2020 was particularly cruel for some affiliate marketers.
One of the most popular and accessible affiliate networks, Amazon Associates, cut referral fees across a number of categories, resulting in a drastic reduction in revenue for a large number of websites.
If you are part of this number, you have several options. Either stay seated and accept less money in your pocket, or look for a pivot to regain what has been lost.
In this post we will introduce some options if you were affected by the commission cut. In particular, how to diversify your business and sell physical products with Amazon FBA.
Amazon Associates commission changes for 2020
First, a brief introduction to the commission cuts mentioned above.
As of April 21, 2020, prices for most product categories have changed quite dramatically. Among the most affected:
Furniture, home, handyman, lawn & garden, pets, pantry rose from 8% commission to 3%.
Headphones, beauty, musical instruments, business and industrial supplies from 6% to 3%.
Food from 5% to 1%
Health and body care from 4.5% to 1%
You can imagine how a website's affiliate commissions for products in these categories affect all or part of their earnings.
The reception of the affected partners went as expected. Some even went so far as to file a petition to reverse the rate change, which collected nearly 20,000 signatures at the time of writing.
Along with a drop in sales, this correlates with a decrease in sales value for websites that rely on Amazon Associates commissions. Cutting baits and leaving the game will not be nearly as profitable as before.
Alternatives to Amazon Associates
While Amazon is one of the most popular and accessible affiliate networks, it is by far the only one. It's also not the only monetization method for a niche or government website.
Other affiliate networks are a place to look for a pivot. There are competing online marketplaces like Walmart, eBay, and Target, all of which question Amazon's influence on the e-commerce game and will be happy to pick up on some of Amazon Associates' disgruntled marketers.
Then there are affiliate networks that bring you more into contact with brands than with a marketplace. These networks include ShareASale, CJ and Rakuten. The advantage of these affiliate programs is often a significantly higher commission compared to Amazon Associates before interest rates are cut.
The downside is that you have less variety than Amazon – you may not be able to find the best products in your niche with your own affiliate program. Also, many programs don't have Amazon's site-wide cookie, which you can use to earn commissions even if someone buys a product with multiple clicks.
Many affiliate websites are already making money from running ads. However, if this is not the case and your income was primarily generated through Amazon Associates, you should seriously consider this.
Google AdSense is one of the largest and most remarkable ad programs currently used by more than 10 million websites.
Ad platforms like AdSense or Ezoic are popular because all you have to do is add a little code to your website. You optimize and run ads and you get paid for it. This is an easy way to start monetizing your website traffic.
The main disadvantage is that it will lose control over the appearance of your website. Some website owners prefer not to display ads that can look spammy and out of place. This can also have a negative impact on the speed of the website and affect the customer experience and possibly search engine optimization.
Sell your own products through FBA
Another alternative is to switch from advertising other people's products to selling your own products.
This is obviously a bigger pivot point than the previous options. To switch to another affiliate network, all you have to do is find new affiliate programs, exchange some links, and possibly rewrite some content. When you sign up for AdSense or Ezoic, you only need to change the website design.
Selling your own products takes more work to get rolling, but ends up with higher earnings and more control over your business.
What is FBA?
FBA is met by Amazon, Amazon's fulfillment network for the third-party marketplace. It is a practical shortcut for anyone wanting to start selling products online by doing many of the cumbersome tasks associated with transporting products from point A (supplier / manufacturer) to point B (customer).
With FBA, you ensure that products are delivered to Amazon's warehouses, where they are responsible for storage, packaging, picking, shipping to customers, and return and customer service.
This way you can focus on marketing and bringing your products to people – similar to affiliate marketing, except that you have a lot more control over and come back from the revenue stream.
So why should you shoot and sell your own products?
First of all, you don't have to choose one or the other. You can absolutely monetize your website with a mix of both. There is nothing wrong with having a number of articles that review products that you earn partner commissions for and your own products that you advertise.
This is actually an extremely effective way to run your business. You get a much more diverse source of income. Anyone whose eggs were all in the Amazon Associates basket before April will surely know the value of diversification.
Selling your own products gives you more control over your business. It gives you something to promote that you actually own, rather than renting part of your earnings from someone else (e.g. Amazon).
Affiliate earnings are great due to the low overhead and passive income, but it's wise to add a more solid revenue model.
Why especially FBA and Amazon that sell directly on your website? One reason is the ease with which you can sell products online with FBA. You almost certainly need to hire a team to manage sales and fulfillment when you are responsible for the entire package, from storage to order management to shipping.
But with everything Amazon does for you with FBA, you can often act as a solo preneur, as many affiliate marketers are.
Another plus is the customer base from Amazon. For this reason, FBA is essentially similar to operating an affiliate site. The hardest part is the initial traction. Once you do this, regardless of whether it's ranked on Google search or Amazon search, users will find you yourself and you will passively make money. You don't have to worry about customer acquisition.
Why affiliate marketers are in the perfect position to start on Amazon
Panning or diversifying to sell FBA products is particularly interesting for people who run niche websites because they are in the perfect position to quickly gain a foothold on Amazon.
The biggest problem for FBA sellers and the reason why many people struggle to get going is product traffic.
When you launch a product for the first time, it is not visible. To evaluate and sell your product, you primarily need sales. What you can't get if nobody can see your product.
For most sellers, this means pumping a large sum of money into Amazon Ads, Facebook Ads, Google Ads, or full price discounts to get the first sales kick that organic sales require. Launches are not cheap – the days when an Amazon company was founded with $ 200 and a dream are over.
Now imagine that you have a successful website that already receives a lot of organic traffic. You are in a unique position to launch products on Amazon because you already have a customer base.
