CA Affiliates getting "The Letter" from Amazon

notice of potential termination

[LifeinAsia]

Well, we've been fighting it for years, but it looks like the end is very near for California Amazon affiliates. Just got the e-mail today from Amazon.

I expect similar termination letters from most of our affiliate partners soon. :(

I won't bother posting it here (besides being against ToS, it's not that much different from the ones sent to other states), but it basically says all CA-based affiliates will be terminated effective when the law goes into effect.

[LifeinAsia]

And just got the letter from Overstock.

[CPC_Andrew]

When being progressive goes wrong.

[keyplyr]

Anyone have an email list of legislators to plead our case to?

[dpd1]

The thing that surprised me was that they own SmallParts. I had no idea.

[onepointone]

I saw on another forum where CA (canada) affiliates of some merchants were getting the same termination letters designated for CA (california) affiliates.

Somebody did an address search for 'CA' but forgot the 'thinking' part. doh!

[keyplyr]

Just got a follow-up Amazon email saying:

Unfortunately, Governor Brown has signed into law the bill that we emailed you about earlier today. As a result of this, contracts with all California residents participating in the Amazon Associates Program are terminated effective today, June 29, 2011.

And when accessing my Amazon Affiliate account page:

This account is closed and will not generate referrals. Access to this site is for historical purposes only.

[LifeinAsia]

Anyone have an email list of legislators to plead our case to?

The majority don't care (hence the budget). They've been trying for years to ram this through. They don't care about the little buys when they're trying to make enough money to survive. Once they lose their jobs and are on the dole, THEN all of a sudden they care about them!

[dpd1]

I never made any money from it anyway. But I feel for the people that do. Pretty sure there's ways around it though.

[keyplyr]

I agree, I didn't make a lot from Amazon either but it was an additional set of products offered to my customers adding to the quality of my web site.

The irony is of course, that small biz owner will loose income, thus pay less in State income tax; Catch 22. Another down-side is it forces eCommerce away from California. If all States do thus, I'll be seeking off-shore servers I guess.

[ken_b]

thus pay less in State income tax

I don't get that logic, maybe I just don't understand it right.

You sell a book for $100.00, your commission is what 4.5 - 7% (maybe $7.00) you take a few business deductions and you pay income tax on maybe $3.50.

So what's the max tax in CA, lets be generous and say 11%, the state gets $0.38.5 (38.5 cents) from the site owner in the form of income tax.

Or they can get, what 7 - 8% of the $100.00 from the book buyer.

So $0.38.5 vs $7 - 8.00 for the state in the form of sales tax.

Unless my math is way off, which it could be, it seems amazing states haven't done this before now.

[LifeinAsia]

The irony is of course, that small biz owner will loose income, thus pay less in State income tax;

Plus have less money to spend on local businesses, further decreasing state income tax.

[dpd1]

The bottom line is... Everybody knows what's really sinking CA. But none of the politicians here have the guts to say it. And even if they want to, they can't... Because it's too late to do anything about it. So instead, they keep trying to stick a band-aid on a giant wound that's bleeding all over the place. This is just another one of the band-aids.

[CPC_Andrew]

Prisons. California's economy is so messed up.

[LifeinAsia]

Unless my math is way off, which it could be, it seems amazing states haven't done this before now.

A few problems with the math:
1) All the affiliates get fired, so the state still gets $0 from Amazon.
2) With the affiliate fired, instead of the state getting $.38 in income tax from the affiliate, now they're getting $0.

Also, assuming the affiliate spent his leftover $3.12 (not to mention the $3.50 in business expenses) at local businesses, that money would have been revenue for those businesses, resulting in additional income and sales taxes for the state. With that discretionary income gone, the state also loses that tax revenue as well.

[ken_b]

A few problems with the math:

I knew I should have paid more attention in pre-school! :)

[dibbern2]

Its not about the numbers, so don't waste your time trying to see that argument.

Its about protecting local b&m's against big nameless on-line giants.
Protect local businesses = good politics. You help the local chain who sees sales tax as an unfair disadvantage. You level the playing field.

Webmasters are too tiny a group to even be considered in this trend.

[keyplyr]

Its about protecting local b&m's against big nameless on-line giants.
Protect local businesses = good politics.

That doesn't play. There are interviews all over from small biz owners who are saying without Amazon selling there products for them, they wouldn't survive this economy (small local video stores as example.)

[LifeinAsia]

Protect local businesses = good politics.

Most of the "local" businesses don't have the money that went into this lobbying effort. The money came from the deep pockets of Best Buy, Target, Barnes & Noble, and the like.