It is widely accepted that Amazon know what they are doing when it comes to turning traffic that you refer to them into sales. It is also the advice given by many highly respected and experienced Amazon affiliates, that you should concentrate your efforts on high ticket items with a selling price of $100 or more.
Whilst this is generally very sound advice, and should certainly form the foundation of your Amazon affiliate strategy, are there any reasons for targeting low ticket items? I definitely think there are. Read on to find out why.
The Amazon Commission Structure
To understand my overall reasoning here, we first need to take a look at the Amazon commission structure. This varies for certain product types, but in general terms Amazon pay a layered commission percentage based on how many items your referrals have purchased that month.
As you can see from the table above, for general products, this ranges from 4% up to 8.5% depending on how many sales you refer. The other very important thing to remember, is that once you pass any of the thresholds, the new rate applies for all of the sales you made that month.
So High Ticket Or Low Ticket?
Seems like a no-brainer doesn’t it? But which is easier getting someone to part with $10 or getting someone to part with $100. You might choose to disagree, but in most cases I would say that selling a $10 item is easier.
So let’s take a hypothetical scenario where I have a site promoting a $100 product. It is a fairly new site and at present I’m quite happy that it is getting a couple of sales per month. That brings me in $8 per month in commission at 4%.
Now what if I had another site that I ran alongside, selling items around the $10 mark? These are popular items and customers in this niche often purchase multiple items at one time. Through this site I find I can sell 150 items on average per month. This takes me into the 7% bracket, and even though I’m only making $0.70 per sale, this adds up to $105.
But the other site is now also making 7% instead of 4% and has now earned $14.
As I say, the above example is only hypothetical, but you can certainly see the potential. It is also probably more valid and useful for beginners than for those with established high traffic Amazon sites. When you start to achieve the levels of traffic to your high ticket site to push sales upwards, you may feel that the return on investment of time for the low ticket site is not worth it.
It is a strategy that I’m currently working with myself, and in my case it works in terms of the effort I put in, simply because the low ticket site in question is one that I have wanted to build purely for my own interest anyway.
Do you agree with my premise that making low ticket sales is actually easier? Please feel free to leave a comment and let me know your thoughts.