Earlier this year, Amazon announced that they would start paying sellers to send traffic to their Amazon listings. You heard that right. In an unprecedented move, Amazon is opening up the purse strings a little bit and sharing the wealth, and they are calling it the Brand Referral Bonus.
According to Feedvisor, out of 1,000 U.S. brands, 88% of brands are using some sort of advertising program in Amazon, which is an increase of 21% compared to 2020. Selling on Amazon is ever more becoming a pay-to-play environment, so the Brand Referral Bonus is a huge opportunity to allow Amazon to help pay for some of the advertising costs.
HOW IT WORKS
Your typical Amazon fees for selling a product on Amazon are 15% of the final selling price. This does vary for some categories, but 15% is the most common. That means for your $100 product, you will pay Amazon $15 just for the privilege of selling on their platform.
In addition, you will also pay Amazon for fulfillment (if you use FBA), as well as advertising on their platform. All of this can add up. For most sellers, you are doing pretty well if you keep 50% of your initial sale price, after all the fees and advertising.
That’s why it is huge news that under their new Brand Referral Bonus program, Amazon will now pay you 10% back, for any converting traffic sent to your listings using a unique attribution link that Amazon provides.
3 REASONS YOU SHOULD PARTICIPATE
- Amazon loves outside traffic. Outside traffic to your Amazon listings signals strong validation for your product. Amazon literally tracks every action on their site, so when a listing starts to experience higher levels of off-site activity, Amazon begins to reward that listing with better on-Amazon rankings and performance.
- New customers trust Amazon, where they might not trust your website. Let’s face it, Amazon is everywhere and is used by almost everyone. Making a purchase on Amazon is as easy as a click, and returns are painless. If are spending money on new customers, why not send that traffic to Amazon, where you don’t have to overcome any trust hurdles before making the sale?
- Look at it like a boost in your ad budget. How you spend it is up to you. You could advertise on Facebook, Instagram, Google, or you could target your already existing audience with a 10% discount, and send Amazon the bill.
POTENTIAL DOWNSIDES?
We know that Amazon would not pay for traffic if there was not a catch, right? So, how does this benefit Amazon?
The Brand Referral Bonus program seems to be specifically designed to draw even more traffic to the site, and to enlist an army of evangelical marketers willing to pay to send that traffic.
It’s really quite genius on Amazon’s part and positions them to take even more market share from competitors like Walmart and Google. But as for brands selling on Amazon, there really is no downside.
HOW TO IMPLEMENT A SUCCESSFUL OFF-AMAZON AD STRATEGY
There are several ways to begin taking advantage of Amazon’s generosity here. You could set up your attribution links and start driving traffic direct from Facebook and Google. The only problem here is that you wouldn’t be able to remarket to these people later.
An even more effective strategy would be to target your existing audience. This option would be the most cost-effective and could yield you a profit from the 10% Amazon is paying you. You already own the list, so you could remarket to these people, but the size of the list wouldn’t necessarily grow.
The most effective strategy, however, would be to build a sales funnel. Generate some traffic, serve up a nice offer to get their info such as a coupon discount, and then deliver them to your Amazon attribution link with coupon code in hand. This way, you can grow your list, contact them again and again, and have Amazon pay for it.
If you would like to discuss unique strategies for your brand, we’d love to help. Feel free to reach out and set up a free consultation. We’d love to help you make sense of it.