The Amazon Associates program pays up to 8.5% commission on sales that result from your advertising efforts on your blog (as an affiliate). This is an easy way to make passive income, and represents a big chunk of our income over at 100 Days of Real Food. I’m not going to lie…it’s pretty bad ass.
Why is Amazon’s Affiliate Program so Great?
Well, in part because Amazon is so great. People trust Amazon. It is super convenient. The people at Amazon are masters at upselling. As an affiliate blogger, you make money on the total basket, even if the buyer purchases something totally unrelated to the product link they followed from your blog (you promote a coffee cup, they buy a flatscreen TV…bonus!).
Many people, like me, are addicted to Amazon Prime shipping and are in the habit of purchasing from Amazon, which makes for great conversion rates. I’ve compared Amazon’s performance to other merchants through CJ.com, Shareasale.com, Skimlinks.com and direct affiliate partnerships, and let me tell you, Amazon blows them all out of the water. Bottom line, we have a 10% conversion rate on clicks to Amazon. 10%!!
By the way, if you aren’t a Prime member, you should be! It saves you so much time. That’s time that you could be spending on your blog. I signed up for the free trial to get a laptop overnighted to me on vacation (with all intentions of canceling), but now I’m hooked! It’s like having a personal shopper to pick up office supplies, gifts, and so on. Using Prime is totally a good time management strategy.
Big News for North Carolina Bloggers
2/12/14 update: Amazon has in fact changed their operating agreement and removed NC from the list of banned states. That’s great news!
Beginning February 1, 2014, Amazon will begin collecting NC sales tax. Why does that matter? In my opinion, it is extremely likely that the Amazon Associates program will be reinstated in NC as a result, which could mean easy money in your pocket. Now that being said, Amazon customer service had this to say this morning when I asked them about it,
Thank you. At this time we do not have any additional information on how this will affect the Associates program, as we are still looking into it. If we are able to re-open the program to North Carolina residents we will notify the members whose accounts we had previously closed.
Of course they said that. But I had to try to get the scoop, right? 🙂 For you NC bloggers out there, I recommend you bookmark the Amazon operating agreement (or this post) and check it regularly starting February 1st. Scroll down to section “2. Enrollment” and look for changes in the last paragraph for the list of banned states.
Sales Tax and Eligibility for the Amazon Associates Program
So what does sales tax have to do with your eligibility for the Amazon Associates program? Let me connect the dots.
- Since Amazon has no offices in NC, they don’t have nexus (a sufficient physical presence). This means they don’t have to collect sales tax for sales in NC, which makes their pricing more competitive then a local brick and mortar retailer. That’s a competitive advantage.
- Obviously NC wants Amazon to collect sales tax. As reported by The Charlotte Business Journal, “In 2012, the state Department of Revenue estimated North Carolina was losing as much as $214 million in online sales taxes each year.” Think of all the stadium renovations you can get for $214 million! (or schools…just saying).
- But NC, taking a lead from NY, argued that Amazon Associate Program participants (aka Amazon affiliates) living in NC constitute nexus. Therefore Amazon has to pay NC sales tax on ALL sales to NC residents (not just on the sales from the NC affiliates!).
- To avoid this, Amazon banned the Associates Program in NC. They’ve done the same thing in many other states, causing some people to lose their livelihood overnight.
- Now that Amazon has agreed to begin paying NC sales tax (I’ve read no reports as to why…), it seems extremely likely that they will lift the ban on the Associates Program in NC soon to gain all those additional sales from affiliates.
So that last bullet point is very important. We’ll have to wait and see what happens, but this is definitely good news for NC bloggers.
Wait a Minute..So How Have You Been Earning $ Off of Amazon in NC?
Yes, we live in NC. Lisa started making money off of Amazon almost by accident. She dropped a few links in some post using her parents account just to experiment. We kind of forgot about it really, but then a few months later her parents asked her “what are we supposed to do with all this money?” Back then it was only a few hundred dollars a month, which we were super excited about, but honestly once I became aware of the income I immediately thought this can’t go on. We have to (and did) account for that income so as not to commit tax fraud.
So I attempted to open our own Amazon Associate account and realized NC, as well as about a dozen other states, were banned from this program. What?? This did not bode well for my desire to increase blog income and quit the day job. I did a ton of research and figured out we could still generate income through Amazon so long as we used Skimlinks as an intermediary. Skimlinks is in the UK (they have a San Francisco office as well), and they work with 14,000 plus merchants, including Amazon.
Skimlinks is a viable option for many bloggers wanting to become affiliate marketers without all the headaches of tracking individual affiliate links across many merchants, but note it is no longer a workaround for generating income from Amazon in banned states. As you can see in the plot below, we were able to grow income as we gained both traffic and experience with affiliate marketing.
Now keep in mind Lisa’s site gets a lot of traffic so our earnings are atypical, but I will say Amazon has consistently been a big chunk of our income since early on. It just keeps growing with traffic. It’s a great way to make some extra cash almost automatically, and as you add more and more content to your blog with affiliate links, your income grows from traffic to posts both old and new. That is the great thing about it. It’s like each post is a tiny investment in future income.
Adapting in an Ever Changing Environment
In June of 2013, I noticed our Amazon affiliate income was down about 30%. Alarmed, I phoned Skimlinks and learned that yeah, Amazon commission rates had been cut (through Skimlinks) and oh yeah, Amazon is enforcing their operating agreement’s list of banned states on intermediaries like Skimlinks in the near future. Yikes! The cash spigot was about to be turned off. No more Cristal for the Leake’s! (totally joking…the fridge is stocked!)
3/28/14 update: Despite talking to multiple Amazon support reps who said using Pretty Link was OK, today I spoke to a supervisor who confirmed that it actually violates the operating agreement (so don’t do it).
So ensued a painful process of mapping all our Amazon links to alternative merchants and keeping track of them all using the Pretty Link Pro plugin for WordPress (which I love and use on both 100 Days of Real Food and Pro Blog School). It was a nightmare going back through 500+ pages/posts, even with the help of two VAs, and income was WAY down using the alternatives.
So I spent a good deal of time and money analyzing the Amazon operating agreement with an attorney and ultimately decided to reorganize our business outside of NC. I’m not a lawyer so you should not take this post as legal advice, and this route does carry some risk. But again, hopefully this will all become moot soon enough should Amazon reinstate the program in NC as I predict they will.
Our Top 10 Pages for Amazon Sales
I thought this list would be helpful for those of you looking for examples on how to position affiliate products effectively. Now before you jump down and read the list, you have to listen to my lecture.
- Don’t just emulate what we (or other pages) are doing but rather use the list to help understand how you can sell products on your blog to your audience.
- The key with affiliate marketing is to be authentic and natural. This is not some tactic we read about, this is just how we operate, but it does instill trust and improve conversion.
- Talk about products you actually use and recommend. People actually value a legitimate product review, and providing examples of the product in use can make people want to buy.
- Don’t push a product just to make money. People will see right through that!
- Make sure you register your Facebook page (and any other pages you will be sharing affiliate links on) in your Associates account settings. You don’t want to get kicked out of the program!
All right, enough of that. Here are our top 10 earning pages of all time.
You may also want to check out this post about how we make money online since it touches on Amazon as well.
So what’s your story? Have you had success with affiliate programs? If so, share as many details in a comment as you are willing so we can all learn.