This isn’t going to be a long post, but I wanted to address a question I received shortly after posting more information about the BuildMyRank test I’m doing right now:
“Why do you bother with the Amazon affiliates program when other affiliate programs offer so much higher commissions?”
First of all, let me say that I use both the Amazon affiliate program and a number of other affiliate programs (including Clickbank, Commission Junction, Linkshare and Share-a-Sale) that promote both digital and physical products. Overall, I think it’s a much better idea to find a hungry market and give them what they want than to be married to a particular affiliate program.
However, this doesn’t stop some people from being vehemently against the Amazon affiliate program. The case against the Amazon affiliate program is two-fold: first, that the affiliate “cookie” length is extremely short at 24 hours and second, that the commission rates you’ll receive are very low.
First, let’s talk cookies. Basically, affiliate programs run off of “cookies” – small pieces of information that are passed on through your affiliate link that tell the affiliate provider who should receive credit (and the commission!) for the sale. These cookies aren’t permanent, meaning that once you refer someone to an affiliate offer, you have a limited amount of time in which to convert them, otherwise you won’t be credited with the sale.
Most affiliate program providers offer 30- or 60-day cookies; Amazon offers only 24 hours. So you’re pretty much only going to get credit for the purchases that visitor makes that day, compared to other affiliate programs, which allow time for visitors to mull over the purchase and return later to buy. There’s no doubt that this is a disadvantage of Amazon’s program, but don’t let it discourage you yet.
Next, Amazon’s referral rates. Yes, they are typically much lower than other affiliate programs, but no, that doesn’t bother me. For the most part, Amazon offers a performance-based commission system with different tiers that give the highest commissions to the people who sell the most items. However, even at their highest tiers, you won’t be earning much more than 8% of the total purchase price for the goods you sell. Other affiliate programs, by comparison, pay out as much as 75% of the purchase price.
Now, here’s why I don’t think you should care about these issues…
Amazon is perhaps the most widely utilized, widely respected e-commerce site on the web today. Certainly, it doesn’t have many competitors in terms of the breadth of its product offerings and the costs at which it can sell products. But perhaps most importantly, just about everyone in the world knows this.
When you refer someone to Amazon, you don’t have to overcome their fears of buying from an unknown digital merchant. You don’t have to convince them that they’ll receive their products in a timely manner, or reassure them that the product will arrive in the condition they’re expecting, because Amazon’s customer satisfaction guarantee is one of the most stringent on the web.
You will have to overcome these obstacles when selling almost all digital products, and most physical products that come from merchants other than Amazon. Although e-commerce continues to become more and more accepted in society, fears of identity theft and unscrupulous internet sellers are still very real. And if you can’t convince potential buyers that your affiliate programs are legit, your sales will suffer as a result.
Consequently, I’ve found that my conversion rate for Amazon affiliate links is generally higher than it is for other affiliate programs. I might be earning less per conversion, but the number of visitors I’m able to convert makes up for this disparity.
However, I will admit that selling Amazon affiliate products presents some challenges. If you aren’t 100% sure you’ll be selling a high volume of products (which is likely the case with affiliate niche marketing), then you’ve got to choose products with a high enough retail price to make up for the fact that you’re only receiving 4-8% of the sale.
For example, say you want to build an affiliate niche website around coupon organizers. Clipping coupons is a hot topic right now, and there’s certainly money to be made from this niche in a down economy. Unfortunately, coupon organizers average around $10 a piece on Amazon. Even if you sold 631 coupon organizers (the minimum # of items you’ll need to sell to qualify for an 8% referral rate), you’ll still only receive around $500 for your troubles.
To compensate for this, I prefer to only promote Amazon products or product lines with an average selling price of over $100 per piece. I will occasionally make an exception if the product line has a number of different add-ons that might increase the total price of the sale. For example, the machines I sell on my scrapbooking site often need additional pieces (such as cartridges, paper, etc) in order to run. Even if the particular machine I sell is under $100, these extras can bump up the final total significantly.
Amazon’s affiliate program isn’t right for everyone, but the worst thing you could do would be to dismiss it entirely, just because the cookie lengths and referral rates don’t measure up to affiliate programs.
What do you think? Have you used the Amazon affiliates program before, or are you sitting squarely in the “Amazon isn’t worth my time” camp? Share your experiences in the comments below!