In the fast-changing digital marketplace of today, Commerce Content is now a staple part of the revenue mix for publishers, particularly in the US. 82% of publishers leverage affiliate marketing as a revenue source and 74% expect their revenue to increase from it over the next 12 months (Digiday and Skimlinks survey). Yet most are putting too much weight on one partner alone: Amazon.
This over-reliance is also vulnerable to tremendous risks. There is a need to research other options. Skimlinks is a powerful solution to diversify your Commerce Content efforts. By providing easy access to 48,500 merchants and 50+ networks, Skimlinks enables publishers to diversify their Commerce Content efforts easily, increase their revenue, introduce a greater variety of products to their repertoire and enhance their user experience.
Potential risks of relying heavily on Amazon for publishers
- Policy changes: unilateral changes in Amazon’s affiliate policies or commission structures can significantly impact your revenue. It happened overnight in 2020 in the US when e-commerce bloomed due to Covid.
- Missed revenue opportunities: brands that want to gain market share against the hegemonic Amazon may be keen to offer higher rates, presenting a missed revenue opportunity for those solely reliant on Amazon.
- Diminishing returns: over-saturation of Amazon links from affiliates can also trigger diminishing returns. That is when the market is flooded with the same type of Amazon links, resulting in consumer fatigue and less chances of clicks and conversions. Moreover, when Amazon reduces commission rates, publishers must manually replace their links to merchants with higher rates, contributing to extra work.
- Consumer taste: Some consumers are vocal that they don’t wish to shop from Amazon for personal reasons either it is because of environmental issues, common values or supporting locally owned businesses including the online ones. Gen Z customers in the US have been especially vocal about this. Mintel reports that 6 out of 10 Gen Z consumers believe that Amazon is too dominant, 47% indicate that they actively attempt to shop less working at Amazon, and 39% are fed up listening to the company.
- Market Fluctuations: the volatility of market fluctuations leaves an overreliance upon one platform leaving your business in danger. Examples like the introduction of competitors Temu, where lower prices and affordability appeal to cost-conscious shoppers, show market conditions can move swiftly, targeting even the well-entrenched. Bolstered by billions of dollars worth of advertising, including a Super Bowl commercial, Temu broke into the marketplace as the top iPhone app in the US to download in 2023.
Merchant’s view of Amazon reliance
- Experience control over the customer: certain categories such as luxury or high-end brands desire control over the customer experience and safety of the brand, so they do not want to risk outsourcing how their brand is presented and will concentrate on DTC. There’s no way of imagining a Chanel bag being sold on Amazon for these reasons.
- New product launching challenges: selling a new product on Amazon may be challenging considering the necessity to establish a high brand presence amid high competition, algorithmic difficulty, compliance measures and advertising expenditures. Buyers also expect quick shipment from sellers.
- Amazon policy strain: Amazon’s free return policy is said to put considerable stress on merchants particularly for fashion apparel brands. According to eMarketer, sellers face substantial costs associated with logistics fees, growing advertising expenses, and the pressure to lower prices to compete with other platforms like Walmart or Target. In addition, operating on Amazon can be very expensive during peak sales events such as Prime Day, when advertisers pay a lot of their revenues to stay in view (14% of last year’s Prime Day revenues among sellers was used to advertise on Amazon per Momentum Commerce). Such a policy may result in high returns and related expenses, making it difficult for some types of merchants.
Advantages of Diversification of Commerce Content Initiatives
It can have a variety of benefits to diversify your Commerce Content initiatives. When you join forces with different merchants, you establish an additional income stream that eliminates the risk posed by dependence on a single party. This becomes more crucial if the sole party has no or very little dependency on you, which means that there is an imbalance of power. This strategy also provides more stability and scope for higher revenues by varying your merchant base. In addition, diversification also provides opportunities to connect with a wider audience and adapt your content to suit their tastes with a better customer experience.
With Skimlinks, you have access to 50+ networks and 48,500 merchants in many categories, allowing you to diversify and make your revenue stream more balanced and stable. We negotiate deals and better rates for you, which can enhance your revenue even more. Our technology is easy to integrate, with total reporting functionality at your disposal, allowing you to maximize your affiliate marketing potential.
This isn’t a matter of stopping working with Amazon.
It is all about widening your spectrum to increase your base of audience, increase your opportunity for conversion, and enhance the user experience. Our e-commerce widgets can assist you with this in a seamless and integrated manner by offering alternative merchants selling the same product. This agile methodology effectively gives the control to the user and increases the likelihood of conversion by undertaking the comparison work for the user.
In short, though Amazon is still a great partner for Commerce Content, it’s important not to put all your eggs in one basket. Broadening your strategy with Skimlinks can minimize risks and unlock new growth opportunities.
Contact your personal account manager or an account specialist here if you require help on how to balance your Commerce Content strategy.
