Which came first: the chicken or the egg?
It’s a common question for new affiliate marketers – How do you get approved as an affiliate at an Affiliate Network, if you don’t yet have your affiliate site created?

The question came up again on my recent post titled HTML Tips: Anatomy of an Affiliate Link. Carlos asked:

Hi Lynn, I just got my domain name and hosting account and I plan to use this site to promote affiliate products. The question is about CJ.com … they asked me for my website on the affiliate application, but at the moment my site is empty. Will CJ approve my application anyway – or not? If not, what do I have to do first? What is the process if my website is only to promote things?

When you create your first affiliate site, or a new affiliate site that requires new affiliate relationships, it’s best to set the site up first.

The big concern that most people have is wasting time setting up an affiliate site, without knowing for sure if they will get approved to the affiliate program or affiliate network they want to work with.

The fact is, to get good favor with both Affiliate Networks – and with Google, your website needs to offer value. Meaning if you don’t monetize it at all, or your strip out all the promotions, it still offers valuable content to human visitors.

See: Warning: “Thin Affiliate Sites”

You have a few options…

If your affiliate site is ecommerce-style, meaning it looks like an online store and each product you feature simply deep links to the merchant’s product detail page, you can go ahead and create the entire site in good faith that the merchant (or network they work with) will approve your affiliate application.

You can start with direct links to the the merchant’s products and change them to affiliate links later, or leave out the links and add them in later.

Personally I don’t recommend relying on only one merchant as an Affiliate Marketer. I usually create an affiliate site with at least 3 merchants in mind. A primary merchant (the one I most want to work with or promote), a secondary merchant (as back-up, or for additional options to offer my market), and a third merchant is just good measure. When I can’t find a 3rd merchant, Amazon.com usually makes a good back-up option.

The reason is because sometimes merchants close up shop, discontinue their affiliate program, or make other changes that make you want to stop working with them. Never create an affiliate site around ONE merchant or ONE product.

So go ahead and create your affiliate site, and populate it with content and/or products. Fill out your affiliate applications, include the URL to your affiliate site, and include a note in the comments section of the application if they offer one on the form. Mention that this is a new site, and you look forward to working with XYZ merchant. Include your name and telephone number with the comment for good measure.

Another option is to create a related blog. This blog can be used to write content that leads into a specific recommendation, linking to specific products on your affiliate site, so you can funnel traffic from the search engines to your specific product pages. Populate the blog with good content, use it in your affiliate applications, and then add in the recommendations later once you are approved.

Getting Declined by Merchants or Affiliate Networks

This is going to happen. It even happens to me, and I’m a Super Affiliate. In fact, just yesterday I was declined by Priceline in the CJ Network. I had signed up to be their affiliate, with plans to promote them on my new GeekTrax website.

Often you’ll get declined because of something in your profile at the network, or because your website is unfinished or unrelated. In my case, the website(s) in my CJ profile were not related to travel, and so Priceline denied my request to be their affiliate.

In a case like this, I always write back to the merchant with a request for reconsideration. CJ (Commission Junction) has it’s own messaging system, so I simply wrote a short reply to them directly through the network, and explained who I am and what I do – and how/where I plan to promote their program.

Affiliate Managers get a large number of requests every day, but they ARE looking for quality affiliates that will promote their offers. Go the extra step in letting them know why they should approve your application.

And like I said, have back-up merchants in the wings in the case that your preferred merchant doesn’t approve you. You can always come back later and apply again once your affiliate site is more established.

Affiliate Networks vs Independent Affiliate Merchants

Apply for the Affiliate Networks in the beginning, but if you don’t get approved right away then seek out independent affiliate merchants. There are many affiliate programs outside of the major networks that offer instant approval.

Just go to Google and type in your main keyword and the word “affiliate” or “commission”. So you might type in “baby bedding affiliate” or “baby bedding commission” (without quotes) and look for independent merchants. You can also search ClickBank or $7 Offers for relevant info-products to recommend – these don’t require approval and are open to anyone.

