Damage Control: How Much Did Amazon’s Commission Rates Change Actually Cost Affiliates?

With Amazon’s huge change March 1, 2017 to their tiered commision fee rates (moving from a volum-based percentage that went up to 8.5% down to a fixed comission rate based on product categories)

Note that I’m only counting commission fees made on SALES and not any Amazon Bounties and Amazon CPC ads, which contributews $1,000 -$2000 more a month for me.

 

September 2016

$7,540 from 64,088 clicks and 4508 orders

October 2016

$9,449 from 73,436clicks and 5046 orders

November 2016

$11,576 from 72,962 clicks and 6180 orders

December 2016

$15,812 from 84,323 clicks and 9233 orders

January 2017

$14,877 from 90,221 clicks and 7325 orders

 

February 2017

I earned $13,008 from 86,851 clicks and 6375 orders

 

March 2017

$10,745 from 96,222 clicks and 7545 orders

Earnings Summary

Let’s sumarize this so it makes some sense.

  • Sep  2016: 64,088 clicks and 4508 orders = $7,540
  • Oct  2016: 73,436 clicks and 5046 orders = $9,449
  • Nov 2016: 72,962 clicks and 6180 orders = $11,576
  • Dec 2016: 84,323 clicks and 9233 orders =$15,812
  • Jan 2017: 90,221 clicks and 7325 orders = $14,877
  • Feb 2017: 86,851 clicks and 6375 orders = $13,008
  • Mar 2017: 96,222 clicks and 7545 orders = $10,745  <— new commission rates in effect

What you’ll see is that I’ve been driving more and more clicks and orders with each month. This is in part because I’ve been adding more content to some of my top sites with more Amazon links. Several of the websites started getting significantly more traffic.

The combination of more content + amazon links and more traffic has resulted in more clicks and orders.

However, last month (March 2017) had THE MOST clicks I’ve ever had, but significantly less earnings. Comparing Jan 2017 (old commission rates) to March 2017, both months had a similar amount of clicks and orders.

  • Jan 2017: 90,221 clicks and 7325 orders = $14,877
  • Mar 2017: 96,222 clicks and 7545 orders = $10,745

$4,132 earned LESS in March than Jan

However, March earned roughly $4000 LESS than January, despite the clicks and orders in a similar range. Jan did have 220 more orders than march but considering both months had over 7000 order, this is not that significant — maybe 500 or so dollars.

So a rough estimate is that January, under the old commission rates made 27% more than March when the new rates kicked in.

Yes, these figures are not exact as March took in a couple hundred more orders, but roughly speaking those months had similar stats.

My conclusion is that the new amazon commission rates have dropped my Amazon earnings by about 25%.

What to Do to Offset Reduced Earnings

So, what do you do to help make up for the loss in earnings?

Depending on your niche, you may be affected more or less by these changes. But without a doubt, you WILL be affected.

Based on what I’ve seen in my own varied portfolio (I have a number of different types of sites spread out in different niches), I think that most affiliates who previously used to earn at least 6% commission rates per month will have take a pay cut. Affiliates who made it to 8.5%, roughly 25%-30%.

To Earn More, Drive more clicks to Amazon

Looking at my own data, the fact that my clicks and orders have been on the steady increases since Sep 2016 has mitigated some of the worse effects. I’ve increased my clicks by about 30% in the 7 months.

However, the fact that I earned $4000 less in March 2017 under the new commission rates (perhaps about $3500 if we knock away the 200 in # of orders difference between the two months) does sting.

How Many Do More Clicks I Need Under the New Commission Rate System to Recover?

Some math to calculate earnings per click

Let’s actually look at how much I earn per click with the new commission vs old.

Note that I am basing this on MY own portfolio of sites and the types of Amazon orders I see from those. The combination of niches that contribute to your monthly total will greatly adjust how much your average earnings per click. Using my own figure (which is based on certain niches) to apply to your own will result in completely inaccurate estimates.

January 2017 Earnings per Amazon Link Click

$14,877 / 90,221 clicks = 14.9 cents per click

March 2017 Earnings per Amazon Link Click

$10,745 / 96,222 clicks = 11.1 cents per click

To make my earnings under the new commission rates equal to that of the old commission rates, based on my March earnings per click, I’ll need to add another 36,036 clicks ($4000 / .111 per click) per month to make an additional $4000 under the new commission rate for my portfolio of niches.

So, I’ll need to increase my clicks by another 30% now.

Here’s how I plan to make up the difference over the next year:

  • Add more links  to existing  content
  • Optimize existing links to increase click rates
  • Optimize existing content to increase click rates
  • Add new affiliate content to existing sites
  • Increase traffic to existing sites
  • Create new affiliate websites

I’m especially working on Adding more links and Optimizing existing content to increase click rates. The reason being is that I don’t need to add new content, just optimize my best pages on my best sites. This will improve click rates and may help me earn more.

I’ve created a post on exactly how to split test amazon post content & links to improve earnings to show you guys how to do this.

I’ve also been really looking hard at trying to improve earnings through Affiliate Offers (i.e. NON amazon affiliate offers). I’ve completely abandoned affiliate offers for years. However, I’ve been really, really looking at how I can start earning money from my existing sites with affiliate offers, and not just Amazon.

This has taken me a couple months of fiddling around joining & testing out different affiliate networks, finding and testing specific affiliate offers, creating new content and optimizing existing content for those offers to work.

I’ve been having some great success so far, having found several affiliates offers that really work for my sites. The challenge is to find an offer that actually converts.

I’ll be writing a complete guide to affiliate marketing (non amazon) this month to share how to do it right, based on my own success (and methods).

Anyways, that’s it for today.

Ben K

 

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