The Amazon Brand Referral Bonus: What You Need to Know

In short, every time a shopper clicks an ad off-Amazon (whether on social media, paid Google ads, or a newsletter link), and that ad directs ... Topics Warehousing&Fulfillment EverythingYouNeedtoKnowaboutAmazon’sBrandReferralBonus Warehousing&Fulfillment September22,2021 10minread Joinnewsletter Share: Amazonisnowofferingitsmostaggressiveincentiveyettoencouragesellerstodriveoff-platformtraffictotheirAmazonlistings.LearnhowyoucantakeadvantageofthisnewprogramandwhatitmeansforthefutureofadvertisingonAmazonandoff. WhatistheAmazonBrandReferralBonus? OnJuly15th,AmazonnotifiedsellersofitsnewBrandReferralBonusProgramasanincentiveandrewardfordrivingoff-AmazontraffictotheirAmazonlistings.BrandRegisteredSellersenrolledintheprogramwillreceiveabonusof10%oneverysalemadefromanoff-platformreferralsource. The10%bonuswillcomeintheformofacreditontheseller’sreferralfee—thecostassociatedwitheachsalemadebythird-partysellersonAmazon.Referralfeesarechargedasapercentageofthesaleprice,anddependingontheproductcanrangebetween8%and15%.What’smore,Amazonisrecognizingthelong-termvalueofcustomersdriventoAmazonlistingsfromreferraltrafficandisofferingtocontinuetopaybonusesforpurchasesmadebythesamecustomerforupto14daysafterthey’veclickedonthead. Inshort,everytimeashopperclicksanadoff-Amazon(whetheronsocialmedia,paidGoogleads,oranewsletterlink),andthataddirectsthemtoAmazonwheretheyultimatelymakeapurchase,theAmazonBrandReferralBonuspaysthatsellerback10%oftheirreferralfee. WhyYouShouldJointheAmazonBrandReferralBonusProgram SellingonAmazonhaspracticallybecomeanecessityformultichannelandomnichannelsellers.Amazonhasnowbecomethenumberoneproductsearchplatform,with74%ofUSshoppersindicatingthattheirproductsearchesbeginonAmazon.However,Amazonisoftenoneofthelowest-marginsaleschannelsformanysellers.Thehighreferralfees(comparedtoothermarketplaceslikeWalmartandsellingontheirownecommercesite)maylimittheamountofpaidadvertisingasellercanaffordtoinvestin. TheAmazonBrandReferralProgramessentiallyreducesthecostofsellingonAmazonforthird-partysellers,oftentoaslowas5%(beforeaccountingforthecostofadvertising).ThismakessellingonAmazonmuchmoreattractivetomostomnichannelsellers.Otherbenefitsinclude: Increasedreturnonadspend: Especiallyforsmallbrands,consumersoftentrustsalesonAmazonmorethannon-affiliatedecommercesites.ThereisagreaterlikelihoodofconvertingasaleonanadthatdirectsashoppertoAmazonlistingthananecommercesite.HigherorganicrankingsonAmazon: Sincethereleaseofitslatestalgorithm,Amazonhasbeenrewardingsellerswhodirectoff-Amazontraffictotheirlistingswithhighersearchrankingsandhelpingsellerstracktheiroff-AmazonsalesthroughAmazonAttribution.Greateradefficiency: TheBrandReferralBonuscontinuestoreimbursesellersontheirreferralfeesforoff-Amazontrafficforanyadditionalpurchasesmadeupto14daysaftertheshopperinitiallyclicksonthead. Multichannelsellersdo,however,needtoconsiderthepotentialdamagethatdirectingalloftheiroff-AmazonadvertisingeffortstoAmazonlistingscoulddoforthelongevityoftheirbrand.ThebonusprogrammaybeagreatwaytoreducethecostofsellingonAmazon,butcouldeventuallycostsellersbrandrecognitionandgrowthoftheirecommercestoreifleftunchecked.Emergingbrandsshouldweighthebenefitswiththecoststofindtherightbalancefortheirbusiness. AmajorfactortoconsiderwhendecidinghowmuchexternaltraffictodiverttoAmazonisthereferralfeeandanticipatedbonusratespecifictotheproductcategory.CategorieslikeAmazonDeviceAccessoriescanreturnuptoa30%bonus,whilecategorieslikeAutomotiveandPowerSportsonlyreturna7%-8%bonus.Forsellerswithadiverseproductcatalogue,itmaymakesensetosegmentyouroff-Amazonadvertisingeffortsbasedontheexpectedrateofthereferralbonus. HowDoestheBrandReferralBonusWork? Amazon’sBrandReferralBonusisavailableonlytoBrandRegisteredSellers,andparticipatingsellersmustenrollintheprogram.Onceenrolled,sellerswilltracktheirsalesfromoff-platformadvertisingthroughAmazonAttribution. Sellerswillcreateanattributiontag,whichlikeapixelonGoogleorFacebookwillfollowtheshopperontheirpurchasejourneyfromtheirfirstclicktotheirfinalpurchase.Sellerswillattachthisattributiontagtotheirexternalmarketingcampaign,whetherthat’spaidadvertising,alinkinanewsletter,orasocialmediapost.Foreachsalethat’smadefromexternaltraffic,sellerswillreceiveacreditontheirreferralfeesequalto10%ofthepurchaseprice. HowWilltheBrandReferralBonusAffectMyBusiness? WithAmazonreferralfeescurrentlycosting15%persale,thiscreditreducesthereferralfeeforsalesmadefromoff-Amazontraffictoonly5%.ThismakestheaspectofsellingonAmazonmuchmoreattractivetomultichannelsellersandmaycausethemtoreprioritizetheirecommerceecosystem.  Additionally,withAmazon’sPPCadvertisingcostsup50%yearoveryear,itmakessensetoincreaseadspendonexternalchannels.Sellersgetthebonusofhigherorganicsearchrankingsandnowasubstantialkickbacktooffsettheiroperatingcostsoverall. Amazonalsoleadsthewayinecommercestrategiesforothermajorplayers.Walmart’ssearchalgorithmsfunctionverymuchlikeAmazon’s,andWalmarthasalreadyintroducedanaffiliateprogrammuchlikeAmazon’stodriveoff-platformtraffic.It’slikelythatAmazonwillsoonfollowsuitwithasimilarstrategytoincentivizemoreexternalmarketingeffortsfromitsthird-partysellers. WhyIsAmazonIncentivizingOff-AmazonAdvertising? Earlyon,AmazonexpertsnoticedthatAmazon’salgorithmseemedtorewardlistingsthatdrovehighervolumesofoff-Amazontraffic.DrivingtrafficfromexternalsourceslikeGooglepaidsearchandFacebookadsseemedtoimproveorganicsearchrankingsonAmazon.Thenin2018,AmazonlaunchedAmazonAttribution,atoolforBrandRegisteredSellerstomonitortheperformanceoftheiroff-Amazonadvertisingefforts.  PriortoAttribution,SellerscouldseewhichsalesresultedfromtheirAmazonPPCcampaigns,butthesourceofallothersalesremainedamystery.Byprovidingatoolforsellerstomeasureandoptimizetheiroff-Amazoncampaigns,Amazonwassendingaclearmessagetosellersthatoff-platformtrafficwasimportantandneededtobeprioritized. ThismessagewasconfirmedwiththeA10algorithmupdate.ThisiterationoftheAmazonsearchalgorithmplacedmuchmorevalueonoff-Amazontrafficforsearchresults.Amazonwasclearlytellingsellersthatiftheywantedtosucceedontheplatform,theyneededtobedirectingcustomersfromalloverthewebtoAmazon. Sowhyisoff-platformtrafficsoimportanttothecurrentnumberoneecommerceplatformthatmanyhavecalledanecommercesearchengineitself?Whileanestimated50%ormoreofonlineshoppersbegintheirproductsearchonAmazon,thatleavesanother40%ofshoppersthatarestartingtheirsearchonGoogleoranothersearchengine