Final Note…

If you’re really passionate about your topic and your business model, invest the time to set it up and get it established – even without a monetization strategy to start. Set up social media profiles and make a name for yourself in the niche. Build a readership and a following, and the merchants will be coming to you.

You can always use Google Adsense, or sell advertising, in the meantime. But don’t let the concern of declined affiliate applications deter you from starting the online business you want.

Best,

Also See:
Best Cheap Web Hosting
How to Start a WordPress Blog (Checklist)
How to Sell Products Online as an Affiliate
Affiliate Site Options & Examples

Earlier this month Amazon.com cut ties with Colorado-based affiliate marketers in response to Colorado’s new state law regarding sales tax.

Amazon is still in a pending legal challenge with New York, and has already dropped their affiliates in both Rhode Island and North Carolina after similar state tax laws were passed.

The Affiliate Tax gained the nickname “Amazon Tax” due to their aggressive response to the issue. At the moment, pending the outcome in New York, they immediately “fire” affiliates in any state that passes the Affiliate Tax. However, Colorado’s new state tax law is different…

In Colorado, the situation is different. The state’s new law doesn’t link paying the tax to the presence of affiliates; instead, it requires out-of-state retailers to help enforce collection of the 2.9 percent state tax that online consumers in Colorado are technically supposed to pay already, though few know about it or do it.

Each year, retailers would have to tell their customers what taxable items they bought and that they need to pay the tax to Colorado. Retailers also would have to turn over those documents to the state to help enforce the law.

Backers of the law say that Amazon still will have to comply, whether it has affiliates in Colorado or not. So why did Amazon fire the affiliates? To make a point in a larger battle over online sales taxes, and to deter other states from adopting Colorado’s approach, they believe. source

#######

We discussed the issue on this week’s episode of the IMTW Podcast. Paul Colligan asked me what I would do if I were an affiliate marketer based in Colorado…

3 Ways To Survive The Affiliate Tax Issue

1. Replace Merchants
2. Change Revenue Model
3. Flip Affiliate Site

There are 3 strategic actions that you can take if the Affiliate Tax gets passed in your state. Above I have prioritized them in the order that I would approach the issue personally. Selling a profitable affiliate site is always my last option.

If you have a profitable affiliate site with decent traffic & revenue, back up that entire site as-is before making any changes. Including your stats for the last 12-18 months.

Next I would do my research and aim to replace the merchants who dropped their affiliate program in my state. This is most likely going to include Amazon.com and Overstock.com for sure, with any number of merchants following suit.

Many merchants already have a physical presence across the states. Examples include Wal-Mart, PetSmart, and others that have retail locations.

You may find comparable merchants to work with as an affiliate, but you may choose to improve or change your revenue model as well. Ideas include:

• Test Google Adsense
• Sell Advertising to other affiliates not affected by the change
• Sell Advertising directly to the merchants you were working with

I would start with the merchants who closed their affiliate program, and go directly to them with your stats to negotiate a direct advertising deal.

If you don’t get a positive response there, approach other affiliate marketers in states that are not yet affected. You can negotiate advertising rates and funnel your targeted traffic to those affiliate sites.

And of course, you can always fall back on Google Adsense as an indirect way of earning money on the click-through’s to both merchants and affiliates.

The final option would simply be to sell the affiliate site while it’s hot – while your traffic & revenue stats are current. You can list websites for sale on Flippa.com for a quick turnaround, and sell your site to an affiliate in another (unaffected) state.

This is of course the reason I suggested you keep a backup of your affiliate site prior to making any changes or testing new options. You’ll want to take it back to it’s original state for the sale, so that the new site owner can simply swap out your affiliate links for their own and continue to operate the profitable site from there.

I hope this gives you creative ideas for dealing with Affiliate Tax issues, whether you are in an affected state or find yourself at some point in the near future.

Best,

Affiliate marketing is by far the easiest way to start making money online from scratch. What makes the difference between successful affiliate marketers and those who fail miserably is the marketing practices that each of them employ.

Here we are going to discuss proven tactics that will take your online income to the next level as an affiliate marketer. You are going to learn how to make money fast as an affiliate marketer and how to do long-term.

