Dear Jeff,
Thank you for your letter today, informing me that after seven years of being one of your affiliates — and having earned for you about $150,000 in that time — that you “deeply regret” unilaterally terminating my contract with Amazon to be an affiliate. I also especially appreciated the part where you reassured me that this action wouldn’t affect my ability to keep buying from your company. Nice touch.
I deeply appreciate that after so many years of supporting your company, and earning my 4.5% cut over those years (as I figured today, looking at my stats), that you’ve decided that I should be a pawn in your fight with my state. That type of loyalty really makes me want to support you in the future, should you restore your program. It also encourages me to want to continue shopping with you.
Jeff, I’m fortunate. Unlike the case with many of your affiliates, this won’t have a big economic impact on me. Having affiliate links here on my personal blog is more a hobby than anything else. I’ve got a successful day job.
But I don’t like unfairness in general. I also don’t have a lot of time to waste. And right now, I feel like you’ve just delivered a double-dose of both.
Cut the Program & Keep the Links
I’m not sure how many affiliate links I have on the blog. Not that many, maybe 25 to 50 in all. But until about an hour ago, those links were worth something to you. Now, because of your squabble over the sales tax issue, you’ve decided to just take for free what you’d previously paid for. If I don’t find time to track down and kill those links, you keep grabbing orders that get made through them and keeping the cut I previously received.
Over the next day or so, you’re going to get a lot of orders this way. Bigger affiliates will eventually move. Plenty of smaller ones won’t be bothered to change. But those small ones that don’t will add up into plenty of money for your company. You, of all companies, really understand how all that long tail stuff can mount up, right?
I’m not a big fan of class action lawsuits. They just enrich lawyers and let the plaintiffs end up with a $20 coupon to buy goods from the same companies that wronged them in the first place. But thinking about all those links that will keep earning you money for free, I kind of hope someone files a suit against you. They probably won’t win, but you deserve a little hassle, too.
I Get To Be Your Pawn With Only 10 Hours Notice?
You want to just up and terminate my contract with you with only ten hours notice? Hey, to be honest, I don’t even know what my contract is — or was — with you. I suppose you granted yourself these rights. Most big businesses tend to do so.
But really, it only occurred to you today to give your California affiliates this notice? I’ve checked. You’ve sent nothing to us about this. Nothing yesterday. Nothing in the past month. Nothing at all, not until now. Since you clearly want to make us your pawns, maybe you could have told us sooner?
Then again, it might not have made a difference. See, I think you should collect sales tax. I don’t care what your “it’s unconstitutional” arguments are. Go argue them in court, with the people you’re upset with. But collect sales tax in the meantime. I’ll give you a simple reason why. It’s fair.
Let’s Make Amazon a Fair Trade Company
First, it’s fair to the affiliates that have helped build your business. You could collect sales tax and continue to have them support you, rather than suddenly make them all angry. Angry perhaps at the state, which is what you hope. But also angry at you.
For another, isn’t it time you grew up and became a real business that can compete against the bricks-and-mortar shops you undercut? Can’t you still win against them, even if you play on a more level playing field?
Of Borrowing Stores & Exporting Revenue
Look, I like to save money as much as the next person. And believe me, when I’m walking around in a Best Buy or Fry’s Electronics, I’m checking prices against Amazon.
But, I’m also feeling guilty if I’m checking out a product for a hands-on verification in these other shops that I might buy from you. I feel so guilty that that unless there’s a really big price difference, I’ll stick with them. After all, I like having them there. They give me the one thing you don’t. The ability to really experience an actual product — though with your great return policies, that’s growing less of an issue.
Still, for some people, that 8.25% tax (at minimum, since some counties and cities tack on more), can be a big enough difference to send those in-store shoppers — and in-store testers — heading over to your place.
That’s a pretty nice business to have, isn’t it? Merchants who invest in real stores effectively serve as your stores, too.
Some of these stores guarantee to match your prices, but they can’t beat that sales tax difference, can they? So when you write to me that the new California sales tax law is “supported by big box retailers, most of which are based outside of California,” I don’t really care.
Surprise. While I’m an Amazon affiliate (or was), I actually support those big box stores, too. And even if they’re outside California, they do collect sales tax — which in turn supports my state.
Affiliates Are Also Californians
Oh, yeah. That’s another issue. Not only are you sucking purchases (and thus potentially jobs) out of my state and undermining those retailers, but you’re also not letting the state earn off the sales tax like those retailers who actually are based here do. That makes me feel really good as a Californian.
Now sure, lots of us affiliates here have been earning off of you — and thus ourselves being taxed by California — so the state has been getting revenue from you indirectly. But that brings me back to the fairness.
Collect the Taxes; Fight Without Us Pawns
You could collect the tax, voluntarily. You could keep your affiliates, give back to the state, be more competitive with those retailers here and not cause all this ill-will that’s more about enriching your company than fighting the good fight.
So, Jeff, if you want to fight this, go ahead. But don’t make us your pawns. Take an hour of programming time to make a change to start collecting those taxes, just like you already seem to do in states like New York where you have a physical presence.
I like Amazon. I like buying all types of products from you. I depend on you especially these days for music and video rentals. Don’t make me hate you. Don’t make me seek out an alternative to your affiliate programs or worse, an alternative to buying from you period.
Thanks,
Danny
NOTE: For my search marketing readers, wondering about affiliate links as paid links (which are bad with Google), I usually nofollow these here, in the odd posts where they appear. Older ones might not have nofollow. But Google’s said fairly recently that most major affiliate programs do not need to have nofollow attached to them.
Also, I don’t pretend to understand Amazon’s arguments with California or other states. I claim no expertise in this. Violet Blue has written a nice background piece on some of the issues here that you might find useful. There is also round-up coverage on Techmeme.
While I don’t know the legalities, I do know that affiliates in California are clearly being used by Amazon in a fight it has with their own state. I think Amazon can fight that fight without penalizing them. And it should.
Danny Sullivan is editor-in-chief of Search Engine Land and also maintains a personal blog called Daggle, where this originally appeared. It is reprinted with permission.
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