Anyone that dabbles in affiliate marketing is likely aware of the incoming Amazon exodus. The online retailer will be cutting affiliate earnings across a variety of product categories by almost half. Furniture and home improvement products, for example, will drop from 8% to an all-time low of 3%. Grocery products, on the other hand, have dropped from 5% to nearly-unsustainable 1%.
What it means is that affiliate earnings, at least through Amazon, are going to be a lot less lucrative going forward.
Undoubtedly, many are scrambling to make up the difference, especially for teams that focus onthe product categories and departments that are taking the biggest hit. The looming question is whether or not using Amazon as a source of affiliate income is worth the hassle anymore? Most importantly, what can marketers do to ensure sales and income earnings remain sustainable?
1. Vet the Product Categories
To start, it’s necessary to review content portals to understand just how much these changes will impact revenue. For marketers that don’t feature grocery-related content, it’s not going to matter much that the said product category is seeing such a huge rate drop. That said because Amazon is making such sweeping changes across the board everyone must assess the general impact.
For those that plan to continue using Amazon as an affiliate source going forward, it makes sense to research and consider the product categories that will offer the most earnings. The focus should also be taken away from the categories that aren’t lucrative anymore. While this move may seem rather obvious, the takeaway is that affiliate sites and content should be adapted to allow for the changing focus. Those focusing exclusively on furniture, for instance, are going to want to incorporate other departments like home goods or electronics.
2. Add New Affiliate Programs
Unfortunately, the current state of affiliate marketing means that to make a reliable and decent revenue, efforts should be balanced across multiple programs. Hopefully, Amazon isn’t your only source of affiliate income. If it is, then you need to start adding additional sources, like now.
Branch out and find either new or higher-value programs, or look for potential candidates that allow you to still use Amazon yet with decent rates. Just bear in mind that everyone is taking the hit from Amazon’s changes and that’s going to have sweeping implications for the entire market.
3. Lock-In Direct Sales
Affiliate marketing and dropshipping campaigns are a lot less stressful and hassle-free, but the profit margins are also much lower. Now is the perfect time to strike up a partnership with potential distributors. The goal is to sell products directly, the old fashioned way. Of course, it will take a lot more planning as you’ll need to secure storage, product shipments, and take care of the consumer-facing interactions— like shipping and order fulfillment.
It’s best to seek professional help and guidance if this is the route you decide to take. However, success — and profits — will be much more rewarding in the long run.
4. Diversify Revenue
In addition to subscribing to multiple affiliate programs, it’s now more important than ever to diversify revenue streams overall. Selling products directly, adding new service or sales opportunities, and branching out altogether are some excellent responses.
For instance, text and traditional content-heavy sites may transition to video and mixed media platforms— generating extra revenue from video ads. Other portals might consider selling local advertising space. Much like YouTubers do these days, some might even consider signing on sponsors and partners for added funds. The subscription model is also a solid alternative, especially for sites with exclusive content.
The point is, move away from using Amazon as the only source of income if you haven’t already.
With the right moves, the Amazon affiliate cuts don’t have to decimate your business model.