1. Building a mailing list.

This is going to be your number one priority and it’s the greatest asset in your online business. You therefore need an auto responder that can send messages automatically with prewritten content to your subscribers. You could then add an affiliate link in the content we send.

The auto responder is a really powerful tool because it allows you to accomplish one of the most important tasks by any affiliate marketer – following up with prospects. Even better it lets you do this hands free. Then you need to build a relationship with your list by providing as much timely and useful information as possible.

You often here the saying in this industry that “The Money Is In The List” well that’s true….but the money is in the relationship you have with the people I your list. Your list is your distribution channel. The relationship you create with your list is your business.

2. Create Curiosity About Your Affiliate Products.

This is done mainly to get your readers super excited about the product before you even introduce it to them. Think about it….if you’ve been told that there is something really awesome about to hit the market, don’t you look forward to learning about it? Of course yes.

In this case what you do is email your list and tell them that you found something exciting and you will be sharing with them in two days. you can then shares some of the products benefits or bullets with them.

Then email the next day and tell them its less than 24 hours before you reveal your discovery and name a few more benefits or bullets of the product. Then reveal your discovery on the third day.

You might even offer a limited bonus to the first x number of buyers. All you need is to get creative and appear like you are launching the product to our list.

3. Offer Your Own Bonuses.

You need to offer your own bonuses in order to create an advantage over other affiliates and make a tonne of money.

This is well worth the extra effort of creating your own bonuses to get your prospects to buy from you. While every affiliate is promoting the same identical product, only you are promoting your own additional bonuses which are different from other affiliates bonuses who might be using the same sales tactic.

4. Create Backend Offers.

These refer to the offers you make as follow-ups after an initial sale. The majority of your income is going to be generated by backend offers. For example you could follow-up a $ 27 e-book with an offer for a $ 47 piece of software that nets you double the commissions. Then follow-up with yet another offer for a membership site or similar product that generates recurring revenue.

With that snapshot of the 4 ways to make money fast as an affiliate marketer,take 2 minutes to read the next page http://www.bloggingmillionare.com/makemoney.html and you will discover how to flood your bank account with unlimited cash automatically,in just minutes from now.Even if you’ve no product,website or mailing list.

Article Source: http://EzineArticles.com/?expert=Morris_Gitonga

Ralph asks: I am a newbie and want to get started in affiliate marketing – Do you think affiliate marketing is saturated?

It seems every guru is selling an affiliate marketing program or have their own membership site to teach someone how to do affiliate marketing.
Do you think it is still possible for a newbie like me to get started?

Hi Ralph,

Affiliate Marketing is a method of online marketing and can be used in any niche.
As an affiliate marketer, I promote products online from backyard swings to bobbleheads – and everything in between. Most often physical or tangible products.

It’s a common misconception to think that Affiliate Marketing is all about selling ebooks or info-products about Affiliate Marketing. But you actually have Affiliate Marketing as a niche, and then Affiliate Marketing as a method…

For more on that, see: What is Internet Marketing (wake-up call!)

Affiliate Marketing is very similar to commission-based sales jobs you may be familiar with in the offline world. You earn commission on every sale you make.

The commission can be earned on a digital OR physical product, a service, or even a free offer (often called CPA for Cost Per Action, or Pay Per Lead programs).

As an affiliate, your job is to either bring the product to the market – or bring the market to the merchant. The more value you can add to that process, the more successful you’ll be as an affiliate.

Back to your question, Affiliate Marketing as a niche is quite saturated. It’s covered by industry experts who have been successfully promoting affiliate programs for as long as 10 years and do a very good job of teaching it to others. Rosalind Gardner and her Super Affiliate Handbook is one example.

That said, if you have a unique angle or target a specific micro-niche, or perhaps have a flair for detailed case studies, you stand to do well in this niche over time. It’s best to have your own experience and ultimately your own product to compete in the Affiliate Marketing niche.

But Affiliate Marketing as a model – that’s wide open to anyone of any experience level that is willing to position themselves well within a specific niche market.

It’s much easier than product creation, offering a service, or drop shipping even. As an affiliate you don’t have to carry inventory, process payments or deal directly with customers. You simply focus on the marketing, and on serving your market.

