On July 15th, Amazon announced the Brand Referral Bonus Program in an effort to combat the continued surgence of Shopify. The program allows participating sellers to earn a bonus averaging 10% of product sales driven by your non-Amazon marketing efforts.
1. Lowers your fees on purchases made from off Amazon paid efforts by 10%. Most categories require brands forking over 15% of each sale, with the referral bonus program, brands can take 10% back!
2. Optimize for more efficient return on paid efforts. The average Shopify store converts at 1.5% while Amazon averages 10-15%.
3. You'll be able to track traffic where your external traffic is coming from, and is it profitable through Amazon Attribution?
4. Shoppers who buy additional products within 14 days of clicking the non-Amazon ad also contribute to the bonus/referral credit.
1. Sending traffic to Amazon over your Shopify site will mean you cannot collect customer email addresses or remarketing data.
2. You should assume and expect the referral bonus will change as time goes on. It might be lowered to 8% next year and 5% the year after that. Point is, make sure you stay up to date on the latest updates about this program.
3. Here's a reverse disadvantage, let's say that you choose not to pariticipate you're giving a leg up to your competiton. They'll be not only driving Amazon AMS/DSP traffic but they'll also be shifting external marketing dollars designated to crush the competiton.
It seems as though Amazon is making a huge push to incentivize brands to exist and sell on Amazon. Tools like A+ Content, Brand Store, and Amazon Posts (to name a few) allows brands to have a bigger voice on the country's biggest site. Brands have a way to mediate one seller's biggest complaints about Amazon: profitability.
Expect businesses to strategically implement this tool as part of a holistic approach for optimizing and increasing ad spend on and off Amazon.