Amazon Cuts Affiliate Commissions In US

·2 min read

Amazon.com Inc. (NASDAQ: AMZN) on Tuesday cut commissions paid as part of its affiliate program in the United States across categories, CNBC reported.

What Happened

The affiliates make money by recommending a product on Amazon on their own websites or channels and get a cut of the revenue when the consumer ends up making the purchase.

Some of the worst-affected categories included "Grocery," where the commission has been reduced from 5% to 1%, according to the changes posted on its website.

For health and personal care items, the affiliates will also only receive 1%, compared to the earlier 4.5%. Commission on Amazon Fresh products has been reduced from 3% to 1%.

Home items, including furniture, will bag a 3% commission for the affiliates, compared to the 8% earlier.

Amazon confirmed the change to CNBC but declined to say if the cuts were related to the novel coronavirus (COVID-19) pandemic.

Why It Matters

Amazon's business has been differently impacted by the coronavirus outbreak than others. While the e-commerce giant almost denied the deliveries of items deemed "non-essential" during the pandemic in the U.S. until recently, it is seeing increased demand for essential items.

The Seattle-based company hired an additional 100,000 workers over the past month and is looking to add another 75,000 people to its workforce as soon as possible.

Price Action

Amazon's shares closed 5.3% higher at $2,283.32 on Tuesday. The shares traded 0.6% lower in the after-hours session at $2,270.

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