If you look around, you’ll notice there are affiliate programs available for just about everything you can imagine. Everything from Wal-Mart to Netflix to Elvis memorabilia. People are shopping online now more than ever, so this is a great time to get into Affiliate Marketing!

Best,

Last Friday I was in Atlanta, where I gave a talk on social media marketing at Dan Kennedy’s InfoSUMMIT conference.

I’m something of a fish out of water at a Glazer-Kennedy event. For example, unlike at Blogworld, I’m the only person in a room of 800 who has pink hair.

I wasn’t sure they’d be too receptive to what I had to say, but they surprised me.

They were warm, welcoming, and extremely interested in my no-shortcuts, no-magic-beans answers to their questions about how to use social media for marketing and business.

So in honor of Dan Kennedy, who sometimes styles himself as the “Professor of Harsh Reality,” I thought I’d talk today about some of the not-so-kumbaya aspects of social media marketing.

Harsh Reality #1: No one is reading your blog

As far as anyone can figure, there are about 200 million blogs around the world. Technorati tells us there are about 900,000 blog posts made every 24 hours.

The world is not waiting breathlessly to hear what you have to say about losing weight with acai berries, making big money as an affiliate marketer, or how to join your Secrets of the Breakthrough Millionaire Insider Guru Mastermind Platinum Club.

Me-too content gets ignored. Scraped and remixed junk won’t cut it. There’s too much good content that you need to compete with. And there’s no magic system that can replace sitting in front of your keyboard and producing something that somebody wants to read. (Or partnering with someone who can.)

If you don’t have a great answer to the question “Why should anyone read your blog?” you’re going to be pretty unhappy with your results. That’s why we spend so much time teaching you how to produce better, smarter, more effective content.

Harsh Reality #2: You’ve got to give (some of) your best stuff away

It’s very natural to expect to get paid for what you do. And you should have a business model that leads to exactly that.

But first, you’ve got some dues to pay.

Commenter Corree Silvera mentioned her favorite Brian Clark quote from this year’s Blogworld Expo:

Don’t sacrifice a lot of money later for a little money now.

The answer to the question in Harsh Reality #1, “why should anyone read your blog?” is that you’re going to give away some of your best, most valuable, most life-improving material away for free, within a well-defined content marketing plan.

Just remember Sean d’Souza’s bikini concept. You can give 90% of it away, but there will always be people who will happily pay to see that last 10%.

Harsh Reality #3: It will eat your life (if you let it)

Social media marketing would be pretty easy if we never had to eat, sleep, shower, or hang out with our kids.

But if doing those things is important to you, you’re going to have to set some boundaries.

Know what you want to do with social media, keep yourself focused, and set a timer if you have to. The tools are amazing, but so is their power to distract you from what you’re trying to accomplish.

Harsh Reality #4: Social media hates selling

Is there anything more pitiful than that guy who gets on Twitter and won’t shut up about how he can put you in a condo today with no money down despite your lousy credit rating? Even the spammers are blocking this dude.

It’s really hard to sell products and services in social media, mostly because this audience hates salespeople worse than they hate Microsoft. You may be able to get some limited success out of it, but more likely you’ll be banned, blocked, shunned, and abused.

Instead of promoting a product or service, promote fantastic content. Promote a great special report or an amazingly valuable email course. Promote wonderful stuff that you’re giving away.

Use excellent free stuff to build authority and trust. Then you have the right to make an offer and possibly do some business. Not before.

Harsh Reality #5: What they say is a million times more important than what you say

Your marketing might be beautifully executed. You might have a special report that goes more viral than H1N1, a great-looking blog that hits Digg twice a day, and an email marketing sequence that copywriting genius Gene Schwartz would have been proud to write.

If your reputation sucks, none of it matters.

People with lousy products, crummy business practices, and shady backgrounds get found out. And word spreads with frightening speed.

Treat people right, because if you don’t, you will be exposed. And it will not be pretty.

Harsh Reality #6: A blog is not a marketing plan

Blogs are cool, but a single useful tool isn’t the same thing as a solid business and marketing plan.

