- Amazon has cut third-party sellers including Skimlinks, Sovrn and CJ Affiliate from its affiliate program, AdExchange reported, citing unnamed sources.
- Since the beginning of April, these affiliates will not earn commission on purchases made as a result of the traffic they send to Amazon. Previously, the report explained, select sellers received a cut of the total order amount, not just the percentage of the item they added to their cart from the affiliate.
- The Amazon affiliate program will maintain direct relationships with thousands of digital publishers and offer display-side advertising in the Transparent Advertising Market (TAM).
Amazon’s move to scale back its affiliate marketing program may be a cost-cutting measure in response to the COVID-19 pandemic to help the e-commerce giant manage programs that have a reputation for being prone to high levels of fraud or excessive commission on actual sale.
As AdExchanger notes, third-party companies can earn a greater percentage of the final sale than just a commission on a single item. Items sold via affiliates generate different commission by category. Beauty products can earn 10% commission, while video game brings in less than 5%. However, if a customer adds $5 eye shadow to a cart with $500 items already in it, the affiliate that paid the shopper to buy the eye shadow can earn $50.
Amazon appears to be tightening this business model to keep more revenue from its sales, especially as consumers search the platform for new products after clicking links from external sources. By cutting out these third-party affiliates, Amazon can increase its profit margins and possibly increase the returns for publishers who send traffic directly to the e-commerce giant.
The move follows news last week that Walmart has suspended its influencer programs affiliated with social commerce site MagicLinks and e-commerce giant Rakuten. In addition, retailers Macy’s, Patagonia, and Victoria’s Secret have taken similar steps, according to a recent Business Insider report.
Publishers who don’t have direct relationships with Amazon are likely to take a hit if the affiliate marketing pullback continues. These developments come at a time when publishers are already struggling on the revenue side as marketers are cutting ad spend and preventing ads from running on coronavirus-related stories.