Amazon Affiliate Business Model Explained

The Amazon Associate Program is an affiliate marketing platform designed for online publishers who are looking for ways to generate revenue from their websites.

By signing up to the Amazon Associate Program you are provided with a set of tools which allow you to create links to any product on Amazon. When your website visitors click on those links they are sent directly to Amazon, and if they make a purchase you earn a commission.

You need an active website to apply to become an Amazon Associate, and there is an approval process, so being accepted is not guaranteed.

Fortunately, the Amazon customer support team is excellent, so will be more than willing to answer any questions you might have.

Building an Amazon Associate marketing business requires very little technical expertise, and can generate substantial amounts of money in the right markets.

As with other affiliate marketing models, the bulk of the work involved in setting up an Amazon affiliate website can be outsourced, so all you need is a good idea and the willingness to learn how this type of online business operates.

How Amazon Associate Marketing Works

Being an Amazon affiliate marketer is a type of digital publishing where you promote products featured on Amazon on your own website or blog. When your visitors click on one of these links they are redirected to Amazon, where they can then purchase the product they viewed on your website.

As an Amazon Associate you are permitted to link to any product featured on Amazon, and earn a commission (referral fee) of between 4% – 8%, depending on the type of products you’re promoting.

Each commission you earn is then added to your account balance, which is paid to you every 90 days, either by check or direct deposit into your bank account.

The great thing about Amazon is that they have literally millions of products that you can choose to promote.

Millions of Amazon products
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The Amazon Associate Program is free to join, but you will need an online property of some kind to feature Amazon’s products on. You don’t need a lot of technical knowledge to become an Amazon affiliate marketer, and this type of business can be scaled to whatever size works best for you.

If you’re already involved in the world of digital publishing then featuring Amazon affiliate links on your website is a hassle-free way of adding to your online income.

Amazon was one of the first online companies to operate an affiliate program, and they’ve gone from strength to strength ever since.

The Fulfillment by Amazon (FBA) program has added thousands of new products for you to promote, adding more variety to the types of products you can offer your visitors.

How to Make Money from Amazon Affiliate Marketing

The Amazon Associate program operates just like any other affiliate network in that you do need an online presence of some kind to promote the links back to the Amazon online store.

This website or blog must have existing website visitors to refer to Amazon so they can make purchases.

When you’re creating Amazon affiliate sites you have the choice of either monetizing your existing online properties, or you can create brand new websites focused on specific keywords.

When choosing keywords for Amazon you have the choice of either selecting broad topics like “outdoor living” or more niche topics like “airsoft guns”. Niche topics will have less competition, so can be easier to target when you first start out.

1. Existing Site

If you have an existing website you can add Amazon affiliate links to it, with products or offers which will appeal to your visitors. The vast selection of products you can find on Amazon means you’ll be able to find something to appeal to your visitors.

2. Authority Site

A popular approach to creating Amazon affiliate sites is to build one large website on a popular topic. So, for example, you could create a website for preppers, linking to the thousands of different prepper products featured on Amazon that would appeal to this particular market.

Creating an authority site takes more time and effort, but the financial rewards are worth it.

3. Niche Site

Another way of creating an Amazon affiliate site is to research a set of keywords with very little competition on one specific topic, and then build your affiliate website around those keywords.

These sites take less time and money to create but will have more limited earning potential. Most niche sites focus on reviewing specific products and then providing a link to purchase those same products on Amazon.

How Much Can I Make from Amazon Affiliate Marketing

The very top tier of Amazon Associate earners are making around $80,000 per month from their affiliate sites, with some earning in excess of $100,000 per month.

There are tens of thousands of other Amazon affiliate marketers who generate anywhere from $500 to $10,000 in revenue for simply referring people to Amazon.

Amazon affiliate earnings

As with any type of affiliate marketing your earning potential will be down to choosing a profitable market, creating great content for that market which attracts visitors, and knowing how to funnel your visitors to Amazon in the most effective possible way.

With Associate marketing the more products, you sell the more commission you make.

If you sell 1 – 6 items per month you’ll make 4%, if you can move between 111 and 320 items per month you’ll get paid 7%, and anyone selling more than 3131 items per month will make 8.5% commission. One note here is that there are certain products on Amazon which have a capped commission.

Electronic devices (TVs, computers, etc.) are capped at $25 commission per item. So, while selling high-ticket items like TVs and laptops might seem very profitable, you can make just as much money with your Amazon affiliate business by selling smaller, less expensive items in larger quantities.

Remember, the more items you sell each month the higher your rate of referral commission will be. Amazon only pays referral fees 60 days after the sale was made, so if you have immediate income requirements you should take this into consideration.

Examples of Amazon Affiliate Sites

Bestpocketknifetoday.com

Amazon niche site

Here we have a great example of an Amazon affiliate site which has expanded past being just a niche site and has become an authority on the subject of pocket knives.

It even goes as far as featuring a guide on the different types of steel used in pocket knives. We would estimate that this site earns in excess of US$10,000 per month in Amazon referral fees.

Thisiswhyimbroke.com

Amazon affiliate links on cool website

This site shares cool, unusual items, geeky gadgets, and useless products from space invader chairs to camera lenses coffee cups to jet packs to bacon vodka. The site makes around $20,000 a month, most of it from the Amazon Associate Program.

The best thing about a site like this is that you do not need to produce endless content. As you can see in the screenshot above the product descriptions are only about 40 words long and could easily be outsourced to a writer.

