Amazon announces record profits, cuts commissions at the same time

Last Update: April 26, 2019

Today Amazon announced record sales of $59.6 billion, "blowing away" all expectations. They made a fortune!

https://ir.aboutamazon.com/news-releases/news-release-details/amazoncom-announces-first-quarter-sales-17-597-billion

They also announced plans to further cut affiliate commissions, because they can. Guess they didn't want to share with people who helped them earn it.

One smart publisher commented "I feel like a frog that's slowly being boiled so I don't jump out." She nailed it.

Do you really want to build your whole affiliate future on Amazon? Work with other advertisers while you still can. I can literally give you a dozen reasons why working with Amazon is a bad idea, not to mention that great article on WA -

https://my.wealthyaffiliate.com/newmarketpro/blog/25-reasons-to-get-banned-from-amazons-affiliate-program

Think carefully before you focus all your work around a single source!

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YanFellow Premium
Absolutely true, Jeannine.

The trouble is, if we're not careful, so much of our business ends up depending one a handful of companies like Google, YouTube, Amazon, eBay, Fabevook, Pinterest, etc. They do what they like and feel absolutekly NO responsibility to individual marketers, and give no explanations on an individual basis.

This is why is it sooooo essential NOT to put all your eggs in one basket. Don't rely on G for traffic, don't rely on any one social media site, and don't rely on any one affiliate company.

Ian
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JeannineC Premium
Very well said, Ian. I've seem many publishers do that - rely on a single merchant (often not Amazon). When/if they close or change their commission structure, those guys are in hot water.

Diversify!
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NWTDennis Premium
I wonder if this has something to do with their newly announced plan to start hiring their own fleet of full-time drivers to deliver packages to Prime customers. They plan to manage these drivers directly, meaning they will set their wages, provide them delivery vehicles, and schedule their routes.

They have committed to an initial purchase of 20,000 Mercedes-Benz Sprinter vans which will cost more than $70 million, and this is just the beginning. Could be Amazon's version of robbing Peter to pay Paul.

Just saying.
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JeannineC Premium
They took in $59 BILLION during Q1. $70 million is chump change to them. Naw, this is pure greed.
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HoneyBadger9 Premium
Great info thank you. They need to be taught a lesson, kinda wish there was a way to get everyone to stop all purchases to there site for a day or two just to let them know that it's us that made them who they are. And it's also us who can give that power to someone more worthy of it. Value is the most important thing, but I guess greed clouds them common sense thoughts. Fantastic message, thank you so much for this very important information. 😀😀
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JeannineC Premium
What they did learn is that two years ago when they made huge cuts in commissions, not that many publishers quit, and they were quickly replaced. They learned that they could treat their affiliates like punching bags, so they just sucker punched them again.
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SondraM Premium
Wow, I noticed the big decrease in affiliate commissions that were part of this change. Yet, I didn't have time to try research any of the behind the scenes stuff.

Record profits combined with cutting some commissions from 10% to 4% and others from 7% to 4%; leaves me a bit shocked.

I wonder if they are going to charge sellers less fees since they won't be paying out the higher commissions? That would be one way they are trying to attract more sellers.

Yet, I am not sure that is the answer since they also reduced commissions on their line of clothing also.....

Amazon is getting too big and powerful in my opinion.
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HoneyBadger9 Premium
I agree completely, there almost a monopoly in many aspects. When they announced the pill pack, Walgreens, CVS, and rite aid shot down about 1 billion dollars in the stock market...all from a single statement about it.
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JeannineC Premium
Sellers are still willing to pay those fees to get on to Amazon, so I don't expect them to be cut. Nope. Just more money in the Amazon coffers.
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SondraM Premium
I had not heard about the pill pack issue. Hopefully the others will recoup the losses in time.
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Dedo52 Premium
There are certain principles in business that would be in everybody's self-interest to learn.
One of them being "the law of supply and demand"
Amazon is a business, not a charity and the affiliates should be fully aware of these alterations before time.

Cordially
Dedo

P.S Hope this helps : )
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JeannineC Premium
Couldn't agree with you more! As long as Amazon affiliates are willing to put up with these commission cuts, Amazon will keep doing it. Other merchants know to be competitive they must offer better conditions - longer cookies, higher commissions. All their sites convert too! Amazon has just lulled everyone into thinking they are the be all, end all. They are not. Last year we processed well over a billion dollars in revenue sold via affiliate marketing and not one cent came from Amazon. There's a whole other world out there, folks!
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MikaelM Premium
incredible they keep cutting commissions - they are becoming too greedy. The program is not that great for affiliates as it is because of the short cookie time and already low commissions.

