Recap: Amazon Slashes Commission Rates,

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• Per CNBC article earlier this year: Of the $3.88 billion in operating income that Amazon captured in the fourth quarter, $2.60 billion of it, or 67%, was attributable to AWS.

  • Sure, the retail part of AMZN isn't very profitable - but it also isn't a money loser. Go look at Walmart's results - e-commerce growth has been a money loser for years now.

• Amazon is probably financially struggling a lot right now - a friend mentioned that after schools closed in his area, more than half of their operations employees stopped coming to work because they needed to stay home with their kids. Even if orders are up, Amazon won't make any money unless they have capacity to actually deliver the items, so it's not a huge surprise they're looking for any opportunity to cut costs

• Given Amazon's dominance of the online world, I'm surprised they didn't slash these rates 2-3 years ago.

  • Even longer that that. Take a look at the commission rates for Walmart, Target, Kohl's, Best Buy, etc... nobody is paying anywhere near the 8% Amazon was paying on many major categories. Those were the kind of rates we got back in 2006. The sites that relied 100% on Amazon are in trouble, but they were lucky to have been getting those high rates for as long as they did.

  • Wait till you see what consumer's will pay for goods when Amazon has little or no competition, 3rd party sellers, etc.

    I miss when Monopoly meant you didn't collect 200 Billion and you actually ended up going to jail.

    • The situation is certainly possible if they gobble up a decently higher share. But ultimately, Amazon doesn't really make much money at all on the consumer side. They built this empire by pricing things at no profit. My assumption is that they will end up gobbling tech companies, where most of their profit is and maintain slight margins on retail.

• Has anyone checked other merchants? A quick look showed a big reduction from Walmart and Target on cashback / bonus point portals too - maybe this is a widespread change from in-demand stores?

  • Hundreds of retailers have cut or eliminated commissions so far. Best Buy, Macy's, etc... The only question is which of these cuts are permanent. I think many retailers will conveniently forget to raise them back up once this is over.

    • I think it's important to know why though. Some retailers are cutting commission because they are losing money right now since no one is out shopping, like Macy's. I'm more okay with that.

      Amazon is cutting commission, raising prices and not refunding portions of prime memberships because, well, they can get away with it. At the end of the day, people are buying stuff from Amazon right now. Amazon is just trying to capitalize on fear. Something that people should remember when stores start opening again.

      Auto insurance companies are giving rebates on premiums, yet Amazon won't refund a portion of Prime memberships when most people buy it just for the expedited shipping. Did anyone expect their insurance company to treat them better than Amazon?

      • Lol insurance is refunding premiums because they know if they don't they will be legally required to. CA just passed an order requiring return of auto premiums for March & April. Insurance doesn't care about the consumer

• It makes me wonder if people are going to remember the companies that put the squeeze on verses the ones that worked with them when this is over. Amazon is already charging prime members for 2 day shipping when there is nothing on their website that they are delivering in two days to my area.

  If it is impossible because of logistics or shipping capacity that is fine, but then return some of the prime membership fee like many of the auto insurers are doing.

  • I will remember that waiting for a few days longer is a much better alternative than having to go out and risk getting infected by the wuhan virus.

    Actually I'm grateful that they are still running the operation and providing this option at all.

    btw. IIRC they'll refund you fully if you indeed have never taken advantage of the 2 day shipping since last membership payment =)

• The affiliate recession.