Big Amazon affiliate commission rate cuts among latest program changes

The Amazon Associates program is set to cut commission rates for furniture and home improvement products from 8% to 3% and for grocery products to just 1%, down from 5%, CNBC first reported Tuesday. Everyday item categories will be especially hard hit, with Grocery, Health & Personal Care and Amazon Fresh to see commission rates whacked down to just 1%.

The product category rate changes areas follows:

• Furniture, Home, Home Improvement, Lawn & Garden, Pets Products and Pantry will go from 8% to 3%.
• Headphones, Beauty, Musical Instruments, Business & Industrial supplies will go from 6% to 3%.
• Outdoors, Tools will be cut from 5.5% to 3%.
• Sports and Baby Products categories will go from 4.5% to 3%.
• Health & Personal Care will be slashed from 5% to 1%.
• Amazon Fresh will be cut from 3% to just 1% as well.

Here’s a look at the current rate structure looks like:

The rate cuts are just one of the recent changes to Amazon’s affiliate programs.

No more middle man. Amazon is taking third-party affiliate networks out of the loop and will only work directly with publishers. Networks such as Skimlinks and Sovrn will no longer be able to get a piece of publishers’ Amazon affiliate commissions, Adexchanger reported last week. Amazon already has direct relationships with thousands of publishers.

COVID-19 pause. High consumer demand has significantly strained Amazon’s fulfillment capabilities. That strain has affected Amazon sellers, many of which have had to pull back advertising on products due to inventory shortages. Amazon also hit pause on direct affiliate programs with publishers such as BuzzFeed and Vox, according to The Information.

Affiliate trends. In the meantime, affiliate campaigns for casual clothing — t-shirts, yoga pants — are outperforming other categories during this time with so many people now working from home, according to data from Keywee, a content distribution platform. Family and home categories follow, driven by pet toys and children’s online safety products.

“All of these [campaigns] have been wrapped in a very positive tone and messaging on the campaign level, with emojis, for example, being far more prevalent compared to other types of paid distribution campaigns,” Inbar Yagur, Keywee’s head of product marketing, said in an email.

Why we care. The cuts could be a blow to publishers, influencers and content creators that rely on Amazon affiliate revenue streams at a time when sponsored content and ad revenue is already drying up. Expect to see campaigns shift to the product categories with higher commission rates.

Amazon has not commented on whether the coronavirus pandemic played a role in informing the new rate structure. The company has begun accepting some non-essential products from FBA sellers to its warehouses again. In March, Amazon temporarily stopped taking non-essential product shipments due to surging demand for household staples and other essential product categories as the coronavirus outbreak worsened in the U.S.