No major advertising costs required for your product launch – just present your product to the people who are already coming to your website.
Even better if you have an email list, a Facebook audience, or other resources that you can use to increase traffic.
This is a position other Amazon sellers dream of while putting thousands of dollars in each launch just to scratch the sales needed to get to the front page.
How to start selling on Amazon FBA
There are a few steps to selling FBA products that are different from your usual, but it's not as big a learning curve as you think.
The biggest step is to procure your products and deal with suppliers. However, if you have been running a website for a while and outsource content, this is not significantly different from ordering content and dealing with authors. The basics are all the same.
Here are the basics to start with physical products on FBA.
Choose the right products
First you have to choose what you want to sell.
Of course, you want to sell something that is part of your niche. Ideally, it is also something on which you have a decent amount of content.
For example, suppose you are going to sell testosterone supplements. If you have content that deals well with testosterone and testosterone supplements, you can rotate your content to promote your own product. You are well positioned because you have a target group that is looking for what you already have to sell.
You also want to do some market research. Sure, you are ranked "best (product name)", but if there are many well-known products from major brands here, it will be difficult to get a lot of traction for your product.
Use an Amazon product research tool to check the demand for products in Amazon search. You want to make sure that the products you selected contain keywords with a lot of search volume and that the product ranking for these keywords is not anchored too deep in the SERP.
Ratings are a good indicator of competitiveness. When faced with products with thousands of reviews, it becomes difficult.
If you find a category with high sales potential and the product ranking has low ratings, you are a winner.
Get your products
Next, and probably with the greatest effort, the task is to find a manufacturer for your product.
The most common way to find people who supply products is SaleHoo or Alibaba. In these marketplaces, almost every type of product is available wholesale, directly from the manufacturer or supplier.
The first step is to look for the type of product you want to sell. You can see the unit cost for each product and the minimum order quantities.
From here, you can contact the supplier to place an order and discuss changes to your product.
Some things to keep in mind when purchasing products are:
Cost: You need to make sure you still get a healthy profit margin after shipping the shipping cost and all Amazon fees while selling your product at a competitive price.
MOQ (minimum order quantity): Some products seem to have a really attractive price until you find that you need to order at least 10,000 units. Low minimum orders mean less risk and less overhead.
Check the history and ratings of the supplier to make sure you get something from an experienced and qualified supplier.
You should order a sample before placing an order so you can see for yourself what you will receive and what changes may need to be made. Also pay for an inspection service when you place an order to ensure that the products that are delivered to Amazon are of the highest quality.
Use your knowledge of the niche to make the next bestseller
After deciding what to sell and finding someone to do it for you, you still have to stand out from the competition.
You don't have to create anything completely new from scratch, but you don't want to sell anything directly from Alibaba that your label has slapped onto. Somebody else on Amazon is probably selling the same thing.
You want to make one or two small improvements and let your suppliers make the changes. This is another area where you can bring your own product to the market.
If you have already created and published content about your product, you are aware of some of the general advantages and disadvantages of competing problems. Can you find a common thread in the negative column of all your product reviews? You have a great idea for a selling point against the competition.
List and optimize for Amazon search
As soon as you have your product ready for use, you have to register it with Amazon.
A big part of creating your product list is to optimize your keywords for Amazon search. Once you've run a website and optimized it for Google SEO, it's not an unfamiliar process.
Similar to Google SEO, you want to sprinkle keywords into your listing copy so the search engine knows what your product is about. The most voluminous and targeted keywords should be highlighted most – your product title is the most valuable property.
Don't forget to research as many long-tail keywords as possible and add them to your product list. This allows you to do more searches, which leads to more organic traffic and sales.
There are many keyword research tools that you can use to find and prioritize keywords. You can most likely use the same tool you used for product research to decide which keywords should appear at the top of your listing copy and to find long tails.
Promote your product launch
After all, you have to tell people about your product. Relatively speaking, this is the easy part for affiliate marketers.
Most sellers do not have traffic flows for product launches. Even experienced salespeople. As a result, you have to spend a lot of the money to get in front of people.
With a niche site that gets traffic, don't worry. You have the traffic, now all you have to do is send it to your product.
A good idea is to add a popup to your website (or a collection of pages depending on the niche your product is in) that gives your audience a discount on buying your product on Amazon.
If you have an email list, send a few explosions to your list.
Of course, you would also like to mention your product in related content. Do you have a "Top 10 (x)" contribution for your product? Put yours on # 1.
In this way, you can immediately generate sales on Amazon and at the same time reach the breakeven point. Most Amazon sellers only dream of product launches that are also profitable.
If you want to go all-in on your product launch and there is a Facebook pixel on your website to collect data, you can run a Facebook advertising campaign to promote your product launch. Placing Facebook ads can cost a lot of money. However, if you already have targeted data collection (e.g. pixel data or an email list), these costs will be significantly reduced.
In summary, Amazon is a great source of traffic for selling products online. The problem is that it usually costs a lot to get a product on the market and get a high rank to use this traffic source.
For this reason, affiliate websites are perfectly positioned to sell their own products through Amazon FBA. You have your own way of generating traffic (which the majority of Amazon sellers don't), as well as knowledge of the niche and related topics.
If you use one source of traffic (your website's traffic) to access another (Amazon search), you multiply your earning power while building a more diversified business that is not as vulnerable to change as Amazon partner commission cuts .
About the author
Andrew Buck is content manager at LandingCube, a software tool for Amazon sellers who market through external traffic channels. He comes from Down Under in Hamilton, New Zealand, but now lives as a digital nomad in Southeast Asia. When he's not writing about Amazon sales, he spends a lot of time working on his own affiliate sites and practicing mixed martial arts.