a customer clicks your link for a product and buys something from the same category (e.g., you link to a TV, and they buy a TV or another electronic item). These sales usually earn higher commissions, and the commission rate can increase if the total sales in that category exceed a certain amount.
• Indirect qualified sale happens when a customer clicks your link but buys something from a different category (e.g., you link to a TV, but they purchase kitchenware). Indirect sales generally earn a much lower commission, often around 1.5%.

If your affiliate link points to a general search, category, or brand page rather than a specific product, any sales that result will count as indirect, meaning you’ll earn the lower commission rate. Amazon also decides which products belong to which categories, which impacts your earnings.

The slow erosion of Amazon’s commission rates

In April 2017, Amazon transitioned from a variable fee structure that offered up to 8.5% commission on products to a flat-rate model. The shift led to a decline in earnings for many affiliates. Some categories suffered more than others. For instance, the commission rate for the ‘Home Improvement’ category fell from 8% to 5.5%, while the ‘Groceries’ category saw a dramatic drop from 5% to 1%.

In December 2017, Amazon introduced further changes, notably to their bounty programs. The commission rate for Amazon Fresh and Prime Pantry decreased from $5 to $3.

The most striking changes came in April 2020 amidst the challenging circumstances of the COVID-19 pandemic. Amazon implemented significant commission reductions across numerous categories. Categories like the ‘Furniture, Home, Pets Products, and Pantry’ saw their rate drop to just 3%. Similarly, ‘Headphones, Beauty, Musical Instruments, Business & Industrial supplies’ now only offer a commission of 3%.

The consistent reduction in Amazon’s affiliate commission rates has significantly affected affiliates’ earnings over the years. Despite Amazon continuing to thrive and expand, many of its affiliates have not been able to enjoy similar growth. This trend of decreasing commissions and increasingly restrictive program policies pose significant challenges for affiliates whose income relies heavily on Amazon.

How to navigate Amazon’s commission cuts?

When Amazon changes its affiliate compensation, these adjustments are out of your control. As an affiliate partner, you have no choice but to adapt to the new terms. However, you can refine your monetization strategy to offset the income loss caused by reduced commissions.

Start by reassessing the key factors influencing your revenue from Amazon ads: page views, click-through rate (CTR), conversion rate, commission rates, and product price.

For example, if Amazon reduces the commission for a particular product category to half of its former value, they will effectively halve your potential earnings for promoting those products.

To counteract this, focus on improving other variables, such as increasing your page views, CTR, or conversion rate. Additionally, consider promoting higher-priced products or products in a category with better commission rates.

While a drop in commission can be frustrating and directly impact your earnings, you’re not entirely at the mercy of these changes. By optimizing your approach, you can mitigate the effects—or even boost your profits with consistent fine-tuning.

For more specific tips on maximizing your earnings with Amazon Associates, check out this article about how much Amazon affiliates can make. This tutorial provides more strategies to enhance your performance based on these factors.

Deprecation of popular ad formats

In addition to declining commissions, Amazon has also deprecated several popular ad formats, including banners, SiteStripe (with the “Image” and “Text+Image” main features no longer available), and Native Shopping Ads. 

As a result, affiliate partners are now limited to generating text-based affiliate links. If publishers want to integrate product images or price information, they must rely on third-party Amazon plugins or custom-built solutions that integrate with the Amazon API.

The impact of Amazon SiteStripe image ads and their deprecation

Amazon SiteStripe was once a cornerstone of Amazon affiliate marketing. It offered a quick and efficient way to integrate product images and real-time price information. Displayed as a gray bar at the top of every Amazon page, it allowed affiliates to create affiliate links tied to their Associate ID in just a few clicks. Simple yet powerful, it was a go-to tool for many until Amazon cut the major features.

However, as of December 31, 2023, Amazon discontinued SiteStripe image ads, drastically impacting publishers. Affiliates who had relied heavily on SiteStripe now face the challenge of updating their existing content—often involving extensive revisions. The change led to substantial revenue losses for those who depended solely on this ad format.

An ad management plugin such as Advanced Ads can be a significant time-saver in such cases. Centralizing ad management allows affiliates to quickly update or replace ads across multiple pages, making the transition to new image sources or alternative affiliate programs much smoother and more efficient.

