Is Amazon's Affiliate or Associate Program A Scam?
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Amazon, a fortune 500 company, has been in business since 1995 and has grown to be a substantial and formidable company. Amazon offers a wide and varied selection of products ranging from electronics, books, toys, apparels, grocery to movies, jewelry, computers, etc.
Amazon carries and sells its own products and offers to sellers a platform to showcase and sell their products in exchange for a fee. According to YAHOO! FINANCE, in 2009 Amazon's net sales increased 28% to $24.51 billion, of which the last quarter of 2009 accounts for $9.5 billion. For the long and short of the report, read: Amazon.com Announces Fourth Quarter Sales up 42% to $9.5 Billion
Amazon's Net Sales and Net Income 2006-2009
Net Sales
| Net Income
| |
|---|---|---|
2006
| $10.711 billions
| $190 millions
|
2007
| $14.835 billions
| $476 millions
|
2008
| $19.166 billions
| $645 millions
|
2009
| $24.509 billions
| $902 millions
|
If these figures and historical performance are any indications, Amazon's business has been steadily booming, growing by leaps and bounds. All one is asking for, as an Associate, is one's fair share of the wealth one's hard work and contributions have generated and created.
Amazon is also a worldwide company. Although based in Seattle, Amazon is also in the UK, Germany, France, Canada, Japan and China. Amazon's latest 2009 acquisition is Zappos. As one can see, the company carries a lot of economic weight and wields financial sway.
The aim of this article (hub) is not to disparage, libel, defame, tarnish Amazon's image, or portray it in a negative light, but rather to take issue with its unfair business practices and policy vis a vis its Internet Marketers (referred to as Associates by Amazon), whom Amazon relies on heavily to promote its products and for its internet ubiquitous presence. Reputation, in business, does matter ultimately. Mistreating the very people, i.e. Associates, you depend on for the promotion of your business, will, in the long run, hurt your business and be detrimental to your bottom line. Amazon could not have grown to a behemoth without the constant and active promotion of its products and sites by its Associates and consumption by its Customers (Associates are Customers and Sellers too!). So, when a referral fee is rightfully earned, Amazon should and must not use electronic subterfuge and trickery to so deprive the referring party. That is my bone of contention.
Amazon's Affiliate Program, also known as Amazon's Associates Program or Amazon Associates, offers to Internet Marketers the opportunity to link context and content-related, or relevant products to Amazon's sites in exchange for a referral fee ranging from 4% - 15% when a conversion (purchase) is made. In order to do so, Amazon issues an Associate ID
In theory it's a great concept. It's a win-win-win arrangement. Thanks to traffic driven to Amazon's sites by the Associates' hard work, a sale (conversion) is made. Amazon credits a referral fee (4%-15%) to the associate's account for the sale: Associate wins. Amazon pockets the balance: Amazon wins. The customer is happy: Customer wins. It's a love feast: everybody is happy, right? Wrong.
The associate (Internet Marketer) in practice, stiffed and robbed in the process (most of the time), is viewed by Amazon (in my opinion) as an idiot who works and toils tirelessly and feverishly to bring traffic to Amazon's sites, and yet when the transaction is consumed (conversion), Amazon finds some technicality and electronic subterfuge to wrongfully deprive the associate of the rightly, fairly and justly earned referral fee. Now, remember: without the internet marketer's (associate) contents, research and recommendations, it is unlikely that the sale (conversion) would have taken place at all, and yet when it does occur (sale originated from associate's link), not even a link-related transaction trace is left behind to account for the associate's contribution. Referral fee is not credited therefore.
The minute the costumer or reader clicks on the Associate's link which takes him/her to Amazon's site, the technicality and subterfuge, the walk-a-straight-line, the walk-on-egg-shells, the customer straight jacket policy (unbeknown to the customer) are on. The fix is in. The purpose of all those contortions, technological acrobatic maneuvers and hoops to jump through is to deny and deprive the Associate of his/her fair share of the transaction, which would have not taken place without the Associate's involvement and recommendations to begin with.
