Amazon Affiliate Marketing: What to know before taking the plunge

On the surface, using affiliate marketing to drive traffic to your Amazon listings seems like a fantastic idea. Combining affiliate’s social proof with Amazon’s unparalleled ability to convert high-intent users—what could be better?

Well, when you pop the hood and take a closer look, there are plenty of considerations that you need to weigh (and scenarios to avoid) when you’re mulling over how much to invest in Amazon affiliate.

In this post, I’ll lay out those considerations—the pros and the cons—to help you make the right decision for your brand. 

The pros of Amazon affiliate marketing

It stands alone for shopping clout

It’s hard to dispute, even with the Shopify ecosystem and the Walmart.coms of the world, that Amazon is the preeminent shopping platform. Users will shop on Amazon, whether or not your brand is there, so consider whether you want your competitors on there without your products as an option.

If you’re working with affiliate publishers to get product placements, publishers may prefer to promote Amazon links over D2C links. That’s certainly better than not having your products placed at all—although ideally, especially since not every user prefers to shop on Amazon, publishers would include Amazon and D2C links side by side.

It can be cost-effective

There are other options to drive traffic to your Amazon pages—notably, Amazon ads. Amazon affiliate is generally more efficient than Amazon ads, which means ROAS will be higher. Moreover, affiliate generally has more flexible cost structures that let you choose which will work best for your business goals.

It’s not all or nothing

Given Amazon’s commission structure (more on that in a bit), it might not make sense from a margin perspective to list all of your products on Amazon. And that’s fine—you don’t have to. You can choose to only list (and use affiliate’s levers to promote) your strongest-margin products so costs don’t get out of alignment for lower-margin SKUs.

The cons of Amazon affiliate marketing

Amazon is a relative black box

Amazon affiliate is still in relatively early days. Although there are tools (e.g. Levanta, Archer, CJ) that help with the overarching measurement of performance, Amazon is still a black box that doesn’t give advertisers easy access to in-Amazon attribution, conversion line insights, or cross-channel overlap.

In other words, while you’ll be able to measure conversions, it’ll be hard to get a true understanding of the real value of your Amazon affiliate campaigns, including how incremental they are to your overall sales. 

Amazon’s commissions eat into your margin

Amazon affiliate is similar to a traditional affiliate program in that it includes platform costs and partner commissions (plus agency fees, if you’re using an agency). Amazon’s scale also lets it charge less than the big D2C affiliate platforms.

That’s all well and good, but now we need to talk about commissions.

If you go through Amazon’s internal affiliate program, Amazon Associates, those commissions range from 1-10% depending on the product category (although Amazon Games is an outlier, at 20%).

If you go with Amazon Attribution only and use your own affiliate programs with Amazon’s tracking, you’ll set your own commission rates. For brands in this camp, regardless of the category, I rarely see rates lower than 20%. This number looks extremely high, but brands are often okay with it because they get visibility into performance and more exposure to their products—and the commission rate is mitigated by Amazon’s Brand Referral Bonus (BRB), which gives 10% back to the brand.

That’s a mouthful and a lot to consider. The upshot is that there’s an extra layer of fees that makes either version of Amazon affiliate unworkable for many low-margin products—and for brands with uniformly high margin goals.

It won’t get you the scale that Amazon ads will

While it’s true that Amazon affiliate is generally more efficient than Amazon ads, affiliate falls short on scale. If you’re looking to open the spigot on Amazon revenue, affiliate can be a contributing factor, but it’s unlikely to reach big scale goals on its own.

You need to have an established Amazon presence for affiliate to work

I have a checklist I like to run brands through before recommending whether or not they leverage Amazon affiliate. For me to push a brand toward Amazon, they must be able to say, among other things: 

• We’re doing well (over $1MM annually) on Amazon
• Our reviews are solid and growing

Without those in place, affiliate publishers might send traffic to your pages, but that traffic won’t convert like you want. Depending on your fee structure, the most likely outcome in that scenario is wasted budget.

So…should you invest?

We’ve arrived at every marketer’s favorite answer: it depends. We’ve worked with many Amazon affiliate-curious brands at Jamdesk, and the answer is nuanced for everyone. If you’re looking for a little strategic guidance, drop us a line, and we’ll be happy to chat to assess whether Amazon affiliate is a good growth option for your business.