Amazon Removes Third-Party Vendors From Its Affiliate Program

Amazon has removed third-party vendors from its affiliate program.

Starting at the beginning of this month, affiliate networks such as Skimlinks and Sovrn (which acquired VigLink) can no longer send traffic to Amazon and get a cut of transactions, according to sources at many affiliate networks and publishers.

Removing third-party affiliate networks frees up significant profit margins for Amazon and, potentially, for publishers that traffic sales directly to Amazon.

Amazon offers different commissions for different kinds of purchases – beauty products and apparel could be as much as 10%, while video games return less than 5%.

But affiliate networks didn’t just get a cut of the single item they linked to, they got their commission for any products added to the cart within 24 hours of the original item. That meant if someone carted a $10 pair of socks via an affiliate link, and then added $300 worth of other products, at checkout the affiliate network would earn $30 on those $10 socks.

While Amazon could have limited affiliate commissions to only products added to a cart, instead of removing third-party vendors, this policy change is a kind of supply-path optimization, said one publisher exec with a large affiliate business.

Amazon declined to comment.

Amazon has direct relationships with thousands of publishers, including its own header bidding network. So the ecommerce giant isn’t giving up on affiliate entirely – it’s just creating a single channel between Amazon and digital publishers.

“Amazon has enough publisher relationships now and TAM (Amazon’s Transparent Ad Marketplace, its supply-side ad exchange) is strategic enough at this point that it clearly outweighs the value of the affiliate network traffic, even if that is profitable,” said another publisher monetization exec.

Publisher direct programs temporarily halted due to COVID-19

The Information reported last week that Walmart and Amazon suspended direct ecommerce deals (i.e. affiliate marketing) with digital media companies including BuzzFeed, Vox and Vice.

However, Amazon is only suspending publisher-direct programs because of how strained it is by the COVID-19 pandemic, according to two publisher execs and two sources at affiliate vendors. With so many products zipping out of stock and the added complications of nonessentials not being shipped right now, Amazon is temporarily halting its ecommerce deals with other publishers.

By contrast, the removal of third-party affiliate vendors is a true policy change, not just a health crisis response. According to one affiliate network exec who said he was warned of the change, Amazon has planned to remove third-party affiliate networks since before February.

Rethinking Amazon affiliate strategies

The Amazon affiliate policy change has major ramifications for ecommerce ad tech. In recent years, affiliate vendors such as VigLink have added publishers to their rosters by creating products that dynamically insert links to Amazon and other ecommerce sites, based on factors including commission rates, consumer history and likeliness to convert.

Consumers are generally most likely to convert on Amazon, which therefore gets the most traffic. But publishers had the flexibility to divert traffic to other sellers to capture higher commissions or as part of larger marketing deals. (For example, Barnes & Noble might cut a deal with, say, BuzzFeed, to generate stories about the best games and books to order during quarantine – and those would obviously link to B&N.)

Now, digital media companies will need deliberate Amazon and non-Amazon affiliate strategies, and won’t be able to dynamically insert links to capture audience value, said a publisher monetization exec. Many publishers will commit to being 100% focused on Amazon.

Mayuresh Kshetramade, CEO of CJ Affiliate, said Amazon has created an opportunity by removing third-party vendors from its affiliate program.

“We are actively working with our publishers who have been seeking ways to diversify their affiliate commerce beyond Amazon and our advertisers who see this as an opportunity to grow their market share,” he said.

Enjoying this content?

Sign up to be an AdExchanger Member today and get unlimited access to articles like this, plus proprietary data and research, conference discounts, on-demand access to event content, and more!

Join Today!

 

Add a comment

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>