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💥☠Amazon U.S. Slashes The Affiliate Fee Rates Starting From April 21, 2020 ☠💥 What Can You Do About It?🤨

Did you guys read the last email from Amazon U.S. about the TOS changes? If you did, I bet you are swearing as much as I do! 🤬🤬🤬

Amazon U.S. has just announced that starting from April 21, they will slash the affiliate commissions for the categories that used to have 3-4.5% and 5-8%:

  • Furniture, Home, Home Improvements, Lawn & Garden, Pets Products, Pantry (from 8% to 3%)
  • Headphones, Beauty, Musical Instruments, Business & Industrial Supplies (from 6% to 3%)
  • Outdoors, Tools (from 5.5% to 3%)
  • Grocery (from 5% to 1%)
  • Sports (from 4.5% to 3%)
  • Baby Products (from 4.5% to 3%)
  • Health & Personal Care (from 4.5% to 1%)
  • Amazon Fresh (from 3% to 1%)

In total, 17 categories are affected 😱

current_fees

But this fee rate cut is quite steep and may reduce your Amazon income by 50-60% 😭

Here are the current fee rates that will be changed on April 21, 2020:

previous_fees_highlighted

The cut affects all the popular niche websites out there; some of them are:

  • Survival niche
  • Pets niche
  • Fitness niche
  • Home improvement and garden niches

It’s not the first time Amazon does that. 

The previous cut happened in May 2019 and back then, “the average rate hits an all-time low of 4.18% across the 57 categories that were mentioned.

This time, the average commission goes down to 3.14%.

Many wonder if this change is temporary only during the pandemic or permanent.

Somebody from niche website forums contacted the Amazon affiliate customer support and it was confirmed that the change is permanent😭

And yes why would Amazon first reduce the fees and then raise it back? They are currently getting so many customers and I bet many have subscribed to Amazon Prime.

Amazon really does not need affiliates anymore 😢

What can you do about it?

👉 If you already have an Amazon website in one of these niches, you can’t do anything about this change. Amazon is in their own right to do what they want with the commission rates that were already quite lucrative.

Multiple ways to go from here:

  1. Expand to Amazon stores in the other countries that still have a high commission fee
  2. Write more info content to boost the traffic and get more revenue from display ads (and switch to a better ad platform)
  3. Switch to non-Amazon affiliate programs (more on this below)
  4. Start selling your own products, either info products or physical goods, and do it off Amazon

On the bright side, this change will probably scare away many competitors and you may have an easier time ranking on Google.

👉 If you do not have an Amazon website then well I would say you should not start one now, at least in the US! 😅 Unless you plan to be in Luxury Beauty, Amazon Coins, Handmade and other categories that did not get affected (for now……..)

Making a website around products sold on Amazon makes less financial sense compared to before. Before it was great and now, it becomes just Ok.

The current fee reduction makes the Amazon Affiliate program similar to the other affiliate programs.

For example, HomeDepot also offers 3% on the majority of the products. And you may even make more money with eBay.

How the industry gets affected

How will it affect the niche website industry?

Obviously, since the Amazon Affiliate income goes down, everything that’s revolving around it will go down

For example, guest post prices and the number of offers, in general, will go down. The tools that were created to work solely with Amazon Affiliate (like AAWP) and affiliates who used to promote them (me🙋‍♀️) will suffer 😭

Also, the prices of Amazon Affiliate websites will drop. I am not sure by how much but I doubt it will be by 2 times. Probably less than that – but the prices will drop.

So here lays an opportunity.

You can buy such a discounted website and spin it in the ways I mentioned above: go with display ads, create an info product, expand to other Amazon stores. 

If you can grow the website traffic and/or see opportunities viable for moving away from Amazon, it might be a good investment!

However, another way how it may affect the industry is that other affiliate programs will follow the trend 😢 Since they won’t need to compete for affiliates as much as they used to, they can reduce the affiliate fees as well.

What do I plan to do?

When the coronavirus started affecting Amazon and the economy in general, I had some thoughts about the fact that Amazon Affiliate revenue started making a big chunk of my income.

As you may know, I have been contemplating the idea of buying a new website for a while.

In March, I came across two opportunities that looked interesting. 

One of the websites was in one of the Amazon affiliate niches and another one was not about Amazon Affiliates. But the second website was almost twice as expensive as the first one.

Guess which one did I choose? 

Right, the non-Amazon one 😅

The sale was finalized about a week ago and I am now a proud owner of one more website that is bigger than all other websites I own.

Today, I am quite happy I did the right choice 👍😅

As of my existing websites, I plan to double-down on info posts to increase the ad revenue and continue moving away from Amazon Affiliates to other affiliate programs.

Making your future online income bulletproof

It‘s a big blow for all of us but we will get over it.

“What does not kill us, makes us stronger” – I believe this saying is very appropriate to be mentioned here and now.

Move more towards diversification.

When your income stream depends on only one single source of revenue, it is a recipe to disaster because it jeopardizes the future of your business.

Here are the steps you can do today to make sure you will still get money tomorrow:

  1. Apply for new affiliate programs; here are a few aggregator platforms where you can do it: 
  1. Increase your display ad revenue by switching to a better ad platform:
  2. Develop your own products, both digital and physical, and sell them to your visitors

BTW, if you are in the home decor niche, Home Depot offers  8% on select home décor products 👇👇👇

homeDepot_affiliate

What do you think guys?

Yeah like it’s not enough of what the world and economy are going through now… A change coming after a change!

So, what do you think guys? How does this new situation affect you? Will your income go down or will it stay the same?

Let’s talk in the comments!


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