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  1. #1
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    Sales Tax Remedy For Affiliates.
    New York & California are doing their best to destroy or seriously hurt the online sales business thru the sales tax. Many merchants have already dropped affiliates who are located in these states.

    However, it may also be an 'opportunity' for afiliates who wish to take advantage of the situation. It seems that if you do CPM as an affiliate you
    are not liable for any sales tax. So here's an idea that might help you all make some money since the demographics of selling in New York & California are so compelling to merchants.

    Create a blog specifically for each state related to a specific niche in the market. Contact merchants and see if they would be willing to pay CPM
    or a slot fee for a banner AND text link on this blog.

    Since the minimum cost of a PPC ad on Google is 5 cents ...$50/CPM for real visitors ... charge the merchants $5 CPM per banner AND a text link. Get 4 merchants to take you up on the offer and you are making $20 CPM per actual visitor.

    Advertise your blogs on Craigslist in the local NY & CA locations. Since it is a blog Google should pick it up and you should get a decent SEO position.

    If you can get 1,000 click thrus per day, you will make $600 for the month. It's not a big number, but it's better than a sharp stick in the eye. By doing this trick, you give the merchants a window to do business in NY & CA ... and you are not on the hook for any sales tax.

    It's a profitable enterprise doing this trick even if you charge $1 CPM. Blogs are FREE. RSS and Twitter are FREE. Placing ads on Craigslist is FREE. Telling people about your blog on Squidoo is FREE ... 2,000 visitors per day and you take home $240 per month at $1/CPM ... And you can have MORE Than ONE Blog Per Niche.

    Don't over do the merchant numbers, 4 to 6 is about the maximum you shoud use per blog. You can do individual products or the merchants home page or a combo of both.

    Make at least two posts per week, to keep the blog fresh and Google happy. The key idea for you to convey to the merchant is do you want to reach NY & CA people or not?

    Try it out and see what happens ...

  2. #2
    Affiliate Network Rep ayakobing's Avatar
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    I came to buy.at from the Advertising.com CPM display world and I know that it is extremely hard to get CPM rate from any merchants unless you own the site they really want to advertise. Even if they are paying out CPM, they will have to have some kind of backend performance in order to justify their ad spend.

    If you are the affiliates who have more than 2 million US impressions a month, please contact me so I can connect you to the CPM payout display network rep for Advertising.com.

  3. #3
    ABW Ambassador Joshua's Avatar
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    Quote Originally Posted by net4biz
    It seems that if you do CPM as an affiliate you
    are not liable for any sales tax.
    Affiliates are NEVER liable for sales tax. The merchant must charge sales tax to NY (or CA, soon) residents if they have of $XX,XXX of sales from affiliates from NY (or CA).

    Anyway, nearly all of your posts referencing CPM as the way to go are extremely flawed in their logic. You won't be able to get merchants to pay any sort of CPM for an unproven site, that isn't part of an ad network, and that basically has no traffic up front. Your logic is also flawed in saying that you can get traffic from Google for $0.05. There's no way you can get any sort of sustained traffic for $0.05/click from Google. I can easily get $0.05 clicks from MSN's content network, but those clicks convert horribly. Merchants would quickly pull any CPM deals they were stupid enough to agree to once they see no traffic coming in. And sharing a page with 4-6 other CPM advertisers won't get you good $CPMs anyway.

    Merchants will reach CA and NY residents regardless of whether they have affiliates operating in those states. Last I checked, affiliates don't usually make niche campaigns only targeted to residents of their own states.

  4. #4
    Moderator MichaelColey's Avatar
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    Another solution would be to just get a job. Neither solution seems all that appealing to me.
    Michael Coley
    Amazing-Bargains.com
     Affiliate Tips | Merchant Best Practices | Affiliate Friendly? | Couponing | CPA Networks? | ABW Tips | Activating Affiliates
    "Education is the most powerful weapon which you can use to change the world." Nelson Mandela

  5. #5
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    Joshua ... you need to read about the NEW sales tax laws ... you are liable whether you are the merchant or the affiliate ... the merchants are hard to deal with if they are out of state, but if you are an in-state affiliate and the state cannot collect from the merchant, you are it.

    If CPM was flawed logic ... all the ads on television would simply disappear. Plus, ALL online advertising is really some form of CPM disguised as CPA.

    CJ charges merchants $3,000 per month to be on the network. There is NO guarantee the merchant will sell anything, but they will get some branding from being listed on the program pages and if they get some affiliates they will get traffic ... good or bad traffic, it doesn't matter ... If they get 30,000 visitors from their affiliates, they are still paying $10 CPM ... they are just paying it to CJ and not the affiliates.

    Now if they get some sales, that CPM rate goes down. And it could be that ALL the traffic the merchant get covers all their CJ costs and the CPM would be ZERO or better. But somebody is paying for that traffic one way or the other.

    If you can get your publication listed in STANDARD RATES & Data and have a verified audience, you can get advertisers to pay for an AD. Whether you pay $50 CPM (5 cents per click) to Google or MSN ... it's still $50 CPM.

    And guess what ... they are not giving away the traffic - you pay whether it converts or not. It's CPM. You just call it by a different name.

  6. #6
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    Mike ...

    It would be appealing ... IF you could sell advertising. And the advertising made money for you and the advertiser.

  7. #7
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    Joshua,

    The point that most affiliates do not make niche local pages if just the point I was making ... hardly any competition.

    Another point you miss, is that at some price ... it's worth the branding. It's almost FREE money to tie offline advertising to online links or an toll free number.

  8. #8
    Advocate mellie's Avatar
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    Not sure why you believe affiliates are responsible for sales or use tax. It is the merchant responsibility to collect the sales tax if they have a nexus; if no nexus exist or if the tax is not collected then it is the customer who should be remitting the use tax (sales tax) to their state.

    If you are referring to any of the existing affiliate nexus laws that concern brick and mortar stores with separate affiliate stores you're not understanding the laws use of the word affiliate.

    CPM is not desired by most merchants, they see it as too risky.
    Melanie
    President - Affiliate Advocacy 2008 ShareaSale Performance Industry Advocate Award, 2009 Affiliate Summit Pinnacle Award - Affiliate Advocate
    Affiliate Advocacy
    NYAffiliateVoice Seery Writing

  9. #9
    Analytics Dude Kevin's Avatar
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    Net: Not sure what NEW sales tax laws you are reading, making a party that neither passes nor collects transaction dollars liable for paying a sales tax.

    Very interested to see a link.
    Kevin Webster
    twitter: levelanalytics

    Kayak Fishing
    Web Analytics and Affiliate Marketing

  10. #10
    MasterMike HardwareGeek's Avatar
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    talk about someone being confused.

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