With millions of products available for sale via Amazon Associates, Amazon.com has built a
premier affiliate program. However, with so much flexibility, the program's complexity frequently presents a challenge
to both new publishers and current publishers. As a result, many of you either let your links
get outdated or you simply fail to keep up with many of the new features added by the Amazon
Associates team. This post and my upcoming posts will try to make it all easier for you.
So, which sites make the best Amazon affiliates?
Sites that make the best Amazon affiliates are well-organized with unique content about a particular topic for which Amazon sells products. For example, sites with news about the latest cell phones would be perfect affiliates, linking to Amazon to fulfill their readers' demand for the latest, hottest gadgets. My site is all about making money with affiliate programs, so I will be adding my own Amazon store full of excellent reading material about making money with your sites.
How do you make money with Amazon Associates program?
Amazon will pay you a percentage of revenues it generates from visitors that click over to Amazon from your site. The amount depends on which compensation option you select.
Compensation Option 1: Performance Fee Structure
This is the default compensation structure. As you will see, this is the only compensation structure you should use.
With this compensation structure, your commission rate is based on how many Amazon products you sell during any quarter, with the base commission being 4% going all the way up to 8.5%. Here's the chart of the Performance Fee Structure:
Compensation Option 2: Classic Fee Structure
This is a legacy fee structure that no longer makes sense for the publishers. It pays a flat 4% commission on all sales. Since 4% is the minimum commission in the Performance Fee Structure (Option 1), going up based on your sales volume, I suggest you do not consider Option 2.
Since Option 1 is the default option, there is nothing that you need to do to select it. The rest of my post will assume you have selected Compensation Option 1: Performance Fee Structure.
Performance Fee Structure Considerations
There are a number of very important considerations that you should keep in mind:
- Referral-Fee Rate is retroactive. This means that if you sell 1,000 items during the calendar quarter, your commission will be 7.5% on all of the non-electronic items you sold that quarter.
- Your commission on Electronics items will be 4% regardless of how many items you have sold during the quarter. However, Electronics items do count towards your item total, so if you sell 20 Electronic items and 1 non-Electronic item, the non-Electronic item will generate a 6% commission for you.
- It is far better to sell 100 items priced at $10 each than 10 items priced at $100 each. In the former case, you will earn $65 in commissions ($1000 in sales * 6.5% based on 100 sales = $65 in commissions). In the latter case, you will earn $40 in commissions ($1000 in sales * 4% based on 10 sales = $40 in commissions). Thus, you'll do better by selling more, lower-priced items than fewer higher-priced items.
- This fee structure applies to all products you sell that quarter, regardless of the links you used to promote them. Thus, if you sell 20 products via the Amazon aStore and 10 products via the Omakase links, this means that you sold 30 products that quarter and your commission structure will reflect this quantity.
- You cannot receive any commission on sales you make to yourself. However, anything you can do to encourage your website visitors and your friends/family to shop via your links will enable you to make money with Amazon Associates.
In my future post I will discuss how to build links to Amazon, including tips and tricks of navigating through the maze of link options Amazon has given you.
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