THE BLOG

This Week, Amazon Took Money Away From Me...

05/11/2010 05:12 am ET | Updated May 25, 2011

While the issue of Amazon.com canceling its affiliate relationship with all the Amazon Associates members based in the state of Colorado has already been covered here on HuffPost (see The Real Story on Amazon and Colorado), I wanted to bring a more personal perspective to the story because I am one of the affiliates who received the fateful notification from Amazon.

I signed up for the Associates program so many years ago that I can't remember a time when I didn't add an affiliate link to my blog entries about my books or just about anything else they sell that I wrote about. More recently, when I mentioned a cool gadget on Facebook or Twitter, I'd take the extra sixty seconds to make it an affiliate link because, well, why not earn the extra few pennies in revenue?

Fortunately, Amazon.com has never been a major revenue source for my online businesses (AskDaveTaylor.com), partly because their margins are so extraordinarily thin that my commission on a $50 sale wasn't even enough to buy a can of soda. Still, after years and years of membership in their program, I certainly didn't expect to be a pawn in the tussle between Amazon and the Colorado legislature, revolving around Colorado Bill HB-1193, but that's just what I've become.

Thanks a lot, Amazon. I thought we had a working relationship, but I guess I was wrong.

Here's what's so ironic: as Carol points out in the earlier Post article, Amazon firing all of us Associates doesn't change anything about their tax liability in the state. The only way they can affect that is to simply stop selling product to everyone in Colorado. Since they're not going to do that, they have instead decided that the collective loss of affiliate revenue from hundreds of Associates will cause enough pain that the legislature will revoke the law. I doubt it.

I'm not the only Associate who is upset with the situation. Nicki Hayes of Memolink shares this with me:

Memolink.com is fearful other online retailers will simply follow Amazon's actions and (wrongly) terminate their relationships with all Colorado affiliates. We are identifying and promoting merchants that are either already collecting sales tax in Colorado, or have carefully read the bill and recognize there is no need to terminate our relationship.

Everett Sizemore of CompareTheBrands.com has an even more radical response: he's hastening his move out of Colorado. His business was earning thousands monthly from Amazon and he can't afford the loss of revenue. He draws an interesting parallel:

Would you charge Colorado sales tax to everyone who buys a Volvo, no matter which state they buy in, simply because they subscribe to a magazine in which Volvo advertised, which just happens to be published in the state of Colorado? Compare The Brands is an online review publication that compares the features, quality and price of similar products made by different brands. The website is not hosted in Colorado; the visitors do not typically live in Colorado; and the merchants are not typically located in Colorado.

Colorado certainly doesn't want to lose entrepreneurs nor does it want to be unfriendly to new Internet business startups, but in this instance I have to say that it's Amazon, not the state, that's acting like a petulant child. The original HB-1193 was terrible and the final bill that was signed into law by Colorado Governor Ritter isn't much of an improvement, but the problem is inherent in the lack of an online sales tax (which Amazon has stated it's willing to pay, by the way).

Meanwhile, I get to be a pawn in this situation, an income stream shut off not because my continued participation in the Associates program somehow means Amazon will owe Colorado sales tax, but just because in the grand chess game, I'm apparently disposable.

Ya know what? It sucks.