July 19, 2021
Amazon.com has inserted A brand referral bonus program that enables third-party sellers to earn an average of 10 percent bonus on product sales to drive traffic to their Amazon listings from non-Amazon marketing campaigns.
In an announcement on the Amazon Sellers Forum, Amazon pointed out three advantages:
- Help accelerate your growth and improve the efficiency of your non-Amazon marketing and advertising campaigns that drive referral traffic to Amazon.
- Save money by receiving bonuses that average 10 percent of the sales from the traffic you’ve driven to Amazon.
- Improve advertising efficiency by receiving the same reward for customers’ purchases of additional products from your brand for up to 14 days after they click on the ad.”
The bonus is offered as a credit on the referral fee, which is the percentage that Amazon gets from sellers on its site. Fees have varied widely by category but are currently averaging 15 percent.
In the comments section of the ad, many sellers seemed skeptical of the program with some fearing that the reward price would eventually be lowered. Few saw benefits because customers actually trust them to make purchases on Amazon.
For Amazon, the move comes as retailers have redoubled their online efforts during the pandemic with Walmart, Google, Target, Kroger and Instacart all busy recruiting third-party sellers into their online marketplaces. Facebook, Instagram, and TikTok also promise an even bigger push for e-commerce.
Talking to Ad ageJames Colon, managing director of integrated media planning at OMD USA, believes that in addition to rewards, brands that redirect external traffic will earn a high profile in organic search on Amazon. “Amazon will place more weight on traffic share for product pages and sales that are paid off-site,” Mr. Colon said.
in a Blog entryIn addition to newer tools like A+ Content, Amazon Attribution, Amazon Affiliates, Amazon Associates and Amazon Live, the Brand Referral Bonus is part of the company’s effort to make its platform less transactions. She wrote that Amazon will increase its “value proposition” by enabling shoppers to “interact with brands in a relational as well as transactional manner.”
Discussion Questions: What do you think is behind the Amazon brand referral bonus, and does it pose a threat to its online competitors? Do you see more positive and negative aspects of external sellers?
“If it helps your business grow, use it. If not – don’t.”
“It’s a smart move on Amazon’s part. Many brands are reluctant to divert ad traffic from their website.”
“Amazon is enlisting stakeholders in their fight against other e-retailers. It’s a smart move.”