The only free cheese is in the mousetrap. But is it?
If you build niche websites just like I do, you woke up to a very grim news.
Some of you may have a lot of investment in Amazon Affiliates Program: energy, time and maybe even money.
We can see that the big picture leans toward a “Walmartization” of the economy… and as we speak, an “Amazonization” of the market.
But do not despair, we introduce you to plenty of solutions in this article.
I am sure that some solutions are original, the type you have never thought about.
Amazon Affiliates Program did an adjustment in the commission rate.
They cut the commission rate, drastically.
During a worldwide crisis.
At a moment where a lot of people lost their jobs or are about to lose their jobs.
I was flabbergasted at the decision.
I am not saying that “Corporate America” is bad, but we cannot put our heads in the sand either.
When I learned the news, probably at the same time as you did, I decided to write a story about a little mouse that finds the Kingdom of Cheese at a house located in Seattle.
I did not publish it not to affect my SEO juice, but here is a summary:
“When the mouse finally walks its way to the Kingdom of Cheese, located in Seattle, it finds out that the cheese is locked in a safe (the fridge.) The mouse still finds some cheese in the mousetrap, but the cheese is not only the cheapest cheese on the market, but it is wrapped in a plastic sheet! So cheap, this owner! Using the cheapest cheese in a mousetrap. Is that really what a little cute mouse can expect from the Kingdom of Cheese? Really!?”
Indeed, very cheap! Does it mean you should stop doing Affiliates Marketing on Amazon?
No, we believe you should continue. But at the same time, you should have a Plan B and a Plan C.
There is a study that shows the most popular niche in Affiliates. As human behavior does not really change on the short term, we can only assume that the niches remain the same as we speak.
The niches mentioned in the study show that fashion is the number one most popular affiliates category, followed by Sports & outdoor, health/wellness & beauty, Travel and then home & garden.
There are plenty of niches, probably even thousands!
So do not despair, there are still plenty of opportunities to make money online.
After reading this post you will:
- know what to do (!)
- have ideas on how to diversify the Amazon Affiliates
- read a few case studies that will give you diversification ideas
- have a list of Amazon Affiliates program alternatives
Why did Amazon cut the Affiliates Commission of their Program
Because they can.
Yep. As simple as that.
There is a saying in French: the person holding the bigger side of the stick has the upper hand.
We saw the writings on the wall a few months ago when Amazon reduced the timeframe for commissions to be paid between the visit and the purchase. So when a referral visits Amazon and makes a purchase, for a commission to be paid, the purchase needs to happen within 24 hours (is it now 24 hours? if I am wrong please let me know in the comments.)
Now, let’s look at the rationale behind’s Amazon decision to reduce the Commission of their Affiliates Program:
- Profit: Amazon can make more money by cutting the affiliates' commission, the laws of the market have no feelings, Amazon is a self-interested entity.
- Habit: people’s behavior means they will always shop on Amazon, Amazon already has the traffic, whether it comes from a “Partner” or organically (or from paid ads.)
- Trust: consumers trust the products sold on Amazon AND their trust the Brand, Amazon knows it has a great Brand.
- Reliability: consumers also know that Amazon is reliable, Amazon knows this too. Delivery is fast and consumers can count on Amazon's guarantee.
- Market position: Amazon has a strong market position and the competition is low *Walmart only counts for 4% of the online sales in the US.)
Makes sense right?
Alternatives to Amazon Affiliates and Other ways to Monetize your website
Here we list a few alternatives to Amazon Affiliates and a few different ways to monetize your website. This website also has a great list of different ways to increase Amazon Affiliates earnings.
- Buy products and resell them yourself with a margin (you’d be surprised how many people do not compare prices!)