Blogs are just one way to get your best content out there, and they work best when you pair them up with email autoresponders, special reports, Twitter, and any of a dozen other powerful tools.

Just hanging out and being cool isn’t enough. If you’re in social media to do business, you have to develop a strategy for taking mildly interested strangers and turning them into raving fans . . . and customers.

Harsh Reality #7: You don’t get to opt out

Businesses that think they can ignore all this “Twitter stupidity” tend to get painfully rude awakenings.

The conversation will happen with or without you. You definitely don’t need to respond to every chucklehead with a Facebook account (and you shouldn’t), but you need to keep your ear to the ground, and you need a clue.

OK, enough about harsh reality already! If you want our best advice about what to do to create a great online business, subscribe to Internet Marketing for Smart People, the Copyblogger email newsletter. It’s some of our best stuff, no junk, no fluff. And of course we will never, ever spam you or share your information with anyone.

About the Author: Sonia Simone is Senior Editor of Copyblogger and the founder of Remarkable Communication.

In my view, social media represents the greatest entrepreneurial opportunity of a lifetime. But there seems to be a mindset that holds people back from making the most of it.

One is thinking of yourself as a blogger, or an affiliate marketer, or whatever other small box you come up with, instead of thinking of yourself as a media producer.

The other is thinking because the technology is new, the principles of audience engagement must be new and specific to new media as well.

Maybe it’s time for a new way of thinking?

Sure, social media is shiny and new and powered by amazing technology. And you have to understand this ever-evolving technological context in order to thrive.

But the fundamentals of human engagement are an existing art. We can look back at centuries of storytelling, music, poetry and theatre to understand those fundamentals, and see how it relates to the here and now from people who also understand the shiny and new.

That’s why I’m so excited about Audience Conference, happening November 5th and 6th in New York City.

Audience Conference: Where timeless principles meet powerful new media

What if you could learn from new media titans like Mike Arrington of TechCrunch, Jason Calacanis of Mahalo, and Crayon’s Joe Jaffe, but also side-by-side with people like Dan Farber of CBS News, radio programming expert Bruce Warren, and Ethan Kaplan of Warner Bros. Records?

These are the people who understand the intersection of the timeless with the power of new technology. Check out the entire speaking line-up here (I’ll be speaking about using the classic principles of David Ogilvy to create successful web properties).

Save $50 off the conference fee (but hurry)

If you’re going to be in NYC for Ad:Tech, this is a no brainer. Stick around for Audience Conference and gain some perspective you can really use in 2010.

Otherwise, flights are cheap right now, so I hope to see you in New York for my last conference appearance of the year.

And if you use the discount code “copyblogger,” you’ll save $50. I’m not making a dime off of this promotion – I just happen to think Audience Conference will end up being the most useful and engaging conference of the fall.

Sign up today and join us at Audience Conference.

About the Author: Brian Clark is founder of Copyblogger and co-founder of DIY Themes, creator of the innovative Thesis Theme for WordPress. Get more from Brian on Twitter.

I read a great blog post by Jason Parker at proIMer.com on advanced affiliate marketing strategies that I wanted to share with you, and expand on.

A few weeks ago Nicole Dean shared some great email marketing tips with us here during her guest blog tour. Nicole’s methods work great for anyone, whether you’re promoting your own products or offers, or promoting products as an affiliate.

I wanted to share Jason’s post, and his strategy, with you as a follow-up to Nicole’s series on email marketing…

Awhile back I mentioned that I’m not a big fan of the squeeze page method. I went on to clarify that I do build lists on my niche affiliate sites, but for further clarification I should say that I’m not a big fan of squeeze pages that add zero value to the process. You know the types of pages I’m talking about: the offer is so lame, or even non-existent, to the point that they are forced to BUY clicks just to get anyone to look at it.

Not all squeeze pages are bad, and the strategy is actually sound if you use it as a means to add value to the buying process – and to serve your market.

That’s exactly what Nicole shared with us in her series, and Jason Parker went into some advanced detail in his post about how to build a list – and why you would want to do that as an affiliate marketer.