Let's examine the following scenario and, as an Amazon marketer, you'll realize that all along, thanks to Amazon's unfair policy vis a vis Associates, Amazon has been robbing you blind without living a trace or digital fingerprint that you know of.
For illustration's sake, let's say you write an automotive-related article and link an automotive-related product to Amazon's site. The reader who was not previously an Amazon customer, clicks on the link and opens an Amazon account.
Thanks to the Associate's referral, Amazon gets a brand new customer, whom it will derive and generate income from for life, based on subsequent purchase (s) without giving you, the Associate, the benefit of recurring and residual income, nor the credit. Worst yet, your account may not be credited at all for the customer's initial purchase (s) if strict conditions are not met. If the referring customer hops from one product to another, forget about the likelihood of getting credited for the ultimate sale. Amazon gets a brand new customer for life. A source of revenue and income for life. The Associate gets nothing. For life. Chances are that this brand new customer will bypass and forgo your web site(s) or links altogether on his/her next purchase and go straight to Amazon's bookmarked sites.
I liken it to referring your buddy to your favorite mechanic. The mechanic gets a brand new client for life, and you, the referring party, gets nothing out of and from it. For life.
REMEMBER: ONCE AGAIN, WITHOUT YOUR CONTENTS, RECOMMENDATIONS AND REFERRAL(S), THE SALE WOULD HAVE NEVER TAKEN PLACE TO BEGIN WITH, AND YET WHEN IT DOES OCCUR, Amazon FAILS TO CREDIT (most of the time) THE ASSOCIATE'S ACCOUNT FOR IT.
Amazon's referral system tested
Amazon's referral-crediting system was tested 5 times. Here are the results of the experiments:
The system failed to credit the associate's account 2 out of 5 times. As pointed to Amazon, given the sheer volume, scope and magnitude of transactions taking place at Amazon on a regular basis, if the system were to fail to credit Amazon's account 40% of the time (2 out of 5), the company would be out business by now and have never grown to be the giant that it is today. It would have never experienced any growth at all. If that colossal rate (40%) of account-crediting failure is unacceptable to Amazon's account, the same should hold true for Associates' accounts.
Experiment No. 1
Subject clicked on Amazon product link (on Associate's site), which took subject to Amazon's site. Once there, subject clicked on and purchased item. Associate's account is credited for purchase.
Experiment No. 2
Subject wanted to purchase a second identical item. Subject, instead of making purchase right then and there on Amazon's site, went back to referring site, clicked on Amazon product link, which took subject back to Amazon's site, subject clicked on and purchased item. Associate's account is credited again for purchase.
Experiment No. 3
Subject clicked on Amazon product link, which took subject to Amazon's site. Once there, subject clicked on and purchased item. Associate's account is credited for purchase.
Experiment No. 4
Subject wanted to purchase a second identical item. Subject , after making first purchase, in this case, instead of going back to referring site (as that was the case in Experiment No. 2), purchased item right then and there on Amazon's site. Associate's account is not credited for second purchase.
Conclusion drawn from Experiments Nos. 3 and 4: Amazon got 2 sales from the referral, Associate's account is credited for only 1 sale. Associate's referral fee, cookie(s) or tag associated with referral link suddenly vanished, magically disappeared in Experiment No. 4. Associated has been robbed blind. Now, imagine if only 1 out every 2 transactions (50%) were credited to Amazon's account, the company would be bankrupt by now.
According to the terms of the "Associates Program Operating Agreement", Amazon can extract as many sales as possible from the initial referral and credit the Associate's account for only 1 sale (I am paraphrasing). This is pointed out to highlight the unfair nature of the Amazon/Associates rapport and relationship.
