Clickbank aside, the first affiliate program/marketplace new Internet marketers and bloggers normally think of is none other than Amazon Associates. After all – it makes sense. Amazon is probably the biggest online marketplace for both digital and physical goods, and it makes sense to use their credibility and brand authority to your advantage.

However, there is one specific problem with the Amazon Associates program – a problem that turns out to be quite bigger than what you might think when you magnify it with a little bit of mathematics.

Shall we get into it?

The Commission Problem

If you haven’t read up on Amazon’s payment policies, you had better do so now. If you haven’t noticed, Amazon gives out a measly 4% commission on sales.

Four percent. One twenty-fifth. Are you sure that’s the kind of money you’re looking to earn? All that hard work with SEO, traffic generation, SMM and … four percent is all you get?

I dunno about you, but I don’t think that four percent is what I want to work for.

In all fairness, Amazon does increase the commission percentage once you’ve sent them a certain amount of sales. However, the maximum you could ever hope to earn per sale on nearly all Amazon products is 8.5%.

Referral Rates

Let’s Do A Little Math…

Nothing like a little math to brighten your day. Let’s get into a bit of the facts & figures behind Amazon’s program.

Let’s say that you’ve set a goal to earn $10 per day with Amazon’s affiliate program. For the sake of simplicity, let’s pretend as if you’ve already sold enough items to get your commission percentage upped to 8.5%.

Just to meet that $10/day goal of yours, you’ll have to sell $117.64 worth of goods, every single day.

Now, let’s be realistic and assume that you want a REAL side income – $50 day. You’d have to be selling $588.23 worth of goods everyday (and you’re still 4 cents short).

Suppose you want to make a real, passive income that you can live off of. Assuming you live in the U.S., let’s determine $100/day to be a liveable income. You’d have to sell $1176.47 worth of goods. Every. Single. Day.

If I’m making a turnover equivalent to $1000 or more every day, I want a little bit more of the action than a measly $100.

By the way, that elusive six figure income will only come after you register $3188.24 in sales every day.

But hey – there’s still a problem with actually getting those sales. It’s the cookie problem.

When Bob clicks on your affiliate link and visits Amazon, the techie things that power Amazon register a 24-hour cookie on Bob’s browser. Meaning, that if he purchases a product within 24 hours, you’ll get a commission. If he purchases a product within 24 hours and 2 seconds, you don’t get a commission.

Now here’s the problem – you have to be selling high-ticket items ($500+) to be earning a steady wage. However, people are usually a bit more apprehensive about throwing $500 away than throwing $5 away. They won’t buy on an impulse. They’ll wait, think about it, and then think some more.

By the time they’ve thought it through, the cookie has expired. However, Bob visits (not through you aff link) and purchases the product anyway.

Amazon & the product seller keep the money. You get none of the action, even though none of it would have happened without you and your hard work.

Alternative Affiliate Programs

By now, if you’re thinking that you might want to change your monetization strategy, I don’t blame you. But remember – you can make (decent) money with literally anything, although the effort required is a bit harder when you choose certain affiliate programs.

That’s not to say that Amazon Associates won’t work for you. Indeed, there are quite a few six figure marketers making a living off Amazon Associates. But I believe in distributing eggs in a variety of baskets, which is why you might want to take a look at a few alternative affiliate marketplaces.

Clickbank – Pretty much the affiliate marketing standard. The commission fee is set by the vendor, and the most common commission is 50%, although some products have 25%, 75% or even 100% commissions.

ShareASale – This marketplace isn’t half so popular as Clickbank, but it does the job for some people. Commissions are set by the vendor and are typically lower than that of Clickbank, at an average of 5%-15%.

CommissionJunction – I have very little experience with CJ, so I can’t say much about their marketplace or their commission percentages. It’s widely known and reputable, though, so you might want to consider checking it out.

Summing Up

Amazon – legitimate affiliate marketplace. You CAN make money with it. You CAN make a living with it. SHOULD you?

That’s your decision. Personally, I’m rooting for Clickbank for blog monetization (besides my own products – coming soon!).

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Image credit: SXC.HU

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