,withthebalancegoingdirectlytothemerchant’ssiteoranothermarketplace.Tocontinuegrowingitsshareoftheecommercemarket,Amazonneedstoownsearchandpaidadvertisingacrossallchannels. WithWalmartMarketplaceestablishingitselfasanewecommerceleaderanddestinationforthirdpartysellers,Amazonknowsthattoretaintheirnumberoneposition,anAmazonlistinghastobeatthetopofeverysearchrankingandhighlightedineverysponsoredpostonshoppers’socialmediatimelines.Thebestwaytodothat,istoincentivizetheirnearly2millionthirdpartysellerstocanvastheinternetontheirbehalf. UsingAmazoninYourMultichannelStrategy ThisincentivewillcertainlyleadsomesellerstoplacehigherpriorityonmarketingtheirAmazonchannel,butmultichannelmerchantsshouldcontinuetogrowalloftheirchannelssimultaneously.  Infact,Amazoncanbeleveragedtocreatebrandawarenessandacquirenewcustomersaspartofamultichannelstrategy,buttodothis,sellersmustcreateauniquebrandexperienceonAmazonandmaintainasmuchcontrolovercustomerinteractionsaspossible.  OneofthemosteffectivetoolsforcreatingauniquebrandexperienceonAmazonisthroughfulfillment.AmazonsellerswhofulfillordersthroughFulfillmentbyMerchant(FBM)orSellerFulfilledPrime(SFP)haveaccesstovaluablecustomerdatathatcanbeusedforre-marketing,gettingcustomerstoleavereviews,andestablishingtrustwiththeirbrand.BelowareafewwaysthatchoosingtomanageyourAmazonfulfillmentinternallyorwithanoutsourcedfulfillmentpartnercanhelpyouleverageAmazontogrowacrossallsaleschannels: CustomPackaging:Custompackagingallowsyoutoconnectwithyourcustomersandestablishyourbrandassoonasyourpackagearrivesontheirdoorstep.Youcanalsoensurethatyourproductsarepackagedefficientlytoreduceshippingcostsanddamages,aswellasoffereco-friendlypackagingoptions,which64%ofconsumersindicateisimportanttotheirdecisionwhetherornottomakeapurchaseonline.CustomerData:FBAdoesnotallowthird-partysellerstoaccesscustomerdatathatcanbeusedfortargetedmarketing,mailinglists,andbuildingrapportandLifetimeValuewithcustomers.ChoosingafulfillmentpartneroutsideofAmazon’sfulfillmentnetworkallowsyoutouseAmazonasalevertogrowyourbrandacrossallsaleschannels.StreamlinedExperienceAcrossChannels:Findingafulfillmentpartnerthatcansatisfythefulfillmentrequirementsofallyoursaleschannelswillhelpyoucreateacohesive,repeatableexperienceforyourcustomersnomatterwheretheymaketheirpurchase.Managingfulfillmentacrossallchannelsthroughasinglepartnerwillalsosimplifyyourinternalprocessandfreeupbandwidthtofocusonsales,marketing,andproductdevelopment. LookingforanAmazonfulfillmentsolution?Scheduleatimetotalktooneofourin-houseexperts. TheFutureofMultichannelRetail Amazonaccountsfor37%ofonlinesalesandcan’tbeignoredasasaleschannelformostmerchants,butsocialmediaplatformscontinuetobuildoutnewshoppingcapabilities,andshoppingcartslikeShopifyandBigCommercecontinuetoevolveinordertocompetewithAmazon.Thismeansthatecommercewillcontinuetobecomemoreandmoreubiquitous,andmerchantslookingtocompetewillneedtobuildoutmorethanjusttheirAmazonstrategyinordertocompete. OurNewsletter Getourlatestinsightsonhowtomakeyoursupplychainyourcompetitiveadvantage 1-2insightpermonth Join Thanksforsubscribing! AUPSCompany LetUsShowYou Wegrowyourbusinessbygettingyouclosertoyourcustomerswithguaranteed2-daydelivery.Flexible.Scalable.On-Demand.