[Alan Hamilton]

I agree Dan. From a business perspective that would be a logical step for Amazon. Now that their brand is so well known, it would make sense that they one day shut down their associate program, which I suspect produces a very small percentage of their volume.

[knight01]

Originally Posted by Alan Hamilton

I agree Dan. From a business perspective that would be a logical step for Amazon. Now that their brand is so well known, it would make sense that they one day shut down their associate program, which I suspect produces a very small percentage of their volume.

But if I understand what Colorado is trying to do, it wouldn't matter. Affiliate program or not, the state is trying to get merchants to submit sales information to them regardless of 'nexus'.

[rematt]

Originally Posted by knight01

Affiliate program or not, the state is trying to get merchants to submit sales information to them regardless of 'nexus'.

Which makes Amazon's actions particularly abhorrent. They had absolutely nothing to gain. They just wanted to prove that they can be dicks, and they did. But hopefully this serves as a fair warning to all Amazon associates. They don't care about you, you are nothing more than pawns.

-rematt

[nsusa]

Amazon has a lot to lose if every state implements a similiar law. CO requires a first class mail notification to each customer at the end of the year + notifications to the state. Assuming Amazon has maybe 30 Million US customers ... you do the math what this would do to Amazon's profit if every state does it.

But I had mentioned this before in another forum or blog - what every Amazon affiliate has to think about, what if Amazon shuts the program down altogether?! I admit - I thought I have enough replacement merchants (which I do), but you know how this looks like with conversions?! It sucks. Just having a replacement merchant is not enough if the merchant does not convert. I feel really screwed at this point by our politicians and by Amazon.

[Alan Hamilton]

Hopefully those of you who may have put all or most of your eggs in one basket are learning the value of diversifying your businesses. As time rolls forward and brands become more prolific, more affiliate programs will cease to exist. Diversification is key to long term stability.

[ladidah]

As I put up some affiliate links yesterday, I am thinking to myself how much longer Amazon will have an affiliate program the way things are going. I am thinking that perhaps Amazon is thinking they don't need the affiliates anymore since they are such an household brand name and so recognized. However, I think initially (this is a hunch) that they would see minimal impact from cutting off a few states but as more and more states are added to the dumped list, that they will see sales drop.

Why? Because what helps propel Amazon sales, and partly part of why they are successful, are affiliate links. Not just homepage links but DEEP Deeeeep links, that combined with testimonials, product reviews, etc. Without affiliates, the average consumer would just be overwhelmed by the vast array of products in Amazon's inventory and click away. Because the average consumer does not have patience or even know about half of the stuff that they sell beyond books.

If Amazon could do well without the affiliate links, why are so many affiliates making money from Amazon right now and not going directly through their site?

[nsusa]

Originally Posted by Alan Hamilton

Hopefully those of you who may have put all or most of your eggs in one basket are learning the value of diversifying your businesses. As time rolls forward and brands become more prolific, more affiliate programs will cease to exist. Diversification is key to long term stability.

Trust me - I am diversified, but 15-20% is still a big chunk of money that I would rather have in my pocket.

[nsusa]

Originally Posted by ladidah

As I put up some affiliate links yesterday, I am thinking to myself how much longer Amazon will have an affiliate program the way things are going. I am thinking that perhaps Amazon is thinking they don't need the affiliates anymore since they are such an household brand name and so recognized. However, I think initially (this is a hunch) that they would see minimal impact from cutting off a few states but as more and more states are added to the dumped list, that they will see sales drop.

Why? Because what helps propel Amazon sales, and partly part of why they are successful, are affiliate links. Not just homepage links but DEEP Deeeeep links, that combined with testimonials, product reviews, etc. Without affiliates, the average consumer would just be overwhelmed by the vast array of products in Amazon's inventory and click away. Because the average consumer does not have patience or even know about half of the stuff that they sell beyond books.

If Amazon could do well without the affiliate links, why are so many affiliates making money from Amazon right now and not going directly through their site?

Exactly. I have build several niche websites that use not so well-known products. Not much SE competition and it is easy to rank for. The search volume is there, but not necessarily a matching Amazon.com page. Sites like mine provide value to the visitor because she finds information about the product she is looking for and then even gets a hint where to buy it.

Amazon is so much not just books, but all our politicians see is the bookseller Amazon. Another problem is that brick and mortar businesses are better organized than we are. Who is a member of the chamber of commerce? Not many affiliates I guess.

Definitey time to re-think how to structure your online business. My turn is now

[AffiliateHound]

Pretty good article summarizing the Colorado law and what is happening with other states and with the National Council of State Legislatures: Amazon reacts to new Colo tax, costing affiliates

[delsol]

Originally Posted by ladidah

As I put up some affiliate links yesterday, I am thinking to myself how much longer Amazon will have an affiliate program the way things are going. I am thinking that perhaps Amazon is thinking they don't need the affiliates anymore since they are such an household brand name and so recognized. However, I think initially (this is a hunch) that they would see minimal impact from cutting off a few states but as more and more states are added to the dumped list, that they will see sales drop.

Why? Because what helps propel Amazon sales, and partly part of why they are successful, are affiliate links. Not just homepage links but DEEP Deeeeep links, that combined with testimonials, product reviews, etc. Without affiliates, the average consumer would just be overwhelmed by the vast array of products in Amazon's inventory and click away. Because the average consumer does not have patience or even know about half of the stuff that they sell beyond books.

If Amazon could do well without the affiliate links, why are so many affiliates making money from Amazon right now and not going directly through their site?