The Way Of The Advanced Affiliate – Automated Email List Building

He also offers a free recording on Ultimate List-Building Secrets right there in the sidebar, which I hope to listen to as soon as I get some free time.

My point is that none of this is rocket science, and if you look around you have everything laid out for you. Both in blueprints and tutorials, and in live examples. All you have to do is take action.

I’ve been doing that more myself lately, and like I said in a previous post – it’s really paying off. And not just in upfront or immediate sales/income, but in long-term passive revenue as well.

Think about it: you put in the work upfront to create a product – maybe an audio or a short report, or use PLR or Resell Rights – and you set up an opt-in page and an autoresponder series. Like I said, not rocket science, just work. And not even hard work. Just a matter of putting the elements together in order. Period.

Once you do that, it will continue to work for you on auto-pilot month after month, year after year.

If you don’t yet have a list-building strategy in place with your online business model, now is the time to do that. Look over Nicole’s series. Look over Jason’s post. And of course if you have any questions, leave them in the comments section below.

Best,

p.s. If you are just starting your first mailing list or autoresponder, you’ll need an account with Aweber. You can use this link to get a free trial to start. Aweber is the industry leader, and is hands-down the best mailing list manager out there. If you think you might start out somewhere else and then move to Aweber later… don’t. A lot of us made that mistake, and you’ll end up losing ~90% of your list in the process. If you’re going to build a list, make it count!

Last week Nicole Dean was on vacation with her family here in Tennessee, which is where I live, and so we took the opportunity to get together and see some of the local sites.

We hiked Burgess Falls and toured Cumberland Caverns, and basically just hung out and had a fabulous time. This is not the first time I’ve met Nicole in person – we had roomed together at Willie Crawford’s event earlier this year too.

Nicole and I have become fast friends, and in addition to being an all-around fun person to hang out with… Nicole is truly brilliant. We talked for hours, shared resources, and even hung out here in my home office (where she totally raided my book shelf! ). Not only did I welcome her into my home, but I’ve also invited her to my blog – and would love for you to welcome her here too as she ‘takes over’ here at ClickNewz for the week…

Nicole is doing a Summer Blog Tour across the blogosphere. She is making appearances as a guest blogger at places like Sparkplugging, Bob “the teacher” Jenkins’ blog, Jimmy D. Brown’s blog – and this week: here at ClickNewz!

Her topic for us is “5 Ways to Promote an eCourse other than Adwords”. This should make for an excellent series and some great resources, no matter what you’re selling online.

Nicole is one of those people that practices what she teaches. She is a niche affiliate marketer, and a true online business owner, managing multiple websites in a wide variety of niches. She has a strong sense of integrity, a smart way of doing things, and personally… I pick her brain every chance I get!

We’ll be rooming together again in a couple of weeks for StomperNet Live 8 in Atlanta, and we’re also both attending the NAMS Workshop in August as well.

I hope you enjoy Nicole’s guest appearance here at ClickNewz, and her series on marketing. I’ll be reading along as well so I’ll join you in the comment area for the discussions following each post…

Give Nicole Dean a warm welcome, and Enjoy!

Best,

p.s. Things have been a bit quiet around here, so Nicole’s timing is fabulous. I’ve been super busy reworking Self-Starters Weekly Tips, which is my primary site and online community. So that’s where I’ll be this week while Nicole is taking over the reigns here at ClickNewz. Thank you, Nicole!

I have (very quietly) reopened membership into my Private Brainstorming Group, which will close again in the next 24 hours. Last time it remained closed for 6 months, so if you’d like to join us now would be a good time to do that!

There is a lot of upset over the new internet sales tax laws that apply directly to online sales, and are already hitting some affiliates hard.

These laws require online merchants to collect state sales tax if they have local affiliates in those states. The states currently affected include California, Hawaii, North Carolina and Rhode Island – but many other states are in the process of following suit…

Merchants have always been responsible for sales & use tax on sales made within their own state whether that be online, offline, or mail order sales. The new laws propose that online merchants should also pay state sales tax in certain states where they have affiliates. The argument being that their affiliates represent a “physical presence” in that state.

