Why Smart Commerce Content Publishers Practice Merchant Diversification

The risk of depending solely on one merchant: smart Commerce Content publishers practice merchant diversification

In today’s rapidly evolving digital marketplace, Commerce Content has become an established element of publishers’ revenue mix, especially in the US. 74% of publishers use affiliate marketing as a source of revenue and 82% are expecting their revenue from it to grow in the next 12 months (survey by Digiday and Skimlinks). However, many are placing too much emphasis on a single partner: Amazon. 

This over-reliance can expose businesses to significant risks. It is essential to explore alternative strategies. Skimlinks offers a robust solution to diversify your Commerce Content efforts. By offering seamless connection to 48,500 merchants and 50+ networks, Skimlinks allows publishers to easily diversify their Commerce Content strategies, grow their revenue, add a wider array of products to their mix and improve their user experience.

Potential risks of relying heavily on Amazon for publishers

• Policy changes: unilateral changes in Amazon’s affiliate policies or commission structures can significantly impact your revenue. It happened overnight in 2020 in the US when e-commerce bloomed due to Covid.
• Missed revenue opportunities: brands that want to gain market share against the hegemonic Amazon may be keen to offer higher rates, presenting a missed revenue opportunity for those solely reliant on Amazon.
• Diminishing returns: over-saturation of affiliate links from Amazon can also lead to diminishing returns. This happens when the market becomes flooded with similar Amazon links, causing consumer fatigue and reducing the likelihood of clicks and conversions.Additionally, when Amazon cuts commission rates, publishers often have to manually swap out their links to merchants with better rates, adding to the workload.
• Consumer preferences: some consumers are vocal about the fact they don’t want to buy from Amazon for personal reasons whether it is for environmental concerns, shared values or to support locally owned businesses including online. Gen Z consumers in the US have been particularly outspoken about this. According to Mintel, 6 out of 10 of Gen Z shoppers think Amazon is too powerful, 47% say they are actively trying to shop les
  s at Amazon, and 39% are tired of hearing about the company.
• Market Fluctuations: the unpredictable nature of market fluctuations means that an over-reliance on a single platform can leave your business vulnerable. The rise of competitors like Temu, which appeals to cost-sensitive consumers with lower prices, demonstrates that market dynamics can shift rapidly, affecting even the most established players​. Supported with billions of dollars of marketing, including a Super Bowl ad, Temu vaulted into the market as the most-downloaded iPhone app in the US in 2023.

Merchant perspective on Amazon dependency

Even from a merchant point of view, relying too much on Amazon might not be the best way to grow or support a brand.

• Control over customer experience: some categories like high-end or luxury brands want control over the customer experience and brand safety, therefore they don’t want to take the chance to outsource how their brand is displayed and will focus on DTC. It is hard to imagine a Chanel bag sold on Amazon for these reasons.
• Challenges of launching new products: launching a new product on Amazon can be daunting due to the need to build a strong brand presence in a context of high competition, algorithmic challenges, compliance regulations and advertising costs. Customers are also expecting fast shipping from sellers.
• Amazon policy strain: Amazon’s free
  return policy is reported to place significant strain on merchants especially for apparel brands. According to eMarketer, sellers face substantial costs associated with logistics fees, growing advertising expenses, and the pressure to lower prices to compete with other platforms like Walmart or Target. Additionally, the cost of operating on Amazon can become prohibitive around major sales events like Prime Day, where merchants spend a significant portion of their revenue on advertising to maintain visibility (14% of sellers’ Prime Day revenues last year were spent on Amazon ads according to Momentum Commerce). This policy can lead to increased returns and associated costs, making it challenging for certain categories of merchants​.

Benefits of diversifying Commerce Content efforts

Diversifying your Commerce Content efforts can provide numerous benefits. By partnering with a variety of merchants, you can create an additional revenue stream, reducing the risk associated with dependency on a single partner. This is particularly important when the single partner has little to no dependency on you, creating an unbalanced power situation. This approach also offers greater stability and the potential for increased earnings by diversifying your merchant mix. Moreover, diversification opens up opportunities to engage with a broader audience and tailor your content to their preferences with an improved customer experience.

With Skimlinks, you gain access to 50+ networks and 48,500 merchants across various categories, enabling you to create a more balanced and resilient revenue stream. Our teams negotiate deals and higher rates on your behalf, which can further boost your revenue. Our platform is designed for easy integration, providing comprehensive reporting tools that help you optimize your affiliate marketing efforts.

This is not about ceasing to work with Amazon. 

It’s about expanding your spectrum to broaden your audience base, maximize your chances of conversion, and improve the user experience. Our e-commerce widgets can help you achieve this in a seamless and integrated way by providing alternative merchants offering the same product. This nimble approach ultimately gives the choice to the user and maximizes the chances of conversion by doing the comparison work on behalf of the user.

In summary, while Amazon remains a valuable partner for Commerce Content, it’s crucial not to put all your eggs in one basket. Diversifying your strategy with Skimlinks can mitigate risks and unlock new opportunities for growth. 

Reach out to your dedicated account manager or to an account specialist here if you need assistance on how to balance your Commerce Content strategy.