Will Amazon’s Brand Referral Bonus divert online traffic?
Amazon.com has introduced a Brand Referral Bonus program that enables third-party sellers to earn a bonus averaging 10 percent of product sales for driving traffic to their Amazon listings from non-Amazon marketing campaigns.
In an announcement on the Amazon Services Sellers Forum, Amazon pointed out three benefits:
- “Help accelerate your growth and improve the efficiency of your non-Amazon marketing and advertising campaigns that drive your referral traffic to Amazon.
- Save money by receiving bonuses that average 10 percent of sales from traffic you have driven to Amazon.
- Improve advertising efficiency by receiving the same bonus for customer purchases of additional products from your brand up to 14 days after they click the ad.”
The bonus is provided as a credit on referral fees, which is the percentage that Amazon takes from sellers on its site. The fees have varied widely by category but currently averages 15 percent.
In the comments section of the announcement, many sellers appeared skeptical of the program with some fearing the bonus rate will eventually be reduced. A few saw benefits as customers already trust making purchases on Amazon.
For Amazon, the move comes as retailers have redoubled their efforts online during the pandemic with Walmart, Google, Target, Kroger and Instacart busy recruiting third-party sellers to their online marketplaces. Facebook, Instagram and TikTok are also promising bigger e-commerce pushes.
Speaking to Advertising Age, James Colon, managing director of integrated media planning at OMD USA, suspects that, in addition to bonuses, brands that reroute external traffic will earn high placement within organic search on Amazon. Mr. Colon said, “Amazon will put more weight behind share of traffic to product pages and sales that are driven from off-site.”
In a blog entry, Katie Capka, inbound marketing manager at Kaspien, which provides software for marketplace sellers, said that, in addition to newer tools such as A+ Content, Amazon Attribution, Amazon Affiliates, Amazon Associates and Amazon Live, the Brand Referral Bonus is part of the company’s efforts to make its platform less transactional. She wrote that Amazon will increase “its value proposition” by enabling shoppers to “engage with brands in a relational as well as transactional manner.”
- Launch of Brand Referral Bonus program – Amazon Services Sellers Forum
- Amazon Offers Brands A ‘Bonus’ When Ads Drive Sales To Its Site – Advertising Age
- Amazon bonus program entices brands to funnel more sales its way – The Drum
- Amazon Sellers Weigh Pros and Cons of New Referral Program – EcommerceBytes
- Amazon Announces Brand Referral Bonus Program for Amazon Sellers – Kaspien
- Amazon Launches Brand Referral Bonus Program – Viral Launch
- Best Buy will be the only top US retailer to see ecommerce sales drop in 2021 – eMarketer
DISCUSSION QUESTIONS: What do you think is behind Amazon’s Brand Referral Bonus, and is it a threat to its online competitors? Do you see more upsides or downsides for third-party sellers?