Experiment No. 5
The straw that broke the camel's back. Subject clicked on Amazon product link (on Associate's site), which took subject to Amazon's site. Once there, subject clicked on and purchased item. Associate's account (unlike Experiment No 1) is not credited for purchase.
The bar is set so high, even when Associates play by Amazon's own rules (Experiment No. 5), they cannot win or beat Amazon at its own game, i.e. denying and depriving (most of the time) Associates of their rightly earned referral fees.
As Associates, you are at the mercy of Amazon's technical wizardry with respect to reports of sales and resulting credits, for there is no independent third-party tracking, verification or accountability system that I know of. If anyone knows of any, please feel free to enlighten me. Amazon is judge, jury and executioner.
Most Associates feel used, misused and abused.
Amazon's explanation and response, when challenged with this blatant discrepancy and inaccuracy?
The order was checked, verified and was not tagged to Associates account. Therefore, Amazon is not able to provide advertising fees for this order.
Other elements of explanation furnished by Amazon:
"- If a customer realizes that they forgot to place their order through an Associate link, and clicks back through an Associate's website after they already placed an item in their shopping cart, then the item in the cart will not be tagged.
- These items may have already been in the customer's shopping cart from a previous visit to Amazon.com. Items stay in the shopping cart for 90 days. If a customer tries to place an order for the same item and it was already in their shopping cart, our system is set up to not record the same item twice and will default to the first time the item was added to the cart.
- If they update the quantity (i.e. from 1 to 2 items), only one item will be tagged to the Associate account. This is to help ensure that we avoid duplicate orders and customer misunderstandings.
- If they visit a different site after clicking on your link, the items could be tagged to a different Associate. Each item is tagged only if it's added to the cart during the 24-hour shopping session that begins when your link is clicked. That session ends early if the customer completes an order or clicks through another site."
What's wrong with this picture?
1.- Had Amazon had a recurring and residual income model and policy, when the client first signed up as Amazon customer as a result of Associate's link and referral, Associate would not have to worry about cookie (s) or tag (s). Associate's account would have been credited every time the event takes place, i.e. a sale.
2.- Subject was not a prior customer of Amazon. Subject became Amazon's customer at the urging of Associate. Initial and subsequent purchases are made, based on Associate's contents, product research and recommendations.
3.- Experiments Nos. 1 and 5 are identical, and yet yield different outcomes
4.- If the system, based on the outcomes of the experiments, failed to credit an Associate's account 40% of the time (2 out of 5), can one imagine the number of alleged transactions (For the record, I have no personal proof or evidence of any transactions that have taken place. My conjecture is an extrapolation based on the outcomes of and the conclusion drawn from the experiments.), thanks to your referrals, that have occurred, without leaving any electronic referral trace (unbeknown to you)? Your Associate account is not, therefore, credited for any.
5.- The aforementioned reasons given for not crediting referral fees, while plausible in most cases, are fallacious and specious in my case, for none applies to Experiment No. 5. I do not buy any of it.
Based on the outcomes of these experiments, Associate came to the following conclusion:
Unless and until Amazon institutes and implements a fair, just and balanced referral program and policy vis a vis Associates, Associates should discontinue and cease promotion of Amazon products and sites. Associates should no longer be counted as soldiers among the armies of idiots and fools (my opinion) who are feverishly and passionately promoting Amazon products and sites and yet cannot, thanks to Amazon's electronic ruse, subterfuge and ploy, benefit from a conversion (sale) when it does occur. Associates should refrain and abstain from doing the marketing heavy lifting to promote and drive traffic to Amazon's sites, for Amazon's sole benefit.
If, as an Associate, you are pleased with Amazon's treatment, please disregard any misconstrued anti-Amazon stance taken here. Keep extolling the virtues and singing the praises of Amazon's referral program.
