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Amazon won’t approve unless you already have 500+ visitors a month on your blog/site? Does that sound right? And it seems they don’t much like competition on your blog/site either. But you can’t get traffic unless you monetize it with adsense or other affiliate programs. The blogger blogs are niche specific and made for getting Amazon products on board… but they aren’t approving because of low traffic, which is counterproductive.
In Amazons defence, they offer you a near unlimited choice of products to advertise, if you have targeted traffic I think it would be well woth incesting some time in to doing some A/B testing on the products you are advertising, and how you are advertising them. The fact that you are making low sales if you have traffic will be more down to what you are doing than Amazon.
You can put up banners on your site, to promote your affiliate offers. Most affiliate programs will usually provide their own creatives when you sign up for their offers. All you have to do is insert the banner on a highly trafficked page (your affiliate tracking is usually embedded within the code). Banner ads in the right locations can do a great job of driving sales.  
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Always disclose your affiliate relationship. Most visitors will probably understand that graphic ad will lead to your getting paid, but if you write a review or use an in-text link as a recommendation, you want your readers to know that may lead to compensation as well. This ensures you retain transparency and trust with your readers, but also, it's required by the FTC's endorsement rules.
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