Affiliate marketing has deep roots dating back to the late 1980’s. Arguably, one of the biggest contributors in growing the industry was Amazon in 1996. While Amazon wasn’t the first to pioneer affiliate marketing, they were a definitive milestone in the process. I’ll outline 3 different ways Amazon has helped to change the affiliate industry.
A Brief History on Amazon
Jeff Bezos idea to create Amazon came in 1994 after finding out how quickly the internet was growing. Bezos began exploring entrepreneurial opportunities and decided to start his own online business. After collecting $1million dollars from family and friends, Bezos set up shop in Seattle working out of his garage. He came up with a list of products he thought would sell online. After reviewing the list, Bezos decided that books would be the most logical choice. In his mind, brick and mortar stores could only stock a few hundred thousand titles but an online store could potentially stock millions. In 1995, Amazon officially opened, dubbing themselves “The World’s Largest Bookstore.” Bezos vision came true, stocking over 1 million titles.
Amazon Adopts the Affiliate Model
The affiliate model was adopted by Amazon in 1996, with the launch of their “Associates Program.” At the time, Amazon only offered books, movies and music to their customers. Affiliates could join their program and earn anywhere from 5% – 15% commission on sales they generated. Unlike the payment methods we use today, commission was paid out to affiliates in the form of a check signed by Amazon. The idea of affiliate networks and alternative payment solutions wouldn’t become available until 1998 when Commission Junction was created.
How Amazon Changed the Industry
1. It’s true, affiliate marketing was not conceptualized by Amazon. That honor goes to William Tobin founder of PC Flowers in 1989. However, Amazon was the first major brand to use the affiliate model as one of their marketing platforms. Amazon’s affiliate model involved paying a commission as a percentage of the product sale. This program became the model for other major retailers looking to establish a program of their own.
2. Amazon was the first affiliate program to gain global interest. After all, Amazon was known as “the world’s largest bookstore,” so a little notoriety never hurts in getting worldwide attention. What’s more, Amazon’s affiliate model was accessible to anyone, anywhere. If you had a website, you could promote Amazon’s products and receive a commission for sales you generated.
3. Amazon was the first program which allowed “associates” to use banners to promote their products. This gave affiliates a new way to promote products and attract customers to one of Amazon’s product pages or home page. Affiliates could still use links if they wanted, however, banner ads gave a visual option affiliates could add to their site.
Will Amazon’s Associate Program Continue to Grow?
A recent Amazon Associate usage stat shows over 180K websites currently promoting Amazon products. While this number continues to grow, changes to Amazon’s commission structure in March of 2017 have slowed growth. Amazon announced a decreased commission rate for certain product categories. This was big news for those who rely on Amazon as their primary source of income. Regardless, Amazon continues to make headlines by offering new products and services. As an affiliate or someone curious about the industry, it will be interesting to see what Amazon does next. Will the associate program fizzle out or will they continue to innovate and redefine the affiliate industry as they did in 1996?