If, on the other hand, you fell prey to Amazon's business practices and policy, it's within your right to express and make known your displeasure, discontent and dissatisfaction, demand better treatment and, if no positive response is forthcoming, cease being a marketing fool and advertising puppet to the benefit and enrichment of Amazon, and the detriment and impoverishment of your own financial well being. Do not underestimate your power, for you, as an Internet Marketer (Associate), provide an invaluable service to Amazon's bottom line. If it were not so, Amazon would have done away and discontinued its referral program.
Stop being a pawn in Amazon's marketing chess game, a game whose outcome you have no control over as it relates to crediting your Associate account for earned referral fees.
If each and every Associate, negatively impacted by this flawed referral policy, were to take a collective stance against it, Amazon would have no choice but to address your concerns collectively.
If you've been victims of these sleazy business practices, as Associates, here is the opportunity to get it off your chest. Vent and ventilate. Rant and rave. Join Hubpages now!
By screwing Associates, Amazon incurs the risk of losing a multiple streams of income, and the negative impact on Amazon's bottom line is 3 folds:
1.- Associates, through hard work (promotions, research, reviews, contents, ubiquitous presence and referrals) generate sales. Screwed Associates become idle marketing-wise and generate no more sales. Consequently, sales will likely plummet. Amazon's bottom line takes a hit, sale-wise.
2.- Associates, as Customers, rather shop the competition. Amazon's customer base shrinks (much to the delight of its competitors) and Amazon's bottom line is adversely affected customer-wise.
3.- Associates, as Sellers, explore alternative venues, avenues and platforms to display, showcase and sell their products. Amazon's bottom line is negatively impacted fee-wise.
By addressing Associates' concerns in a fair, just and equitable manner, Amazon stands to gain. Not lose. Happy Associates make for happy Customers and happy Sellers. Amazon's bottom line expands and grows exponentially, not shrinks. Failure to address this issue will result in Amazon's alienating Associates, Customers and Sellers alike.
Again, the goal of this article is not to denigrate, tarnish Amazon's name or image in any way, shape, form or fashion. It is simply to bring attention to and shed light on an unfair business practice, which, in my opinion, will be detrimental to Amazon's interest in the short and long run, were it to fail to address it, take the proper and correct course of action to remedy a flawed referral policy.
My stance is not anti-Amazon Affiliate Program per se, au contraire. I take issue with its make-up rather. It is structured in a way and fashion to maximize Amazon's rate of return on Associates' investment of time, energy and work; and minimize the likelihood of Associates' accounts getting their due credit (more often than one would care to think, based on experiments, Associates' accounts are not credited). The deck is stacked against the Associates, whose tireless promotion of Amazon's sites and products makes it possible for the company to rake in billions in net sales and millions in net income year in, year out. Reward and recompense must be commensurate with the depth and breath of work, not inversely proportional (the more one works, the less one is remunerated).
If and when Amazon does decide to change its referral policy vis-à-vis its Associates with more equitable, commensurate and favorable terms, at which point, yours truly will be more than happy to promote Amazon's products, sites and services. Until then and further notice, my hubs are, from this moment onward and forward, AMAZON◊ PROMOTION (PRODUCTS AND SITES)-FREE ZONES. The door is, however, left ajar if positive changes are made to the referral program.
In light of these observations and based on the outcomes of the experiments, I am prompted to ask: Is Amazon's Affiliate Program A Scam aimed at denying and depriving (most of the time) Associates of their hard and justly earned referral fees -thanks to technicality, technological subterfuge and ploy- (be they aware of it or not) after they've tirelessly and slavishly toiled to drive traffic and conversions (sales) to Amazon's sites?
This work is licensed under the Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States License. To view a copy of this license, visit http://creativecommons.org/licenses/by-nc-nd/3.0/us/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.
◊All brands, trademarks or trade names are the property of their respective owners.
Every effort and attempt has been made to provide accurate information. Under no circumstances can the Author be held liable or accountable for inaccuracies, if any. Readers are advised to their own due diligence.