- Dropshipping from China or the US (some dropshippers now offer delivery straight from the US)
- Link to companies, brands, and manufacturers who can sell and ship by themselves, cutting the intermediary
- OEM: build your own brand, just add the logo on existing products (this means you need to build an email list and probably a social media following to upsell and cross-sell)
- Manufacture: get your own products manufactured under your own specs
- Collaborate with independent eCommerce platforms and direct traffic over there
- online community
- events through offline communities (you’d be surprised to see how many people are ready to connect face-to-face)
- courses behind a paywall
- consulting one-on-one
- knowledge: eBooks, training, videos, podcast, etc.
- Product endorsement (e.g. a KOL, Key Opinion Leader, endorses and sells products for you)
- Traffic Generation Affiliates (e.g. send traffic to KOL, brand, eCommerce and manufacturer’s website)
The best niches are high value and low in competition.
This is easier said than done, but there are so many products in the world that there is a way to find something that works, especially if you follow the 80/20 rule (80% of the profits come from 20% of the products.)
What are your strategies?
So we can say that there are a few types of niches depending on the competition and margins.
4 Types of Niches
- Niche is low competition, margins are high (a cash cow!)
- Niche is high competition, margins are high (still money to make by working hard and smart)
- Niche is low competition, margins are low (competitive, not much money, you’d rather flip burgers instead?)
- Niche is high competition, margins are low (avoid at all cost)
There are plenty of possibilities and as we mentioned, it really depends on your mindset and how much you are willing to invest.
The best way to know what type of niche are best is to do a keywords research and market analysis.
Tell us what you think in the comments! If you have extra ideas please share them!
Diversification of your Amazon Affiliates Strategy
You can diversify vertically and/or horizontally.
It is case-by-case, so the strategy and the tactics need to fit your current situation and capabilities.
But overall, we can give you great guidance to help you move towards more independence.
The possibilities of what you can do to diversify will depend on:
- the niches you cover (and the type of product)
- value of the products, the market, and the affiliates commission
margin made when selling the products (not the affiliate margin, we mean the sales margin itself)
- cost of acquisition of a new customer
- differentiation (your ability to be different and provide a unique selling proposition that will convert customers)
- the markets (low/high competition, saturated or not)
Of course, if you sell baby milk powder formula as an affiliate, it will be tough to create your own brand unless you ave half a million dollars to invest.
On the other hand, if you sell kitchen knives or phone cases, it becomes more and more realistic. You can use an existing product and stick your brand on it. Alternatively, you can also produce goods from scratch.
Diversify Vertically or Horizontally
Horizontal integration means that you may acquire another company or website to achieve:
- diversification of product offering
- economies of scale grow !
- consolidate your position in a niche
- and many more.
An example of horizontal integration would be a hotel chain buying another hotel chain and streamlining the operations of both to make them more efficient and effective.
Another one: Amazon bought plenty of companies, one being Whole Foods.
Vertical integration means that you act with the production processes in your business, intending to achieve the following:
- have more control before and after the part you are implicated in acquiring new channels
- reduce cost
- increase profits
- and many more.
A good example of vertical integration would be a mobile phone maker acquiring a company that makes phone chips and another company that builds phone software.
And: Amazon is making the Kindle instead of depending on an external manufacturer.
If we forgot anything let us know in the comments!
Amazon Affiliates Case Studies of People with a Plan B
There are a few good examples of people who diversified early, those are great cases as they are realistic and can be executed by anyone.
Here are a few case studies that cover a few different scenarios:
1.Niche website Number 1 is Partner in the Amazon Affiliates Program and sells knives for the kitchen, hunting and fishing.
It sounds boring, but you can have ads on a website like this without killing your brands. Ads are absolutely OK on websites where the brands is not the most important factor in the purchasing decision.
The owner could develop an OEM brand with a custom-made logo, for example, a line of very expensive knives that are the superstar products of the website (not sure if this is OK with Amazon’s terms and conditions)... while selling other knives from existing companies, more affordably priced.
- Sell the knives of craftsmen who handmade tools that cut, and why not get a product endorsement from a well-known chef, your local hunter or fisherman?
- Diversify by adding new product lines in the outdoor category as well as a home defense category
- Build an online community of folks interested in outdoor activities like fishing, hunting, etc.
