Disclaimer: This is an older post. Please keep that in mind as you read.
Since you are reading this post, there is a good possibility you have joined with many of us in participating with online shopping. The chart below depicts the percentage of U.S. online adults participating in various retail online activities.
Source: Forrester Research Inc. 2010 Data
Whether we are looking for a new digital camera, a gift for that special someone, or even a new television, we have probably at least considered doing a search for an online review of the product in mind to make the best informed decision possible. Once we have considered the review we will also do an online price comparison check to see where our best deals are. Often times those reviews will point us to a product that is found on Amazon.com. Quite often we will find the best pricing there and possibly free shipping.
Thanks to us, E-Commerce Shopping is on the Rise
Any business would love to have a 46% increase in net sales between years. This is what we, the internet shopper, enabled Amazon.com to do with their North American sales. Amazon’s net North American sales came in at $18.7 billion for 2010, an increase of 46.1% over 2009. The year 2011 does not appear to be starting in too bad of shape. In April, Amazon indicated that the first quarter 2011 North America segment sales, representing the Company’s U.S. and Canadian sites, were $5.47 billion, up 45% from first quarter 2010.
What this really means, is that we, the online shopper, are placing our trust in the services and products provided by this number 1 e-retailer. In the chart below, you can see how shoppers have ranked various e-retailers by their level of online spending during December 2010 compared to the same period in 2009.
Source: Kantar Retail Shopper Scape Survey. December 2010 and December 2009.
Are You an Amazon Shopper? How Did You Find Amazon?
This article on Wikipedia.com makes the statement that 40% of all Amazon sales come from either “Amazon Affiliates” or third-party sellers that sell products on Amazon. Suffice it to say, with that high of a percentage, it is quite possible that someone searching for a particular product may have found their introduction to Amazon through an Amazon Associate’s affiliate site.
Clicking a link on the site would have taken the visitor directly to an Amazon page. If Amazon was able to place what is known as a cookie on the visitor’s computer for that session, any purchases made from Amazon by that visitor would have resulted in a commission being paid to the owner of the referring site. All of this happens without any change in the cost of the product purchased.
Through the use of Associates, Amazon is able to extend it’s marketing reach and compensates the referring website owner with a percentage of the sales price. Amazon wins and the Associate wins.
What Keeps You Coming Back to Amazon?
If you first discovered Amazon through an Amazon Associates site, do you return to the site or do you go directly to Amazon for your subsequent purchases?
The converse to the statement cited earlier is that 60% of Amazon sales from sources other than Associates or third-party sellers. With $18.7 billion in North American sales in 2010, you can see that customers purchasing directly from Amazon resulted in $11.2 billion in sales. These customers would be first time buyers going directly to Amazon, returning customers to Amazon directly, or customers that discovered Amazon through an Associates site but chose not to return to that site but went directly to Amazon for their subsequent purchase.
Amazon does an excellent job of taking care of their customer. You will find very few complaints about their customer service and their prompt delivery of the product. Customers find additional savings when their purchases qualify for the free shipping option Amazon offers.
Amazon is also good at advising their customer of other items they might be interested in purchasing. Sometimes one of those e-mails will alert the customer to an item they may have forgotten about.
With prices that are often the lowest in the marketplace, excellent shipping and customer service, and periodic reminders of related products and specials, why would we not want to return to their site directly? Is there any advantage to return to the affiliate’s site and click on their link to Amazon? We believe there is an advantage.
What is an Amazon Associate Affiliate?
Affiliate marketing is a marketing practice where businesses or individuals associate or affiliate with a business to promote or sell that business’ products or services. In exchange for the additional traffic or sales, the associate or affiliate will receive some form of compensation, usually a percentage of the sales price.
Amazon, the world’s leading e-retailer, allows individuals and businesses to build websites promoting Amazon products and for every sale Amazon makes as a result of a referral from these affiliate sites they will compensate the site owner with a percentage of the product sales. This referral fee is considered a marketing expense for Amazon and results in a reduction of the company’s net taxable income by the amount of commission paid.
What most customers may not know is that when they visit Amazon through a link to a product on an Amazon Associate’s site and choose not to purchase that product, they can still shop all of Amazon during that session and any purchase made will be credited back to the referring site.
Shopping at an Amazon Associates Affiliate Site?
Amazon affiliates strive to provide the best user experience possible for the visitor looking to purchase a physical product. It is their desire that the shopper can get all the information needed to ensure an educated purchasing decision. Many hours of research go into an affiliate site and our continued frequenting of their site allows them to expand on the services provided.
What can you expect from an affiliate site that has the customer foremost in their mind?
- A site that is attractive and informative
- A site that will provide a product description with annotations on important features
- A site that will identify potential users for the particular product highlighted
- A site that will provide personal observations and access to customer reviews
- A site that will provide a means for price comparisons from other vendors
- A site that will provide related information that may assist the shopper in their decision
- A site that will demonstrate both the good and not so good aspects of the product
- A site that will provide an opportunity to investigate other similar products
- A site that has spent time researching products and writing productive reviews
- A site you can trust
Why Shop at an Amazon Affiliate Instead of Amazon Direct?
- The affiliate will refer you to Amazon for placing your order
- You will be able to shop for other items on Amazon before completing your purchase
- You will receive the same pricing and shipping costs
- You will receive the same quality Amazon service
- By continuing to shop through the affiliate site, you will be helping to provide an income for the affiliate in order that they may continue to bring relevant product information to other shoppers
- You will be supporting a small business person, a work at home mom or dad, a student, or anyone else striving to make an income on the internet