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♦Best Wishes- Reach Your Goals♦ ♦Is Amazon's Affiliate's Program A Scam?♦
CommentsLoading...
Congratulations Justin for making it to the eclectic club of the privileged many: the club of the abused, exploited and robbed Amazon Associates/Affiliates!
It's a club made up, in Amazon's view, of an army of idiots and imbeciles who keep promoting Amazon's products and driving traffic to Amazon's websites for close to nothing, zilch, zero, nada, nil; much to the delight of Amazon's bottom line.
Hats off to those brave souls who perpetuate this insanity, but the rest of us needs to be paid, remunerated and compensated for our hard work.
Unfortunately, those behemoth companies understand and respond only to the following language:
1.- Bad publicity and embarrassing/nightmarish public relations (PR).
2.- Stop promoting their products and driving traffic to their websites for free, and
3.- Discourage and dissuade (short of an outright boycott) friends and foes, close and extended families from patronizing those unscrupulous companies, with dubious business practices.
Then- and only then- will they get the message.
Bottom line: Hit them where it hurts- their bottom line.
No wonder Amazon stands ready, willing and able to give you a free store, if you have your own website, without giving away the store.
Thank you for your comment which, if substantiated, proves and corroborates my stance- against Amazon's unprincipled and dishonest business practices vis-à-vis its Associates/Affiliates- as being not that of a lone dissenting voice screaming at the top of its lungs in the wilderness of ex-victimized and shamelessly exploited Amazon Associates/Affiliates.
I also want to point out that if a referral has an item already in their wishlist before clicking through an associate link, the associate will not get credit for the purchase of that item. Just so you all know.
Thank you JB for your input.
Good to know the deceptive nuances and intricacies (sophisticated roadblocks) which will most likely result in, keep and prevent an Amazon Affiliate/Associate from ever earning and seeing one red cent for his/her hard work.
Thanks again.
Since I joined amazon associates, I had in my account 8 GBP earned.
Now, when i check reports for all these years... i have no money anymore in my account.
But where is my current money from my amazon account?
I would go even further and say that the Amazon affiliates scheme is knowingly fraudulent. I have undertaken detailed analysis of my orders and earnings through the scheme and it is quite evident that they do not reflect any natural stochastic pattern. However, all the data suggest that Amazon are deliberately defrauding their affiliates by choosing not to tag all of the orders made through affiliate links. Until their systems are independently audited and the results broadcast, I would have no confidence in the scheme. Amazon appear to be commit a fraud on a monumental scale. Unless their get their act together and start behaving in a more ethically minded way, they risk facing court action and public censure on a scale they cannot dare to imagine.
Thank you Nick Adams for your input.
You are absolutely right about the absence of an independent third party processor. One would think that a company of the scope and magnitude of Amazon would, for transparency's sake and good public relations, employ the services of a third party processor to keep Amazon and its affiliates accountable. But, the existence of a third party processor, with respect to Amazon, turns out to be wishful thinking on the part of its affiliates. Amazon's affiliate tracking system is in-house for one reason- and one reason only(apparentlY): to screw up, exploit, and rob blind its affiliates of their earnings.
Nick, you are also absolute right about the need for third party processing. Absent it, free range is given to Amazon to play judge, jury, and executioner with affiliates' earnings.
At the risk of sounding like a broken record, those gargantuan companies respond only to:
1.- Class action suits (as you, Nick, pointed out), and
2.- Boycott and Bad (truthful) PR. Do not patronize them (shop the competition), and let everybody know of their mischievous and unscrupulous corporate practices.
Finally, to you, or anyone, as affiliates: stop (a revolutionary act) promoting Amazon's products, and dissuade and discourage anyone from doing business with them, until they (Amazon) get their act together (scrupulous business practices) vis-a-vis you: the affiliates. Trust me, your content, as a vehicle to promote Amazon's products, is precious, priceless and invaluable to leeches. It is like blood to vampires.
