I'm sad, but unsurprised to see Amazon Smile go. Retail isn't exactly high margin to begin with, and Amazon has made a specialty of squeezing what margin remained. As Jeff Bezos said, "Your margin is my opportunity." So, when Amazon announced Smile, I was very surprised that they weren't adding a surcharge for the donation, but rather where making the donation out of whatever margin they earned on the product.
I guess with the current economic downturn, Amazon has decided that there is insufficient margin to continue taking a cut out and donating it to charity.
From what I've read, an Amazon smile link will superceded any affiliate link you clicked on. That means Amazon goes from paying out multiple percent to 0.5%.
I'm guessing the administrative burden of so many organizations is a big driver behind the shutdown.
I don't think this is true, I run an affiliate site that directs people to Smile, and my commissions have been the same whether I direct to Smile or not. I have heard that your conversions typically go down when you use Smile. However I think that might be because many customers have never signed up for Smile and are scared away. I decided to stick with Smile links because I thought that in the long term it would motivate people to continue using my site and I figured at worst I'd help charities a lot more than the income I'd lose so I'm a bit sad to learn about this.
Oof, really? Then I actually feel bad that some of the smaller blogs I follow that published legit reviews didn't get credit for my sales. (I use the Always Smile browser extension.)
Some retail isn't high margin, that's absolutely true.
Some retail has a 75%+ markup as standard at the store. That's why they're able to regularly offer sales where they take 25%, 50%, even 75% off: it's not just to clear out unsold inventory; many retailers that do this are still making a profit at those prices.
Amazon, being a "sell everything and more" retailer, certainly doesn't get to enjoy those high profit margins for all their products, but they also definitely do not have to deal with the razor-thin margins of other sectors across the board. They get to average it out nicely somewhere in the middle.
Some retail has a 75%+ markup as standard at the store. That's why
they're able to regularly offer sales where they take 25%, 50%,
even 75% off: it's not just to clear out unsold inventory; many
retailers that do this are still making a profit at those prices.
But how many of those items actually sell at the sticker price? The reason I ask is because I've noticed this with mechanical watches (which I have a moderate interest in). Mechanical watches will often have absurd sticker prices. Two, or even three times the final sale price is quite common. But do any of those watches actually sell at those prices? Does anyone actually spend a thousand dollars for, e.g. a Hamilton automatic which has a selling price of roughly $400 on Amazon, and elsewhere? I very much doubt it. The sticker price is just there to add prestige and the sale price, for all intents and purposes, is the actual price.
Similarly, clothing often has some ridiculous sticker price, because the entire point of the sticker price is to be marked down in one of the seemingly perpetual sales that retailers have. I remember that J.C. Penney, when they hired Apple head of retail Ron Johnson, tried to change this practice, by setting the list price of clothing closer to the price that they paid, eschewing having sales. It was a disaster [1]. Customers had become accustomed to seeing large markdowns, and when those markdowns weren't there, they waited (or shopped at other retailers which continued to offer markdowns).
Just because the sticker price has a 75% (or 2-300%, in the case of watches) markup doesn't mean the retailer actually expects to make that margin on anything except a small fraction of sales.
I guess with the current economic downturn, Amazon has decided that there is insufficient margin to continue taking a cut out and donating it to charity.