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What is Amazon Associates?

March 29, 2005

Currently, there are many reasons why Amazon is a solid e-commerce business model. The strength, flexibility and longevity of its affiliate program is one of them. Like Amazon itself, Amazon Associates has evolved over the years and presently offers a number of different opportunities for affiliates.

The Amazon Associates program allows affiliates to build links to Amazon content and merchandise with an embedded affiliate tracking code. When a user actually buys something from Amazon, the affiliate gets a percentage ranging from 4 percent all the way up to 10 percent (depending on a variety of options I'll discuss). Affiliate links can be built via Amazon Associates online tools or via Amazon's E-commerce Service (formerly known as Amazon Web Services) which provides a more direct data feed for Amazon content for Web site integration.

Getting started with Amazon Associates takes less than 5 minutes. Visit the signup page and fill out the required fields (name, address, payment info, Web site address, etc.) and you'll get instant "temporary" approval for your Associates account. After granting you temporary approval, Amazon staff supposedly reviews your site to see if it meets their eligibility requirements (basically any site that doesn't infringe on copyright, trademark or is offensive) and then they'll email you to confirm that you've been officially accepted into the program.

Amazon currently offers two different payment schemes that you can choose from: Classic and Performance. Though, in reality, Classic is hardly a choice that makes sense. The Classic payment schedule pays a flat 4 percent on items purchased after a visitor clicked through from an Amazon Associates placed link.

The Performance plan starts at 5 percent and ramps up based on the shipped volume of products. If your affiliate links generate between 1 and 20 units shipped you'll get the starting rate of 5 percent. On the other end, if your affiliate links generate shipments of over 10,000 units you'll get 7.5 percent. On top of the base rate (indexed to products shipped), Amazon's Performance program also tacks on bonuses of 2.5 percent for certain "Direct Link Items" and a 1 percent for "Easy Links."

Needless to say, I strongly recommend that users choose the Performance plan if they want to maximize their affiliate earning potential. It is usually the default option anyway, but it's important to make sure.

Amazon also offers three different methods for getting paid for your efforts helping them sell stuff, though, again, the choice is really quite clear. You can have a check mailed to you, get an Amazon gift certificate or have your earnings directly deposited to your account. The check option involves an $8 dollar handling fee, so I'd recommend avoiding that. The Gift Certificate option offers no additional incentive because it locks you into keeping your money with Amazon. So, if you've entered the affiliate game to earn money, direct deposit is definitely the way to go.

The real "magic" in generating revenue with Amazon Associates is all about choosing the right type of link, for the right product(s) and putting it in the right context.

Amazon currently offers 5 different types of links through its web based interface ("Build Links"):

-- Product Links which link to specific Amazon items;
-- Text Links which allow you to directly link to any Amazon page;
-- Recommended Product Links that automatically shows relevant products;
-- Banner Links which don't link to any product directly and are mostly Amazon promos;
-- Search Box which provides search capability.

If your goal is to maximize your affiliate earning potential you're going to want to choose the link types that offer the highest potential reward which means you should create links that first offer you a shot at the 2.5 percent direct link bonus (which would provide you with a combined referral rate of 7.5 percent to start).

Direct links (as the name implies) are ones that directly link to a specific Amazon product detail. Beyond just the plum of getting the 2.5 percent bonus, having context/content relevant direct links is also likely to increase the click-through from your site to Amazon, since relevance is always a key factor to generating any type of click conversion.

Amazon direct links can be simply created via one of three principal methods: the Product Links option (in the "Build Links" menu on Amazon Associates), using Add to Cart buttons or creating product links via Amazon Web Services.

The "Product Links" option is perhaps the easiest method to execute as the web interface allows you to browse for your desired product as well as automatically creating the HTML code that you'll need to place in your site. The Product Links option also includes a "Buy from" button that will automatically add the item to a user's cart. There is also an "Add to Cart" direct product link that you can use (you'll have to manually insert your Associates ID as well as the product identifier into the code) without getting the product detail/picture from Amazon, in case you want to embed that function directly into your site in a different way. (Say, for example, you've got a review of product X and you want to enable users to "add to cart" from inside the review.)

The other way to create affiliate links to Amazon is via their E-Commerce Service, XML based web services offering.

When Amazon Web Services was first offered, it was probably a bit too complex for the average associate to execute. That's no longer the case with a number of freely available scripts that will allow you to enjoy the benefits of web services without the development overhead. With ECS you can directly integrate a feed of whatever available data you want from Amazon into your site, which makes the buying experience more seamless to your users (and thereby more likely that they'll click through and/or add to cart to make a purchase). One such freely available ECS script is Mr. Rats Amazon Products Feed script, which will allow you to implement the data feed with a relatively straight forward Perl script.

For those who want a quick php solution, Jaaps' Amazon Scripts provides a few options as well.

Amazon Associates also provides a robust reporting mechanism to help affiliates track their link performance. The main Associates interface provides reports that will gauge clickthroughs, conversions, orders, shipments, as well as affiliate revenue earned. Beyond what exists on itself, Alexa (which is also an company) offers a number of services to help affiliates optimize their Amazon Associates performance. In my opinion the most basic and most critical is the site report function will which will crawl your site and ensure that all the Amazon affiliate links are actually working.

Again, as a typical e-commerce best practice, it's always a good idea to actively track how your links are doing and if something isn't working right then adjust it. If something is working exceptionally well, than duplicate it in other spots to increase your success.

One drawback of Amazon's reporting scheme, however, is that it fails to notify you of any cancelled or returned orders.

The key (as with any e-commerce offering) is always about context and relevance. Users will tend to click on a button/item if it is relevant to what they need or want. If you can identify those products and place links to them in the context of where the user is likely to make a "relevant" connection, you'll be more likely to generate a click-through and possibly a referral commission. In order to maximize your Amazon Associates revenue potential, it makes sense to make sure that you're signed up for the Performance plan and that you make use of high value links that will yield greater revenue if clicked. It's hard enough to get users to click on links as it is. If a user actually clicks on one, you might as well make sure that it was worth the effort.

With a bit of hard work and solid contextually relevant links the Amazon Associates can be a rewarding affiliate venture.

Source: eCommerce Guide

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