Once again, the aim of these apparently vitriolic, but factual, statements is not to disparage Amazon, but to vent our anger, and express our displeasure and disatisfaction with a company, whose unscrupulous policy toward its associates/affiliates incurs the risk of tarnishing its reputation, blemishing its image, and alienating its customer base (affiliates are customers too!).
Let's hope these rants and rave will be heeded to, and be sufficient enough (not a lawsuit) to bring about the sorely needed fair affiliate policy changes at the corporate level, before things get out of hand.
Our ultimate goal is to bring Amazon into the fold of corporate decency.
I have been with Amazon and Ebay for a long time. I have NEVER received any of this BS from ebay. Amazon however defrauds its associates like clockwork. this is a sign of a failing business. they try to pay associates less because their program is dieing.
they are also trying to attract leads by paying commissions. this is BS. if they want leads, they should pay us for leads. they want to get the customer and shut you out.
Amazon wants you to funnel customers and drive traffic to its web site for nothing. Even those armies of idiots and imbeciles who used to promote Amazon products and site are seeing or have seen the light. Their unscrupulous practices vis-a-vis their associates may eventually lead to their downfall and demise. Our aim is not to disparage Amazon, but to compel them to do the right thing.
We just went through be scammed by amazon too. Members on our site wanted to donate but we thought a better way would be to setup associate account so they can make purchases they would have anyway and support us at the same time. The first few purchases were fine, but then all of a sudden they stopped showing up on our reports? We knew because members would let us know when they made a purchase so we could keep track.
When I emailed Amazon about it they accused me of making the purchases, even though im in Australia and the purchases were from our UK members?? We don't even have Amazon in Australia and in addition to hat they would have seen my IP would be Australia and the products being shipped and purchased to UK addresses and IP's.
Basically Amazon kept giving us copy\paste emails and told us where to go....Amazon love it when you send them customers but when it comes time to pay all of a sudden they dont want you around anymore..
Congrats
BRAVO !!! for CANDLE ( hub author ) and other comments.
I have same experience …
Plus when I cancelled my 3 WEB sites Amazon asked from me to pay
$50 for “ allowing me to use free tools”!!???.
They are not satisfied with BIG money …..They want MORE.
It is unbelievable and nobody can STOP them.
It shows how ruined is the whole system .
I have questioned amazon regarding reports and no earnings for sometime now with no response. I am based in Australia and currently to date had over 12,000 new customers through my site and their reports don't match up at all(not suprised). It's now coming to an end where i will cease my associates site for good. I will also leave you with this in mind they also run there programs with other companies that these companies promote as home businesses where you will earn $$$$$. These companies are based around amazons sites wigets etc associate programs.These sites are listed as scams and have been reported. Id just like to say this i hope you can all sleep at night because eventually it will all come crashing down and the legal process will get you guys eventually if you don,t do the right thing now.
Thank you Anthony for your comment and input.
I just confirmed Experiment #5. Consistently not getting accurate results from the reporting area of Amazon. I'm going to experiment with not linking at all to Amazon and just start selling the books myself.
More about my experience can be found here: http://www.scottpreston.com/articles/1269.php
Nice Post!
Thank you Scott Preston for your input.
"Not linking at all to Amazon" is a smart move. You'll spend your time - your most valuable asset- promoting your site and products, not Amazon's. The rewards will be yours- yours alone, not Amazon's. I unlinked to Amazon a long time ago (no more free traffic and uncompensated sales!), and the feeling of such revolutionary act is both liberating and exhilarating.
Justin 18 months ago
We were screwed by Amazon's affiliate program. We had $8500 accrued in our account when they found us in violation of something in the contract. We don't know what we did but without notice, an appeals process, or even a response to our emails (there's no number to call) they decided not to pay us the referral fees for which we worked very hard and generated through legitimate transactions. They are an unreliable and unresponsive partner, we will be working with other fulfillment partners in the future.