Affiliate fees are tough all over

On Monday, Apple sent out an email to people in its iTunes/App Store affiliate program to inform them that

We have completely updated our Affiliate Resources site, making it much easier for you to find the information you need. Check out the updated site and learn more about how to optimize your affiliate placements.

which is both dull and unlikely to be true. But further down there was news that piqued a lot of interest and was undoubtedly true:

Starting on May 1st 2017, commissions for all app and in-app content will be reduced from 7% to 2.5% globally.

Nothing starts the week better than seeing a revenue stream cut by 65%.

The Apple corner of the internet erupted with tweets and posts about the change. All expressed disappointment, but John Voorhees’s unexpressed disappointment in his short article at MacStories was the most poignant. John’s the developer of Blink, a very nice iOS app for automatically generating Apple affiliate links. So not only is MacStories losing a source of income from its app recommendations, but Blink has lost some of its appeal to prospective users—why even bother with affiliate links when we’re now looking at the double whammy1 of low app prices and low commission rates?

But Apple’s not the only online seller to cut commissions. A couple of months ago Amazon changed its commission structure, and I was a little surprised when none of the stories about Apple’s cut mentioned that.

Amazon has a byzantine commission structure, with significantly different rates for different classes of merchandise. Given that this is Amazon, I assume the rates are based on detailed analytics regarding price, profit margin, popularity, competition, and several things I haven’t thought of because I’m not a brilliant online retailer. Here’s the current rate table from Amazon’s affiliate policies page.2

Current Amazon rate table

Up until a couple of months ago, that commission structure also included something they called “other products,” a class of merchandise whose commission varied with the number of sales. Your rate went up the more sales you made per month. Here’s how that worked:

Amazon variable rate table

This table is no longer on Amazon’s web site; I pulled it from the Wayback Machine’s February 24, 2017 archive of the policy page.

Ebooks were covered by this variable rate table, but as of March they have a fixed commission rate of 4%. I have a particular interest in this because I often tweet out affiliate links to ebooks that Amazon has put on sale and that I think my Twitter followers would be interested in. No matter what the commission rate, you don’t make much money on $2 books, but even I’ve seen the effect of the rate change. In February, I got credit for $421.13 of ebook sales and my commission was $29.58. In March, I got credit for $106.88 of ebook sales (25% of February) and my commission was only $4.29 (15% of February).

My economic well-being doesn’t depend on affiliate links. The only reason I use them is to offset the costs of web hosting, domain registration, and my FastMail account.3 But others will be harder hit by these changes, and I hope they find new ways to keep going. I still think small web sites are the truest expression of the promise of the internet.

  1. It’s actually a triple whammy because the commission payment rules pretty much guarantee that some of your affiliate earnings will never be paid, a situation I wrote about a couple of years ago. 

  2. Amazon uses the word associate rather than affiliate, but I’m going to stick with the more common term here. 

  3. Yes, you see what I did there.