I suspect Amazon secretly wish they could just get rid of their entire affiliate program. If it was so profitable, they wouldn't be getting rid of affiliates left and right. If you think about it, most people who buy thru an Amazon affiliate link probably would've bought it from Amazon anyway (due to its huge brand recognition, dominance in Google, etc).
So, when an affiliate refers a sale, sometimes they're losing money, not making money.
The reason for Amazon to continue running an affiliate program isn't to drive awareness of the site but to provide the massive number of deep product links that push Amazon results to the top of search results. Amazon's search traffic is in part dependent on the affiliate program.
I agree. Amazon loved their affiliate program while they were growing. Now that they're the biggest in town, and don't need the affiliates; they looking for any excuse to drop them.
Bringing people to a store, virtual or otherwise, is incredibly valuable for that store. Amazon has literally 1000s of people doing that, constantly. Instead of finding a good/best price on an iPod, I send people to Amazon, etc. Don't underestimate that value.
don't overestimate it either. I know people who make tons of spam thin pages ranking for searches like "Nikon D40 camera Amazon coupon". All they have is a link to the Amazon page, and they make lots of money thru it. That's a sale Amazon would have irregardless
It's probably simply more cost effective to drop the Affiliates as it is for all the smaller businesses with affiliate programs that are also dropping affiliates.
So, when an affiliate refers a sale, sometimes they're losing money, not making money.