members have received an email today announcing the new referral fee rates for the second quarter of 2006. There are a few significant changes.
The first is a ‘simplified’ structure for link premiums. As you’ll see from the following image the commission earned has increased in each number of items shipped except for 1-20 items when it goes down by 1%.
This covers all products EXCEPT consumer electronics which will now earn a flat 4% fee regardless of units volume.
It also means the loss of the ‘direct link premium’ which was confusing but it was also quite lucrative for some publishers who now how to use it. This means that instead of getting 7.5% commission on CE products if you use direct links to specific products you’ll be getting 4% – quite a hit!
This is disappointing for me as someone who makes most of his money in the Amazon program by referring business to Amazon in the form of gadgets. I understand that the margin on electronics is not high but this will lead to significant downturns in income for some publishers.
I’m not sure that this is really a good move from Amazon – while the percentages are very small they do have an impact, especially when you’re selling products that are worth thousands of dollars. For example I had one sale today that earned me $30 (it was at 7.5% commission from a direct link premium) – if the same sale went through in a few days time it would be almost halved.
My own Amazon earnings are not massive (I stand to loose an estimated $400+ a quarter) but I do know some CE publishers who look carefully at these tiers and work very hard to climb them and I can imagine the feedback Amazon will get as a result of this announcement as a result of their income being slashed.
Update – the Amazon publisher discussion boards are going crazy. The main compaints:
- Not enough notice – on the second last day of the quarter they tell of the changes
- No acknowledgement that the changes will impact some people hard – the email notification presents it as if it was the publishers who asked for the changes. They may have asked for a simpler structure but no one asked for a cut on earnings of up to 50%.
- The only people who seem to benefit from this are those who send untargetted traffic to Amazon. The ones who go to the effort of directly linking to specific products will lose out.
- Amazon has previously promised no more major changes to their commission structure.
- Other CE affiliates offer 5% with 30 day cookies – Amazon is now down to 4% with 1 day cookies – many are suggesting other alternatives and are talking about moving on from Amazon.
To say that there is real anger among Amazon publishers would be an understatement and there are lots of people calling for people to let Amazon know what they think of the changes.
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