Here’s a great lesson on why affiliates need to pay attention to merchant emails and also why it pays to always have a plan B in this business. If you are doing PPC for Walmart and missed the email, you could lose your shirt!

Walmart just announced an affiliate pay cut. For example clothing was cut from 12% to 4%. Electronics paid 6% now only 1%. Books and photo dropped from 8% to 1%. Previous overall commission range was from 5-12%. Now it’s only 1% - 4%. That’s a HUGE decrease and I’m sure lots of affiliates are upset and rightly so.

Granted Walmart has tons of brand recognition and low prices - hence low margins, but that’s just too big of a reduction to even consider fair or reasonable, if they value their affiliate channel at all.

Marc Quarles blogs about the The Death of Wal-Mart. Marc talks about an Amazon product he was spending $12 in PPC on to make $28.17 in commission. The commish on that product will now be reduced to $4.61. So he has no choice but to pull campaign or switch links to Amazon which is still fairly low paying, but looks pretty good now in comparison. Marc writes:

“So, what’s the moral of the story? Always have a plan B. Remember, when you’re in the affiliate marketing game, your income is controlled by other entities. One stroke of the pen could devastate your income, so always have a backup plan, and pay attention for changes such as this.

I’d hate to guess how many affiliates are going to lose their shirts because they didn’t pay attention to Wal-mart’s email, and continue spending $12.00 to make $4.61.”

I wonder if they’ll re-think this strategy if the Walmart.com WMT stock plummets due to a decrease in sales?

Maybe the affiliate channel just didn’t generate much for them. But then again maybe the last paragraph of this post has the answer. WalMart: Downsizing Affiliate Marketing