People above were complaining about the amount of profit Amazon keeps for themselves. They complain that they only give 4-7% (assuming they keep the whole rest of the 93-96%)... but they have to pay for marketing, hosting, they actually have to buy the product, even if at wholesale, to sell it from their site. And the 3rd party items, as mentioned above, they probably get an even smaller commission. Some niches will be horrible for Amazon, and other niches, Amazing. Pick the right niche, do the right promotion, and you can make some decent money on Amazon. By the way, I hit the 8.5% tier (the top tier) for the first time this month. It's only because of the holidays, but I think it is quite an achievement.
4 to 7%? I think it's just 4% or so for 99% of the affiliates. Also, the conversions are very poor! Conversion stats are as below for Dec: Clicks: 857 Unique Visitors: 716 Amajon items: 8 3rd party items: 1 Total: 9 Conversion rate: 1.0% TOTAL REFERRAL FEES for 8 items (value $271.39) shipped:$10.86
Actually, I'm a little bit surprised that Amazon still has an affiliate program at all! They're a very well known brand. They are the best known name and trusted in online shopping by far. The other CJ and Linkshare affiliate companies are basically paying for someone else to do their marketing for them. Obviously Amazon has calculated how to pay as little as possible to the affiliate program while just over that line where people would drop them and still make a profit on very low margins. Look at it this way. I can become a third party Amazon seller for about a 15% referral fee for each item sold, where they do everything for me, including fulfillment through their shipping system. If you're a good affiliate making 8%+, that leaves them only 7% of the sale to cover everything from shipping to tracking to warehousing. They're riding razor thin margins and making it work quite well. Breakaway11, congrats on hitting 8.5%! I was 47 items away from 8.25% in December. I think I can hit 8.5% next year though.
origimist..... congrats on getting 8.0%! Sucks you didn't quite make it.... but this past Christmas season was a fantastic one... I am really hoping to do even better next Christmas season.
Yeah, you have to realize that Amazon's profit margin isn't but about 15% on an item anyway, and as someone else pointed out when you pay out 8%, that leaves 7% to receive/stock/pick/pack/ship the item out to a customer. Labor isn't cheap and neither is real estate for warehousing...
Amazon is the second easiest money right after adsense. I'm going to push amazon hard this year. Last holiday season was ok but still far from expected
There's another nice aspect to Amazon, you don't need a website, you are not limited to a certian product, they have a low return rate and they are trusted. You can easily choose a niche, set up a Squidoo page-write an article on Ezine, or GoArticles pointing to it and within a couple of days you should experience good traffic, all for a few hours of work. Do this 20 times, 50 times, 1000 times-you get the picture. -Weisus
Wrong, in fact Amazon loses money every time someone buys via an affiliate link, the margins with tangible everyday goods are extremely low, often below 4% for the merchant, it's a mass business. The only reason they do it for is new customers, that may use Amazon directly the next time they buy.
I think if you can create a good brand for yourself and promote it well..you can make some money. Give customers a reason to use your site instead. Heck when I want a certain product I would much rather buy from a site that is tailored to that type item rather than search through Amazon.. Definately don't complain about the %'s...you basically have to do nothing..and you get paid.. (aside from Marketing etc..)
For most businesses, marketing is the most time consuming work. A website usually offers relevant product links and does pre-sell. If Amazon discontinues affiliate marketing, somebody else will definitely be taking their position. By the way, anybody know how much Amazon sells thru Affiliates, and how much they sell directly? But again, these stats will be a bit misleading because of 24hr cookie. Further, if you look at stats closely, a relevant click is costing (Amazon) approximately 2c (converting sales to cpc), which is much lower than what most CPC programs such as Adwords offer for many competitive words.
By the way, how did anybody get the figure of 15% as profit margin for Amazon? It is usually much more than that, like 25 to 30% (at least for books etc.).
I think most people are going by what they know about retail - margins are pretty small, especially with the considerable discounting Amazon do, and we're talking NET remember. They have to pay the bills, wages etc. It probably boils down to little more than 15% by the time they've paid their affiliates. Books are an exception - there is a higher margin on those, publishers give up to 70% (I've worked in publishing) - probably similar for DVDs and stuff too. But consumer goods... naaa.
Agree with you. Amazon should have a separate fee structure for books/dvd etc. It would encourage more people to effectively promote those products. Additionally, there seems to be a void for no.2 place in books/dvds/music affiliate program. B and N, considered No2 (?), uses Google for affiliate registration. But, this a drawback considering, most sites that use affiliate programs, also use Google Adsense. The affiliate ads compete for Adsense ad space. As a result, it is likely that Google does not effectively promote affiliate program.
Anybody using B and N or Powells for affiliate program? How is the conversion rate compare with that of Amazon?
I think people should stop useless discussions and think of ways to improve your own referral rates. Amazon's not going to change them for you. Only you can change them for yourself, depending on the number of items sold.
I was shocked by my commissions as well. I got into being an Amazon affiliate without really understanding how it worked. I just knew if people purchased from my Astore I'd get paid. I sold quite a few Nintendo DS games and systems, but only made a few bucks. I'm not complaining though because I'm just going to get a gift certificate and buy more stuff from Amazon. LOL
Everybody is a judge in his/her own right. This is a forum! (Unless the moderator wants to assume the charge!) Anybody using B and N or Powell's for affiliate programs?