But guess that when you are big enough you can do what you want - too many affiliates are too invested in Amazon now and cannot just change so they can keep cutting and people will keep being affiliates for them.
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JeannineC Premium
Yup, they are big enough to do what they want, but an affiliate can change at any time. Imagine spending 15 minutes a day swapping Amazon links to another merchant - you'll get it done, even if it takes a while. You aren't trapped. You just have to make the decision that you are worth far more than Amazon is willing to pay you.
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HoneyBadger9 Premium
Agreed :-). Hopefully that greed bites them in the butt. On the positive side of it, now there is more room for the Little buisness owners to swoop in and undercut them and gain all of the more efficient, financially educated buyers they will lose who realize the value and dedication of these smaller businesses...David will always beat Goliath :-)
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JeannineC Premium
Each publisher needs to make their own decisions about who they want to work with, but there are lots of other things about Amazon that are bad, like no cross device tracking, which is worth a fortune to publishers in commissions. So many ways they treat their affiliates badly....
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Wdcope Premium
I mentioned this on another post, that if more affiliates would not have all their eggs in the Amazon basket, then it could get noticed. Try eBay, or Target, or any other good affiliate you see on the various networks. Many pay 7-15%, so why do we thow all in with Amazon? I certainly will not. Other great niche companies who would love the sales, and enjoy the traffic we can give to them. That my 2 cents! :)
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JeannineC Premium
I'd say your 2 cents is more like $20 worth of excellent recommendations!
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ValerieJoy Premium
That is really bad news, Jeannine. I've just published a post in which I included 'I will stay an Amazon associate 'forever'. Well, that suddenly changes things for me. Perhaps it is time for me to spread my wings. I have had an account with Share-a-Sale for longer than I can remember, but I don't use them. One feature of Amazon that appeals to me is the customer recommendations which other companies don't have, or certainly not to the extent of Amazon.

Thanks so much for raising awareness of the future as an Amazon Associate.
Valerie
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JeannineC Premium
I work for Awin US, and we own ShareASale. There are so many programs on there with much higher commissions and much longer cookies. You may be surprised how the other merchants have customer recommendations. Knowing what I know about Amazon sellers, I wouldn't trust their recommendations for anything. Sellers have been known to wipe out another seller's good comments and Amazon does nothing about it. Then the bad guy's products rank higher while the good guy struggles (sometimes for years!) to get his good ratings back. It happens much more often than you'd think.
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ValerieJoy Premium
This is very helpful information, Jeannine, thank you. From what you've told me I will revisit ShareASale and take some time to more carefully study their vendors and the products they offer.
I have been with Amazon for some years before they started banning associates that didn't meet the six months requirement. I have seen so many changes with Amazon, including the reduction in affiliate rates which occurred about two years ago, and so it goes on and on. I've always been too trusting, or maybe naive is a better word. After reading your post and what you have told me, it's time I spread my wings regarding affiliate programs. I would certainly be affected if Amazon were to shut down my account for no reason other than to please themselves. I appreciate your help. Thanks again, Jeannine.
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JeannineC Premium
I'm so glad you found this information helpful! Two years ago I watched someone with a toy site lose half her income from Amazon when commissions were cut from 8 to 4%. She was the primary support for her family. It was a tough time. Obviously Amazon doesn't cut commissions based on a financial need, but rather simply because they can.

There are literally thousands of merchants on ShareASale. I'm sure we can find alternatives to the products you are promoting on Amazon. At least check it out! And keep up the great job!!
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ValerieJoy Premium
I logged into my ShareASale account today and realized I would need to delete it. The reason for this is I opened that account in 2013 when I owned a virtual secretarial business registered as a company. I've since closed that business and the company. So, I opened a new account today. I do hope it gets approved. When I entered the url of one of my websites I received a message saying an affiliate already has that website, which of course was me. Having now deleted the first account, I expect all will be well with the new one.

I saw some great products, but there's more to research in the niche I'm working in. Also, I have a Christmas website which is in need of some loving care. I imagine there will be some appropriate affiliate programs available in that niche.

When the new account is approved I will let you know. Looking positively, of course!