The flip side is that search engines like Google and Bing will never send traffic to a site like this (because of the lack of long-form content) – but ThisIsWhyImBroke.com doesn’t depend on search engines to send them traffic – instead they get most of their traffic from people sharing posts on social media (mostly Facebook).

It wouldn’t take too much work to build a site like this in a smaller niche like Weird Kitchen Items. Here’s another site that follows a similar model but with Kids Items.

Thewirecutter.com

This is a gadget site focusing primarily on product reviews, which then lead directly to the Amazon site. Not only is this one of the most popular websites of its type online, but it’s also a great example of where you can take your Amazon affiliate marketing efforts.

Thebestelectricsmoker.com

Fans of smoked meats will love this site because not only does it provide lots of useful information on electric smokers, even down to the best types of wood chips to smoke your meat with.

This type of affiliate site should be capable of earning $2,000+ per month in referral fees.

Getting Started With Amazon Associate Marketing

Steps to becoming an Amazon Affiliate

The first step in starting your Amazon affiliate marketing business is to choose a niche or market that you’d like to enter, assuming that you don’t already have a website that you would like to monetize.

The extent of the research you conduct on your niche(s) can often dictate just how successful your new online business will be.

You will also need to decide if you want to create a single authority site or multiple niche sites as part of your overall business plan. Fortunately the costs of setting up an affiliate marketing business are minimal, and in theory, you can take your first steps with this business model for free.

Joining the Amazon Associate Program costs nothing, and you could use a Blogger account to publish your content on. The downside here is that using a free site means it could be deleted without any warning, and there are some other restrictions too. Here are some other business expenses you will incur:

  • A keyword research tool of some kind. Long Tail Keyword Pro is popular with affiliate marketers.
  • You will also need a hosting package, although these are available for as little as $12 per month for hosting an unlimited number of sites.
  • Unless you’re an old hand at web design then you’ll need to outsource the design and creation of your site. Budget for at least $500 here.
  • You will need to hire an SEO company or expert to help you promote your site, which will require a budget of around $500.
  • Each niche website will need its own domain, so budget $10 per site for that.
  • Allow another $200 for additional tools you’ll probably need, such as an autoresponder or other marketing tools.

You can use this link to sign up for the Amazon Associate Program.

Best Amazon Affiliate Marketing Courses

Project 24 by Income School

Income School - Project 24 Adsense training

Project 24 is the flagship training from Jim Harmer and Ricky Kesler, the guys who run the website IncomeSchool.com. They are 2 down-to-earth guys who have been teaching online marketing for around 5 years – and they are VERY good at it.

In a nutshell, Project 24 teaches you everything you need to know to build profitable websites in a variety of different niches. From keyword research to setting up a WordPress site to writing amazing content that your readers (and Google) will love.

This course is a comprehensive, step by step blueprint that leaves no digital stone unturned.

This is not strictly an Amazon Affiliate course, they discuss many methods for monetizing your website, but since many of the sites Jim and Ricky discuss in the training are Amazon affiliate sites I included it in the training section.

One of the very best things about Project 24 is that it uses Jim and Ricky’s actual sites as examples. Most of the “Gurus” peddling overpriced training these days won’t reveal their sites. Instead, they use made-up examples in their courses which never seems to ring true.

Actually getting to see the lessons in action on REAL and profitable websites really makes things CLICK for most beginners.

Team Azon Pro

Team Azon Pro is created by Ryan Stevenson who has been marketing online for more than 17 years. This course offers both experienced and beginner Amazon affiliates the hands-on training and software they’ll need to build complete, profitable Amazon Affiliate sites.

The main course consists of 11 videos, about 2 hours long each, are step-by-step training classes that walk you through the construction of an Amazon affiliate site from beginning to end. There are also eBook guides to go along with each video.

​The main course is great but in my opinion, the most valuable part of Team Azon Pro is the niche training bonus in which Ryan gives detailed examples of 8 specific niches and holiday seasons. This is the part of the training that really made the process “Click” in my mind.

Team Azon Pro only costs $27 and has a 30-day unconditional refund. The sales video is a bit hard to get through (you’ll see what I mean) but the course is top-notch!

How Long Will it Take to Make Money with Amazon Associates?

Promoting Amazon affiliate offers can generate profit almost immediately, especially if you’ve selected keywords that don’t have very much competition.

So, in theory, you can create an Amazon site, upload it, and generate sales in under a week. The downside to this is that because Amazon only pays its affiliates every 60 days you’ll have to wait at least two months before that money appears in your bank account.

Most affiliate marketers use the Amazon Associate Program in conjunction with AdSense and/or products from other affiliate networks. This ensures that you have a regular stream of income from multiple sources on a regular basis.

Pros/Cons of Amazon Affiliates

Pros of Amazon Affiliate Marketing

  • Amazon is a trusted brand name – you won’t have to convince people to shop there
  • The income you earn is passive, so you’re not constantly chasing the next sale
  • The business can be scaled to meet your individual income goals
  • People are more comfortable purchasing a physical product than a digital one
  • Amazon shoppers tend to buy more than one product at a time, so you get paid commission on multiple items
  • Amazon’s reporting tools are excellent
  • Amazon affiliate marketing is a great way to diversify your online portfolio

Cons of Amazon Affiliate Marketing

  • Amazon’s commission rates are some of the lowest in the affiliate marketing industry
  • Your site needs to be very targeted in a specific niche to enjoy higher conversion rates
  • You will need to do a lot of research on the best products and keywords to target for your niche or market
  • Bear in mind that Amazon only pay their Associates every 60 days
  • Amazon is VERY strict and you MUST follow their terms of service or they will shut your account down and keep all your accumulated earnings!
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