Amazon Terminates Thousands of Affiliates - Uses Them to Fight CO Sales Tax #noadtax

[Linda Buquet]

In spite of the fact that Colorado affiliates were able to get affiliate nexus language removed from HB 10-1193, Amazon still sent termination letters to thousands of Colorado affiliates, informing them they are being dropped today without notice. What is really crazy about this is that there is no affiliate nexus language, CO affiliates have done nothing wrong AND most of them are selling Amazon products to consumers in others states or internationally as well, and even that out-of-state business will be ended for these unfortunate affiliates. <strong>(Be sure to read, what you can do at bottom of this post!)</strong>

Colorado affiliates are obviously upset and many will lose significant income over this. But the affiliate community at large is also very upset by this move for a number of reasons. 1) This could set a precedence and other merchants could follow suit EVEN THOUGH affiliates are not creating nexus for merchants that sell in Colorado. 2) It appears to many that Amazon is doing this in order to get affiliates to fight the legislation for them.

The letter Amazon sent to affiliates, stated in part: "if Colorado would repeal the current law or follow the constitutional approach to collection, we would welcome the opportunity to reinstate Colorado-based Associates. You may express your views of Colorado's new law to members of the General Assembly and to Governor Ritter, who signed the bill."

Melanie at Affiliate Advocacy and the PMA explain what happened.

<strong><a href="http://affiliateadvocacy.com/2010/did-amazon-remove-colorado-affiliates-and-why/">Amazon Removes Colorado Affiliates and Why</a>

<a href="http://www.performancemarketingassociation.com/blog/2010/03/08/colorado-bad-turn-by-amazon/">Colorado – bad turn by Amazon</a></strong>

Revenews provides an overview too and Franklin Banker, in comments, really sums up the feeling of many Colorado affiliates. <strong><a href="http://www.revenews.com/angeldjambazov/amazon-terminates-colorado-affiliates-joins-growing-list-of-advertisers/">Amazon Terminates Colorado Affiliates, Joins Growing List of Advertisers</a></strong>

<a href="http://www.revenews.com/angeldjambazov/amazon-terminates-colorado-affiliates-joins-growing-list-of-advertisers/">Franklin Banker commented</a>:

This is very contradictory and seems to be a punitive action against Colorado affiliates who are not focusing their efforts only in Colorado, but across all markets in the US and abroad.

<strong>Why fire the affiliates?</strong>

I can only guess that they are doing this to get us back to the Capital to try to get the bill repealed instead of mounting their own legal challenge.

After all, the new bill HB10-1193 now has no mention of affiliates in it at all. Why terminate affiliates at all? Under the previous model in New York, Rhode Island and North Carolina the term “affiliate” was in the bill, making it a bit more understandable.

The Colorado bill does not mention affiliates

The issue is one of legality and compliance, and no longer focuses on affiliates due to the rewrite of the bill. There is absolutely no reason to fire the affiliates now, so why do it?

Maybe this is cheaper for them than mounting a legal challenge now. Perhaps they want to see if we can get the bill repealed?

<strong>Other commentary:</strong>

<strong><a href="http://radar.oreilly.com/2010/03/amazon-fires-its-colorado-asso.html">Amazon Fires Its Colorado Associates</a></strong> - O'Reilly Radar

<strong><a href="http://www.huffingtonpost.com/2010/03/08/amazon-reacts-to-colorado_n_490028.html">Amazon Reacts To Colorado Internet Sales Tax Measure By Firing Its Colorado Associates</a></strong> - HuffingtonPost

<strong>WHAT CAN YOU DO?</strong>

Affiliate Advocacy is having an advertising tax conference call tomorrow March 9. Get the info and register for the call. <strong><a href="http://affiliateadvocacy.com/2010/affiliate-advocacy-conference-call-affiliate-legislation-march-update/">Affiliate Advocacy Conference Call Affiliate Legislation March Update</a></strong>

The PMA is encouraging CO affiliates to contact their merchants to educate them regarding the fact that the legislature had nothing to do with affiliate nexus. Information and a sample letter is available in the <strong><a href="http://groups.google.com/group/pma-co/browse_thread/thread/25fa3b285d89b57b">Colorado affiliates Google Group</a></strong>.


<strong>Last, but not least MERCHANTS, THIS IS A MUST READ! <a href="http://affiliateadvocacy.com/2010/what-will-guide-you/">What Will Guide You</a></strong>

 

[Melanie10]

Linda, thanks for helping to educate everyone. I have spent most of today talking with merchants, it appears that many will be doing their homework before deciding.

 

[Linda Buquet]

Oh yea! That's good to hear. Thanks Mel, for all you do!

 

[Linda Buquet]

Article in the Wall Street Journal including a quote from the CO Governor and the PMA.

Amazon Retaliates Against New Colorado Web Sales Tax

In a statement, Colorado Gov. Bill Ritter said, "Amazon has taken a disappointing—and completely unjustified—step of ending its relationship with associates. While Amazon is blaming a new state law for its action, the fact is that Amazon is simply trying to avoid compliance with Colorado law and is unfairly punishing Colorado businesses in the process."

Edited to add: Sorry, when I posted this the full article was available. Now they make you subscribe to read the rest.

 

[Ron Bechdolt]

"if Colorado would repeal the current law or follow the constitutional approach to collection, we would welcome the opportunity to reinstate Colorado-based Associates.

The problem with this is that by the time Amazon reinstates these affiliates, they will have gone off to find other merchants. What Amazon and other companies don't seem to realize is to many their affiliate income is their only source of income and if Amazon was a big portion of that, they have no choice but to look for alternatives. Once Amazon reinstates them, they will not want to go to all the work AGAIN, to change out links. Additionally, the trust factor with Amazon is pretty much gone at that point.

The mentality here is just amazing. It's like so many merchants we see that when times get tough the first thing they do is drop their affiliate program, all along telling folks they will restart it once things pick up. The trust factor is then gone.

 

[grado]

oh my, terminate Colorado affiliate links? is one more lawsuit come to amazon, then another thousands affiliate be terminate again.

 

[AliceandMosee]

It is interesting how state to state taxes such as sales taxes are being effected. These internet sales are a rather new thing and each state has different tax structures. How these are regulated looks a little up in the air for most states.