Jul 19, 2021
Amazon.com has introduced a branded referral bonus program that allows third-party sellers to earn a bonus averaging 10% of product sales for driving traffic to their Amazon listings from non-Amazon marketing campaigns.
In an announcement on the Amazon Service Sellers Forum, Amazon highlighted three benefits:
- “Help you accelerate your growth and improve the effectiveness of your non-Amazon advertising and marketing campaigns that drive your referral traffic to Amazon.
- Save money by receiving bonuses averaging 10% of sales from the traffic you generate on Amazon.
- Improve advertising effectiveness by receiving the same bonus for customers’ purchases of additional products from your brand for up to 14 days after clicking on the ad.
The bonus is provided in the form of a referral fee credit, which is the percentage that Amazon takes from sellers on its site. Fees have varied widely by category, but currently average 15 percent.
In the comments section of the ad, many sellers seemed skeptical about the program, with some worried that the bonus rate might be reduced eventually. A few have seen benefits as customers already trust purchases on Amazon.
For Amazon, the move comes as retailers have stepped up their efforts online during the pandemic with Walmart, Google, Target, Kroger and Instacart busy recruiting third-party sellers in their online marketplaces. Facebook, Instagram, and TikTok also promise bigger ecommerce campaigns.
Talk to Advertising ageJames Colon, general manager of integrated media planning at OMD USA, suspects that in addition to bonuses, brands that redirect external traffic will gain a high place in organic search on Amazon. Mr. Colon said, “Amazon will place more weight on the share of traffic to product pages and sales generated off-site.”
In one blog entry, Katie Capka, head of inbound marketing at Kaspien, which provides software for marketplace sellers, said that in addition to newer tools such as A + Content, Amazon Attribution, Amazon Affiliates, Amazon Associates and Amazon Live, the Brand Referral Bonus is part of the company’s efforts to make its platform less transactional. She wrote that Amazon will increase “its value proposition” by allowing buyers to “engage with brands in a relationship and transactional manner.”
DISCUSSION QUESTIONS: In your opinion, what is behind Amazon’s brand referral bonus and is it a threat to its competitors online? Do you see more advantages or disadvantages for third-party sellers?
“If it helps your business grow, use it. Otherwise, don’t. “
“It’s a smart move by Amazon. Many brands are reluctant to divert ad traffic from their own websites.”
“Amazon is engaging its stakeholders in their battle against other e-merchants. It’s a smart move.”