Bye Bye Amazon Affiliate Arbitrage - From My Inbox
Dear Amazon Associate:
We’re writing to let you know about a change to the Amazon Associates Program. After careful review of how we are investing our advertising resources, we have made the decision to no longer pay referral fees to Associates who send users to www.amazon.com, www.amazon.ca, or www.endless.com through keyword bidding and other paid search on Google, Yahoo, MSN, and other search engines, and their extended search networks. If you’re not sure if this change affects you, please visit this page for FAQs.
As of May 1, 2009, Associates will not be paid referral fees for paid search traffic.
Very sad to see this go.
How to arbitrage ads with Amazon Affiliates and Google Adwords
This is something I’ve done in the past, with a moderate amount of success, but it was cool to see someone else doing this and have it show up in my gmail. When I played with this, I created google ads to products like digital cameras and music downloads on Unbox, the former because it’s a high purchase price, the latter becaue Unbox referral rates are higher than product referral rates. I didn’t spend enough time tweaking this to make it very profitable, but I did manage to break even.
The reason I like the example I’m showing here is that a laptop is a big purchase, so you can spend a good bit of money buying google ads and actual compete well. Here’s how this works:
- Create an Amazon affilates link to the product you want to arbitrage. The guy advertising this laptop used this affiliate info: tag=track25-20&linkCode=ur2&camp=1789&creative=9325
- Based on the price of the product your advertising, determine how much you’re willing to spend in Google Adwords and setup a campaign using the affiliates link you created above. Be sure to put “amazon.com” in the text of your ad, because this is a trusted vendor and it will help you get clicks.
- Once you started getting clicks, examine your conversion rate and tweak your ad bids until you’re profitable. For example, suppose your conversion rate is 2%, ie, 2 out of every 100 people clicking your ad actually buy the laptop. Your ad spend should be .02 (conversion rate) * .04 (referral fee) * 1549.00 (avg. product purchase price) = $1.2392. As long as you spend less than $1.24 / click, you’re making money.
I also played this game with Facebook ads, which turned out to have a better conversion rate than Google ads for music purchases. I like the idea of doing this with laptops, though, because you can afford to pay a high CPC. I think I’ll spend a few hours next weekend trying this again, because the upcoming months are the biggest online shopping months.
Props to whoever served me this ad ;)