A handful of cash-strapped states have weighed laws that would use the presence of affiliate marketers to force e-commerce companies into collecting sales tax. source

The New York State legislature has included a provision in their $122 billion budget. About $50 million of this is meant to come from a tax on some online retailers. source

How will the new internet sales tax laws affect you, as an affiliate marketer or as an online merchant? Good question.

So far the damage appears to be fairly contained, directly affecting affiliate marketers in the 4 states mentioned and larger online retailers that ship physical products.

You have probably already heard the news of Amazon.com dropping affiliates in certain states, but here is a list of merchants that dropped affiliates in New York: Merchants that Dropped New York Affiliates.

Merchants are fighting back

Dropping their affiliates in the affected states is a direct message to that state regarding their disagreement with the new internet sales tax laws. Basically, they are refusing to pay the additional state sales tax by pulling their affiliate program in those states.

“It’s painful to have to terminate these relationships with affiliates, simply because they live in states where counterproductive (and likely unconstitutional) laws are being passed,” said Patrick Byrne, Chairman and Chief Executive Officer of Overstock.com. source

The states that are looking at passing this provision to their sales tax law obviously want to increase their tax revenue. Unfortunately, given the widespread response by major online merchants, the new laws will create hardship on their local citizens – ultimately damaging their local economy even further.

Imagine for a moment that you live in New York, and earn a healthy 6-figure income from your affiliate sites. You pay income tax, and contribute to your local community. You are one person. In steps this law, your primary merchants drop you as an affiliate, your income drops to below poverty level practically overnight. (Overstock.com dropped 3,400 New York Affiliates)

Amazon.com and Overstock.com, two of the internets largest retailers, have both filed lawsuits against the state of New York. Overstock dropped the NY affiliates, while Amazon decided to pay the sales tax on sales made by NY affiliates pending the outcome of the lawsuit.

The outcome of those lawsuits, and each states response to their lack of participation in sales, will ultimately influence the future of online sales and affiliate marketing.

Personally, I applaud the merchants for taking a stand, and the affiliates who have written to their state representatives regarding the new internet sales tax laws. Affiliates in the affected states are currently taking the hardest hit, but this is something we should ALL be paying close attention to.

Will the Internet Sales Tax Laws affect you directly?

If you are an affiliate in California, Hawaii, North Carolina or Rhode Island then you have probably already experienced immediate termination by certain online merchants. What about the rest of us? You need to keep an eye on your state, because you may just be next.

The question has been raised by independent merchants, regarding their sales tax obligation in these states where they may have active affiliates. To date, the laws are obviously targeting the larger online retailers.

New York, for example, has a $10,000 threshold:

If an online retailer did not make at least $10,000 in gross sales to New York residents, they are not obligated to collect sales tax. source

It seems obvious that they are also targeting the sale of physical products. But don’t get too relieved just yet if you only deal in ebooks and virtual products. New York also wants to impose a 4 percent sales tax on online downloads of music, ring tones, games, movies and other media from online retailers. source

Are smaller retailers and info-products next on the list? Obviously that depends on each state, the outcome of current lawsuits, and the response from buyers and sellers alike. As I said, this is definitely something we all want to keep an eye on.

In the meantime, I suggest “business as usual”. Do not let this deter you from setting up affiliate sites or starting your own affiliate program. I live in Tennessee which is so far unaffected, so I plan to continue managing my affiliate sites and setting up new ones.

If you live in the affected states, and worked directly with merchants who are declining affiliates in those states, look for independent merchants to work with. Worst case scenario, you can sell profitable affiliate sites to someone in another state. Partner with someone in another state. Remove affiliate links and monetize with Adsense and advertisers temporarily until things (hopefully) resolve. Create your own info products, etc.

I’d love to hear your thoughts on these new Internet Sales Tax Laws that seem to be spreading through the states like wildfire. And affiliates from California, Hawaii, North Carolina and Rhode Island – We’d love to hear from you! What are you experiencing on your end, and what is your recovery plan?

Best,

Resources Related to Internet Sales Tax Law:

• New York State Sales Tax Negatively Impacts NY Affiliates
• Internet Taxes, Wikipedia
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