Maybe Screwing Associates Was Not Such A Good Idea Amazon

10 comments

From the WSJ Online

Amazon.com reported its net income tumbled 58%, pressured by higher expenses, free shipping and the termination of its Toys "R" Us relationship. Revenue rose 22% to $2.14 billion, but Amazon shares tumbled in late trading.

I remember when Amazon first implemented their associate (affiliate) program. It was great. Nice API and good content and also NICE PAYOUTS. I used to send them a LOT of traffic and was compensated for it. Then about 1.5 years ago I noticed a slow dropoff in Amazon affiliate revenue which finally dwindled into the "not worth my time" category.

Lack of associate (affiliate) traffic has not been specifically cited for Amazon's decline but I have to wonder how much of a role it is playing.

Comments

No econ majors at amazon

There are a few more problms that the dwindling payouts caused Shoe:

1. No economic moat -- if the SERPs are flooded with Amazon affiliates (which isn't the case anymore really) then Amazon's potential competitors are going to have a tougher time carving out a piece of the market.
2. After repeatedly cutting commission rates, causing the superaffiliates to leave, what benefit was there for Toys R Us (and I think more importantly their Babys R Us division) to stick around? Since the affiliate base was fracturing, Toys could just develop something on their own, or go through an established affiliate program [please not linkshare].

My wife and I are registered at Babys R Us for our upcoming little girl, so I noticed the switch a couple weeks back when we had to update the password on the babysrus system.

Cygnus

Hmmm

That is odd, I was just thinking about that the other day. I've also noticed how Amazon has garbage payouts now and I've seen them less and less on people's sites. Affiliates played a strong role in getting Amazon to where they were, it's amazing to see them back off that business model.

You're not kidding...

No econ majors at amazon

Amazon's model from the very beginning has been to sell dollar bills for $0.90

Bezos and his ilk are a testament to the classic: we lose on every sale, but we make up for it in volume.

Amazon.Com

I have never been a fan of Amazon.com ... any site where the urls stretch 2.4 miles long filled with crazy variables is just not my type of shopping experience...

plus the fact that www.amazon.com is google cached under the domain name www.amazon.com

but that url is unreachable (they redirect you all over their site) for any other person other than googlebot does raise a few flags regardless...

not to mention the missing balance

I started with them when they were born. I think I had $8 on account for the past 3 years (or maybe 4) because it just wasn't worth promoting. I just checked and the balance is zero.

Who took my $8?

not worth the time

not worth the time creating links to them

Payments

Don't they only make quarterly payments too?

Dislike the affiliate program as well...

But you can hardly claim victory for amazon's demise on its poor treatment of affiliates. The quote even states, "Revenue rose 22% to $2.14 billion". If revenue had dropped, okay fair to at least attempt to claim some kind of victory. But you can't here. Hooter has it right, it is more about a broken business model.

It was fun while it lasted

SERPs are flooded with Amazon affiliates (which isn't the case anymore really)then Amazon's potential competitors are going to have a tougher time carving out a piece of the market.

A valid point there. It was fun while it lasted... We sold $1M+ for them two years in a row (thanks Cusimano), until G got a handle on the dupe issue and whacked most of the pure api sites.

but we make up for it in volume

Quote:
Amazon's model from the very beginning has been to sell dollar bills for $0.90

Bezos and his ilk are a testament to the classic: we lose on every sale, but we make up for it in volume.

Funny, I just had this thought today. I ordered a book and some computer supplies from Amazon... everything discounted like crazy and free shipping on all... and they sent me an email the other day that they were splitting the order in two for shipping because not everything was in stock. No extra charges to me. The next day they announced they were shipping the other half of the order. I received both packages today. The free shipping must have come to a hefty amount, and this quote did in fact come to mind.

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