Many thanks for your help, Jeannine.
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JeannineC Premium
If you run into any issues getting approved, let me know and I'll reach out on your behalf. Glad you already saw some great products! I'm sure you'll find even more. ShareASale has some amazing merchants for sure.
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tjkhan1 Premium
This has crossed my mind before but the sole reason i was using amazon is because of its simplicity .. ive found other programs either hard to get onto or just too complicated .
Some company will come forward and try and pickup the pieces of amazons mistake im sure of it .
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JeannineC Premium
There are other online department stores - Bonanza.com, AliExpress.com, plus countless niche stores. I'm glad to help you with applying to Awin or ShareASale, as I work for Awin US. It's not that hard or complicated. You learned how to master WA - you can learn this too. Think of how much money you've left on the table because you took the easy route! Ouch!
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roamy Premium
I for one hate being Amazon affiliate but it`s a love-hate thing, it`s much easier to sell products on Amazon than anywhere (in my opinion) but the commissions really suck, the cookie period terrible.
I think anyone who wants to succeed with Amazon has to make sales for a minimum of $1000 a day to succeed online and some products do not even earn you a commission.
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JeannineC Premium
Amazon will always treat you badly, and find ways to make even that worse. You chose easy over earnings. It's your right to do that, of course, but you've definitely paid a price in opportunity costs. Did you start your site so it could be easy or so it could be profitable? Whatever you decide is fine, but just make sure you are considering all aspects when choosing your partners.
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roamy Premium
Agree but there are times I find myself falling back to Amazon for different reasons, for example, last night I was looking for a product and getting more frustrated by the minute, could just not find it in flexoffers or at Rakuten(Linkshare) even after spending 25 minutes searching.
Went to Amazon, first search and the product was right there, found in less than 2 minutes. This is not the first time, It`s also much easier(possible) to find affiliate products on Amazon so sometimes affiliates find they have to sell Amazon products.I just try to mix things up when possible.
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JeannineC Premium
That doesn't surprise me that you didn't find it on those two networks. Awin is the largest network in the world, with over 26,000 merchants. You have a much better chance if you belong to additional networks and not just those two.
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scottlnk Premium
Hello, Welcome to the family. We are so glad you are here. If you need anything, please reach out to us.
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JeannineC Premium
Thanks. I've actually worked in affiliate marketing for over 20 years now, so if I can help you, please feel free to reach out as well.
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RiaBatista Premium
Thank you for sharing you are completely right!
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JeannineC Premium
I hope people will read this, if only to protect themselves. I hate seeing people get hurt by A.
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GeoffGS Premium
I agree. Being an Amazon Affiliate shouldn't force anyone to put all their eggs in one basket. You can still use other affiliates programs alongside Amazon. And if Azon gives you the boot, just switch your links over. It will take work, but our articles will never belong to Amazon.
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JeannineC Premium
They don't treat their affiliates well for sure. They are all big stick and never give you the carrot! People will buy other places than Amazon, especially if you give them the reasons why another source is better in your posts.
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Fleeky Premium
Spread your affiliate products i deed
And do not expect from amazon
Great reminder
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JeannineC Premium
I definitely don't like how they treat their affiliates!
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Hollshope Premium
No, I don't want to build my whole future on Amazon! What will the do next?
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JeannineC Premium
I'm sure more commission cutting is in the future!
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Mick18 Premium
Amazon has even got more greedier. Don't put all your eggs in one basket.
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JeannineC Premium
The last time they had a significant commission decrease, it came right before they announced record profits.
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Traveller75 Premium
The bigger they get the greedier they get, good post thanks.

Wayne
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JeannineC Premium
It breaks my heart to see publishers focus entirely on Amazon, when I've watched them for years and seen them do this more times than I can count!
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RosanaHart Premium
I've done a lot and made a reasonable amount over the years with Amazon but just last week I got Shareasale to reinstate me and found several businesses that looked good. Some of them have better commissions than A but not all, but I think they all have longer times.
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JeannineC Premium
Welcome back to ShareASale! If I can help there, let me know!

Yes, I think you'll usually find much better commissions working through a network, and the cookie will always be longer than the silly 24-hour cookie on Amazon.
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JeffreyBrown Premium
I was ALWAYS taught not to put all eggs in one basket!

Thanks for sharing!

Jeff
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JeannineC Premium
You were taught well! I love how that saying applies to so many different situations.
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EdwinBernard Premium
I was always apprehensive to join Amazon because I have been reading how easily they remove affiliates who do not make minimum sales quotas. Your report proves Amazon does not appreciate the sales that affiliates drive to their store.

At least for the moment, thanks but no thanks Amazon!

Edwin
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JeannineC Premium
They will remove you over tiny infractions, then force you to swap out every link if they do let you back in. Merchants and networks can be much more understanding if you make a mistake. Wise to stay away for sure!
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EdwinBernard Premium
Jeannine, thanks for the follow. Going to follow you back too!
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