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Amazon Sellers Weigh Pros and Cons of New Referral Program

Amazon Sellers Weigh Pros and Cons of New Referral Program

Amazon launched a new program to reward brands for driving sales on its marketplace. Similar to its affiliate program, the Brand Referral Bonus program gives participating brands an average 10% credit on sales resulting from their off-Amazon marketing efforts. (Eligible brands have the option of participating in either program, a spokesperson confirmed.)

Brands earn the bonus – in the form of a credit on their referral fees – on purchases that occur within 14 days of a customer clicking on an ad. Participants will use Amazon Attribution to measure the Amazon sales driven by their non-Amazon marketing efforts.

The Brand Referral Bonus is available to brands that sell in Amazon’s US store and are enrolled in Amazon Brand Registry. The bonus is only applicable to sales on a brands’ own products.

In announcing the program, the head of Amazon’s Brand Program and Selling Partner Development Mike Miller said, “With more than 300 million customers worldwide, Amazon is one of the best places for brands to launch new products. We’re launching the Brand Referral Bonus to help brands make their marketing spend go further. When brands direct their non-Amazon marketing traffic to our store, we’ll provide them with a bonus averaging 10% of the applicable sales.”

In discussing the program on the discussion boards, Amazon seller “Summer.glau” summed up the pros as follows:

“Hmmm, so if I bring my non-Amazon buyers (say from our own webshop) to Amazon, I get 10% back from the referral fees of 15%.

“Overall, this may help to get higher return on ad spend since people would trust buying from Amazon more than from a random webshop. Also, the 5% difference is not all that much considering card fees and other costs of running your webshop. Overall, looks like a win-win. But coming from Amazon, can’t help but to wonder ‘what is the catch’ ?”

Amazon seller “PureDesignOnline” summed up their concerns about the program:

“Let’s see. I pay essentially credit card fees + 1% on my webstore. I have full control over returns (including fraudulent returns, which are non-existent on my www site), and I don’t have to go through a massive time sink with broken automation and undertrained CSRs to have a shot at getting what my platform promises, meaning my ROI is higher outside of fees. I don’t have to worry about my money being held hostage, black hat sellers on my listings, ASIN mis-merges, etc. etc. etc.

“However, if I move the sale to Amazon, I pay 15% – 10%, which is more expensive than my platform, and help Amazon complete the Walmartification of the internet, putting my web store out of business. FUJB.”

Another seller, Aquaponic_Lynx_LLC, summed it up succinctly:

“IF you would be doing non-amazon advertizing to send customers to your Amazon listings anyway, then yea wonderful (while it lasts anyway.)

“But if you are spending your off amazon advertising to send business to your own store or another platform and finding that profitable, I would see no reason to change just because of this.”

If you’re a brand-owner selling on Amazon, let us know what you think of the new program and if you plan on participating.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.