I agree with you. Additionally people would slowly replace their Amazon links with their competition (tons of alternatives/competitors, sometimes even cheaper/better in each segment).

Amazon is not a good citizen...but hey since when are large corporation good citizens...

Many affiliates are also customers, they should shop elsewhere when a good alternative is available. If Amazon continues to behave this way, state by state, their image/brand will suffer.

[Rexanne]

Well, the positive is that the merchants we replace Amazon links with will be paying us more. ;-)

Still sucks. I'm sure most of us have several dozen if not hundreds of Amazon links floating in cyberspace. I know I do.

This industry has sure taken some hard blows in the past 10 years. First the parasites chewed us up, then networks became untrustworthy IF tracking was actually working, then the tax laws cropping up everywhere and now the threat of Amazon pulling their program completely. It's another battle we will have to face but we'll come through. Stay strong, keep your goals in mind and your hearts open. Consider this is all happening because we had the foresight to jump into an industry that grew and made the greedy pay attention. We still have the brains and spirit that got us here. Any ideas about the *next* hot industry?

[Brent E. - Shareasale]

Originally Posted by AffiliateHound

Pretty good article summarizing the Colorado law and what is happening with other states and with the National Council of State Legislatures: Amazon reacts to new Colo tax, costing affiliates

My favorite part of that article: "Rhode Island is considering repealing its law after failing to collect any revenue by the end of 2009."

Way to go state governments!

[nsusa]

Originally Posted by Brent E. - Shareasale

My favorite part of that article: "Rhode Island is considering repealing its law after failing to collect any revenue by the end of 2009."

Way to go state governments!

No matter how visibly you explain this to lawmakers in other states - they will not listen.

[Bradley.Senkovich]

All sides of this D20 is terrible. Amazon is terrible for dumping affiliates to which made no difference to their end of the business. other then the fact they need to fill out the forms and send the letters.

The idiot part of the DR 0252 forms that merchants now have to fill out for EVERY customer who ever purchased from March 1st forward. so it will cost .44 cents to have a stamp, .16 cents for a print up (good thing we sell ink), $35 an hour for the accountant to verify and send... It was nice though that Merchant's did not get hit with the tax collecting duties right away. I am sure though merchants are going to include the taxes from CO as soon as they can figure a way to do so.

My new buddy Daniel and i had a small discussion about our great age of automation and technology. Yes we are in a great age... but we are not ready to automate this! no software exists on this one yet. we need a guru to get crackin on it, im sure they'd make a mint. I know its in our "to do" list.

does anyone else get unerved that if they pass a health care bill it probably wont take affect until 2014, but taxes get passed next day? I know the girls in accountanting are banging their heads on the desk now.

I am especially unerved about Amazon dumping their affiliates even though it makes no difference... Shame on them...

here is the link to the Department of Revenue site

[delsol]

Originally Posted by Bradley.Senkovich

All sides of this D20 is terrible. Amazon is terrible for dumping affiliates to which made no difference to their end of the business. other then the fact they need to fill out the forms and send the letters.

The idiot part of the DR 0252 forms that merchants now have to fill out for EVERY customer who ever purchased from March 1st forward. so it will cost .44 cents to have a stamp, .16 cents for a print up (good thing we sell ink), $35 an hour for the accountant to verify and send... It was nice though that Merchant's did not get hit with the tax collecting duties right away. I am sure though merchants are going to include the taxes from CO as soon as they can figure a way to do so.

My new buddy Daniel and i had a small discussion about our great age of automation and technology. Yes we are in a great age... but we are not ready to automate this! no software exists on this one yet. we need a guru to get crackin on it, im sure they'd make a mint. I know its in our "to do" list.

does anyone else get unerved that if they pass a health care bill it probably wont take affect until 2014, but taxes get passed next day? I know the girls in accountanting are banging their heads on the desk now.

I am especially unerved about Amazon dumping their affiliates even though it makes no difference... Shame on them...

here is the link to the Department of Revenue site

Thanks for the link. Crazy stuff....
Our politicians are like chickens without a head. The state budget gaps are so huge. I hope this "Great recession" is ending, if not we will see this behavior become more and more widespread. To a point of near oppression (if not already there for some). Taxes are already starting to go up for some and this will continue strongly...

No one can know the exact timing of the future. It is always good to expect the best but be prepared for the worth. This article points out the assessment of the economy but some of the most respected economists and successful financiers. (ie these are not some weirdos):
http://www.marketwatch.com/story/12-...ism-2010-01-05

here is an interesting parable from Charles Munger (the life long partner of Warren Buffett):
http://www.slate.com/id/2245328/pagenum/all/

Good week-end!

[galengt]

I certainly think that the (stated) intention of the Colorado Legislature to even the playing field between B&M and online retail has some validity (or at least political viability). I can also understand Amazon trying to protect its margins and the interests of its shareholders. However both clearly miss the real value created by affiliates and somehow managed to leave their interests out of the calculus in this entire process.

I would like point out that there is a way for affiliates to get around the nexus argument altogether by using a third party affiliator that is based in a state without the affiliate tax laws in place. Full disclosure, I am an employee of VigLink, one such company. We do have competitors.

When you work with a third party, you are actually a contractor for them (we issue you a 1099 when you make over $400). The third party is the publisher of record with Amazon or any other merchant. Since we use our affiliate ID's for links on your site the nexus is established through our base of operations (CA in our case). We wrote about this on our blog, Brad Feld (notable VC blogger) was the first to use our service for this purpose and also wrote about it.