The Amazon Native Shopping Ads deprecation

On August 25, 2023, Amazon officially discontinued its Native Shopping Ads. These ads had been a convenient tool for embedding and customizing product lists, especially for publishers who didn’t use paid third-party plugins. They allowed affiliates to showcase products with images, prices, reviews, and more—all smoothly integrated into their content.

The shutdown of this format happened rather quietly. Amazon sent a notification with a deadline, after which the ad codes stopped working. They have also removed all related documentation from the Affiliate Help Center.

This change meant a shift for publishers who had been monetizing their sites with Native Shopping Ads. Now, they either need to replace the ads with simple text links, perhaps embedded in custom product tables, or turn to paid Amazon plugins with API access to restore similar functionality.

Removal of banners and mobile popovers

As if the deprecation of popular ad formats wasn’t enough, Amazon has also removed banner ads and mobile popovers. This change has left the Amazon Associates dashboard looking quite bare, with no visual ad formats available.

Affiliates once had various banner options in standard sizes—such as those promoting Amazon Prime—but these ads are now completely absent. Amazon now only offers text links for all current promotions, leaving a significant gap where vibrant, visual ads once were.

How publishers can handle Amazon’s ad format deprecations

Many publishers have taken immediate action due to the deactivation of numerous ad formats. The change affected ads created in the past, causing them to stop functioning after the deprecation took effect. The most critical constraint is the complete absence of visual ad formats unless you utilize third-party plugins.

Publishers affected by these changes can replace the product ads with text links. This ad format is often underestimated, even though it offers significant advantages compared to other advertising media. For example, its close placement to content usually results in better click-through rates (CTR) and conversions. Text links also show better resilience against ad blockers and perform better regarding banner blindness.

With tools like Advanced Ads, you can target text links to the content or theme of posts and improve their performance. However, you can utilize text links for many more creative and profitable uses, such as product tables or link blocks. In this guide on text links, I dive deeper into the topic and provide concrete suggestions.

If you want to continue working with product images and prices that are updated in real time, you will likely need to use a third-party plugin like Lasso or AAWP. These plugins can still import this data via the Amazon API. 

Such plugins are worth their relatively high price because they have about twice the conversion rate of other advertising media. Advanced Ads smoothly integrates with such plugins, allowing you to precisely align product boxes and tables with your site’s content or different segments of your user base, maximizing your earnings.

Diversification tips for Amazon affiliates

The recent changes in Amazon’s affiliate program have hit those who did not diversify their income sources hardest. Many authority publishers who put all their eggs in Amazon’s basket face long-term sustainability issues with their businesses.

While Amazon is a robust affiliate program, particularly for physical products, it may not be optimal for every niche. Other affiliate programs on the market offer more beneficial terms. These programs may provide higher commission rates and extended cookie durations. For example, while Amazon only keeps cookies for visitor clicks on your affiliate link for 24 hours, other affiliate programs may continue tracking those clicks for up to 90 days.

Diversifying your income sources is crucial to ensure a steady income and mitigate the impact of any single affiliate program’s changes. You might explore and test alternative affiliate programs or consider creating and selling your own products.

Offering services, leveraging display ads, or even securing sponsorships can all be effective ways to create additional revenue streams. Each unique revenue source can provide a financial buffer, protecting your overall earnings from being overly susceptible to fluctuations in any particular source.

Conclusion

The evolution of Amazon’s affiliate program has posed challenges for publishers worldwide, with regular alterations in commission structure and the discontinuation of several ad formats. Yet, such changes are not insurmountable. By adopting a pragmatic approach combining diversification of income sources and continuous ad optimization, affiliates can significantly mitigate these impacts. 

Diversification—exploring other affiliate programs or creating unique products—provides a safety net against fluctuations in any affiliate program. Simultaneously, ongoing ad optimization can drastically increase income from Amazon affiliate marketing, enhancing overall performance. See these changes not as setbacks but as catalysts for innovation and improvement.

Indeed, as you steer your focus toward optimization and diversification, consider leveraging powerful tools like Advanced Ads. This approach can further enhance your strategy, empowering you to persist, thrive, and build a future-proof business despite the spiraling changes in affiliate marketing.

Frequently asked questions about Amazon’s deprecated ad formats