Update 23 Feb: The rumored changes have 
been implimented. Amazon has moved 
to a fixed rate by category system and 
removed the variable volume pricing:
New Amazon Associate Rate Card Effective 1 March
We will post an analysis and ways to 
maximize this new plan shortly.

L

ooks like big changes may be coming for Amazon Affiliates commission structure. There are rumors afoot that Amazon is planning to completely restructure their US affiliate program.¬†Currently, Amazon Associates are paid a sliding percentage on all sales, based on the number of monthly transactions. There were a few category based product types, but for the most part, all products paid the same commission based on that month’s sales volume. However, the UK Amazon operation currently structures commissions on exclusively a departmental level. There is no sliding scale for the¬†volume of transactions like in the US. There are reasons to believe that Amazon will be moving the US affiliates to the UK styled departmental commission structure. Look at your current commission statement some are already seeing new departmental categories. Though still unconfirmed such a dramatic change will surely create winners and losers in the huge footprint of Amazon’s affiliates.

Amazon US vs. UK Affiliate Rates

To get an idea of potential changes, let’s look at the Amazon UK model and overlay it with the US model. Amazon.UK Associates receive from 1% to 10% of sales based on the product category of the sold item. Sell 1 or 100, you receive the same percentage.

ukazon

At the US Amazon.com, affiliates are paid on a sliding scale based on item quantity. Sell 3131 or more items and all your commissions are at 8.5%, sell fewer than 6 and your rate is 4%.

usazon

There are some specific categories that have flat rates now.

uscat

Winners & Losers

What would the impact be of adopting the UK commission schedule to pay US affiliates? Being a glass half-full kinda guy, let’s start with the good news. If you are just starting out, getting the full category rate will earn you more than the 4%-6% rate many stay stuck at for a while. Getting 7%-10% for early sales is nice! Other affiliates that would appear to come out ahead are those that are in one of the 10% niche categories. The maximum rate in the past was 8.5% and that required over 3131 transactions (who came up with that number!) per month. Even many of the 7% category sellers, who weren’t getting into the higher rates in the existing sliding schedule, should see larger commission checks. The biggest losers look to be the¬† larger successful affiliates who get to the 8.5% level already every month. Now there blended rate after applying all of the category rates will likely be less than 8.5%. If you go from 8.5% to say 6.8%, that would be a substantial 20% reduction.

The Amazon Associate program will go on and continue to grow and flourish. In fact for new affiliates there are some advantages. Existing affiliates may want to focus more on the 7% and 10% category niches.  This would also be a great time to diversify your affiliate relationships. Look for direct relationships and other marketplaces to spread your risk. For me these changes would reinforce two thoughts: 1) Amazon is still a must have in your affiliate team and 2) diversify your affiliate partners.