- Sell eBooks or classes on how to use the knives for specific activities: fruit sculptures like a pro Chef, building a shelter in a forest with a knife, etc.
2.Niche website Number 2 is also Amazon Affiliates and sells baby products ranging from clothes, diapers, creams to powder milk and crackers.
As the niche is a little bit sensitive and possibly regulated for some of the products (e.g. food,) we are a little bit limited in the range of what we can propose, but let’s use our imagination:
- As baby products are considered “cute,” developing an OEM brand of a cute product can reap great rewards. A good example would be to develop your own brand of organic cotton socks. Babies grow fast and go through many pairs of socks the first few years of their lives. A good example of vertical integration!
- Alternatively, you could find some products from Japan or Korea, who have a great reputation for security compliance and cuteness of their products, and sell those rare products via your website.
- You could also acquire another website in a compatible niche such as baby stories, baby songs, tips to raise a healthy baby… and promote the products on that website as well. A good example of horizontal integration.
- Sell eBooks co-written with a doctor, like “10 skin problems that babies may develop in the first 24 months,” "Secrets to stimulate your toddler's IQ," etc.
- An online community can also be interesting as women who are on maternity leave like to do research when the baby is napping. Another advantage is that you can diversify the offer and cover different age categories (e.g. 0-24 months, 2-4 years old, 5-7, etc.) so that you can keep your subscribers during their whole parenting journey.
Feel free to leave comments below or reach out to us via the Contact Form is you need help!
Amazon Affiliates Commission Independence: What to Do Step-by-step
Take a deep breath, everything will be fine.
Do not despair, do not let emotions overtake you.
There is hope.
Step 1: Take a Picture of the Current State of your Amazon Affiliates website
The plan should assess where you currently are:
- what your skills are
- what you are interested in
- the amount of time, money and energy you can invest
- what your options are
I often say that imagination trumps raw intelligence.
And I also like to say that doers reap more than over-thinkers.
Step 2: Hard truth, Either Diversify or Die.
Intense, I know.
Putting all your eggs in the same basket is a recipe for disaster.
Working with the Amazon Affiliates Program is cool, but it is not enough.
Like any investment, diversification is the way to ensure that no matter what happens in the market, you will not lose your whole investment.
Nice websites and pretty much all other well-thought digital strategies include a marketing mix of different:
- revenue sources
- communication and sales channels
- monetization tactics
- audience building, subscribers, leads and sales growth strategies
- products and services development
- the 80/20 of revenues, profits, efficacy and efficiency
Step 3: Brainstorm, Find Inspiration and Research
You should do a brainstorming session to find ideas.
A good way to do this is to ask questions:
- what am I good at?
- what success stories can I mimic?
- what problem can I solve?
- what elements can I mix to bring solutions to problems the market is facing?
- how can I integrate horizontals (e.g. other companies) and verticals (e.g. own an eStore, sell in other markets, own your brand)
- can I own any extra part of the process?
There are plenty of other business models that apply to what we do with niche sites.
I am sure you can use your imagination and find plenty of inspiration out there.
Then do a formal research. Look at the numbers and the data.
Keywords are also a good starting point to gain insights.
Step 4: Make a Plan, get Goals and set KPIs
Make a plan to guide you.
Use Goals and KPIs to see if you are making an impact, just like you would do with the Amazon Affiliates Program.
I have a Content Plan for the next 30 days and on top of that, I have a word counter that gives me the percentage of words I wrote related to my yearly goal.
Look at the technical solutions, contact vendors, resellers, manufacturers.
Talk to people, seek advice.
The plan should include:
- what you will do
- when you will do it
- who will do it with you the dependencies (e.g. before you sell on your own website you need to have online payment, and before you have online payment you need to incorporate, and so on)
Step 5: Execute
Plain and simple. Just do it.
We hope this little improvised brainstorming session helped you.
Leave a comment and let us know how you are handling the update?
What are you doing to deal with the update?