I woke up on April 14th 2020 to a rare email in my inbox from Amazon Associates. Amazon announced a change in affiliate commission percentages across six or seven categories. Two of those categories are the heart of our family business.
Not every blogger depends on Amazon commissions for a sizable chunk of their income. So let me give you a sense of perspective.
Ads on site tend to contribute about half of all earnings. Affiliate commissions account for the other half.
Amazon just cut two of our major product categories by 75%. From a 4% commission to a 1% commission.
If you cut half of your earnings by 75%, what does that mean? That means 3/8 of all income suddenly vanishes in a puff of smoke.
Now let’s visualize those losses
If you earned $100K a year (I like nice, round figures for examples) from your small business, and 3/8 of your income disappears,
Your $100K income is now $62.5K. You just lost $37.5K because Amazon changed a digit in a database.
Now imagine that Amazon announces this decision during mandatory stay-at-home orders due to a global pandemic, and all your advertisers have already just reduced their ad spend budgets as well because their customers aren’t exhibiting the same shopping behaviors.
This means that while you may have earned $1.00 per 1K page views in the past, you may suddenly only earn $0.50 or $0.33 for the same exact traffic.
Your quality and your content haven’t changed. You haven’t taken anything away from your readers. But your hard work now earns a fraction of the revenue it earned last month.
Houston, we have a problem.