Tag: amazon

Apr 19 2010

Help Repeal The Amazon Tax (Colorado HB10-1193)

Colorado HB10-1193 – also known as the “Amazon Tax” – really upset me as I wrote about in Amazon Fires Its Affiliates in Colorado (Including Me) Because of Colorado HB 10-1193.  While I discovered a partial solution via a service from a company called Viglink which I wrote about in I’m An Amazon Affiliate Again – Sort Of I’m still really annoyed with the myopia of our Colorado state representatives around this issue. 

I’m also disgusted by the protectionist turn this took as our governor, many representatives, and several progressive organizations that I’ve supported called for a ban on Amazon because of the need to “level the playing field for local merchants.”  When I talked to a number of folks about this, including the organizations that I had previous supported, they demonstrated that they didn’t really understand the issue, were getting confused about states rights vs. federal rights (an issue I expect we’ll see come up a lot over the next few years given our federal, state, and local government search for additional revenue wherever they can find it), and didn’t get that a protectionist attitude was actually offensive to most business people (except, presumably, those being protected by the government.)

Finally, legislation like this is completely tone deaf to both the growing impact of technology on our society as well as a huge shift in the way information based goods are bought and sold.

I’ve been told by several Colorado representatives that didn’t support this bill that there is no way this tax will be repealed, but I haven’t given up yet.  I’ve enlisted my friend David Binetti to crank up another Twitter Campaign To Repeal Colorado’s Internet Tax.  If you are a Colorado citizen with a twitter account, it’ll take less than a minute to tweet out this message along with delivering a physical letter to your specific representatives. 

Let’s make sure our representatives know that this is a piece of legislation that should be repealed.

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Mar 31 2010

I’m An Amazon Affiliate Again – Sort Of

On March 8, 2010 Amazon fired me as an Amazon Affiliate because of Colorado HB 10-1193.  I proceeded to have a dozen different conversations (email and live) with several of my state representatives, including one of the co-sponsors of the bill, and each conversation made me more incensed at the abject stupidity and lack of understanding of the dynamics surrounding the situation.  Ultimately, the argument came down to one of protectionism – e.g. “we have to protect our local merchants so Amazon shouldn’t get an unfair advantage by not having to charge state tax.”  I could rant about this for a while, but I’ve got better things to spend my time on at this point.

I’ve been an early Viglink user for a while.  Niel Robertson, the CEO of Trada, introduced me to Viglink’s founder Oliver Roup and I agreed to be an alpha tester.  While we aren’t an investor, I’m intrigued with what Viglink is doing and I’m already a big fan.

Last week I realized that all of my going forward Amazon links (and other links to merchants with an affiliate program) were getting rewritten by Viglink.  As a result, on a going forward basis, I was getting Amazon affiliate revenue (via Viglink) for anyone that clicked through one of my links and bought something on Amazon. 

That was cool, but I have a gillion of old links using my Amazon affiliate code that no longer works.  I asked Oliver if he could rewrite all of the old links also.  Here’s his response:

“We have coded this and deployed it.  As a result, all your dead Amazon affiliate links will be overwritten with our affiliate code and the revenue will be credited to you.  What’s more, we just created an affiliate program against ourselves – any links you have to us on your blog will automatically be affiliated and you will receive 10% of the revenue from any customers we get as a result of those links.”

Awesome!  If you are a fired Amazon Affiliate in Colorado, take a look at Viglink.

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Mar 8 2010

Amazon Fires Its Affiliates in Colorado (Including Me) Because of Colorado HB 10-1193

I’ve been an Amazon Associate (Amazon’s affiliate program) for many years.  Today I got the following notice in my Amazon Associates account.

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and I woke up to the following email.

Dear Colorado-based Amazon Associate:

We are writing from the Amazon Associates Program to inform you that the Colorado government recently enacted a law to impose sales tax regulations on online retailers. The regulations are burdensome and no other state has similar rules. The new regulations do not require online retailers to collect sales tax. Instead, they are clearly intended to increase the compliance burden to a point where online retailers will be induced to “voluntarily” collect Colorado sales tax — a course we won’t take.

We and many others strongly opposed this legislation, known as HB 10-1193, but it was enacted anyway. Regrettably, as a result of the new law, we have decided to stop advertising through Associates based in Colorado. We plan to continue to sell to Colorado residents, however, and will advertise through other channels, including through Associates based in other states.

There is a right way for Colorado to pursue its revenue goals, but this new law is a wrong way. As we repeatedly communicated to Colorado legislators, including those who sponsored and supported the new law, we are not opposed to collecting sales tax within a constitutionally-permissible system applied even-handedly. The US Supreme Court has defined what would be constitutional, and 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.

Your Associates account has been closed as of March 8, 2010, and we will no longer pay advertising fees for customers you refer to Amazon.com after that date. Please be assured that all qualifying advertising fees earned prior to March 8, 2010, will be processed and paid in accordance with our regular payment schedule. Based on your account closure date of March 8, any final payments will be paid by May 31, 2010.

We have enjoyed working with you and other Colorado-based participants in the Amazon Associates Program, and wish you all the best in your future.

I’ve been a supporter of Governor Ritter since his campaign for governor and have worked hard to positively impact Colorado’s software / Internet / technology / entrepreneurial ecosystem.  Over the past two months, I’ve privately expressed my outrage over HB10-1192 and HB10-1193 to several people in Ritter’s administration.  I watched as numerous people in the software / Internet community tried their hardest to help our legislators, the governor, and their staffs understand why this is such a huge step backwards for Colorado.  I was told several times “don’t worry – we’ll take care off all the silly stuff.”  There seemed to be enough folks showing up to discuss this that I thought rational minds would prevail.

I made a huge mistake.  I should have come out very publicly about this when I first heard about it, made sure everyone that I supported during the elections that supported these bills (including one of the co-sponsors) knew my opinion and understood why they had the potential to be so detrimental to the software / Internet / entrepreneurial climate in Colorado.  Shame on me for not being more aggressive, although there are some days I definitely feel like there are only so many fronts I can deal with outside my very full time day job.

I’m not at all surprised by this action on Amazon’s part.  I expect the Internet Affiliate business in Colorado will completely die within the next thirty days (every company that has an affiliate business will turn off all of their Colorado-based affiliates.)

I then received the following email from Colorado Governor Ritter

Gov. Bill Ritter issued the following statement today criticizing Amazon.com’s decision to abruptly end its financial relationship with Amazon Associate businesses in Colorado:

“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.

“My office worked closely with Amazon’s affiliates and associates to modify House Bill 1193 to specifically protect small businesses, avoid job losses and provide a fair, level playing field for on-line retailers and Main Street, brick-and-mortar retail shops alike.

“Amazon’s position is unfortunate, and Coloradans certainly deserve better.”

I’m especially disappointed in the Governor’s statement – it’s completely tone deaf to the actual issue and what Amazon is clearly stating.  I’ve heard several people saying “Amazon is the problem” or “well – this is good – now people will buy locally.”  Neither of these statements is valid – Amazon behaved like a rational company in the face of government regulation that had no upside for them and substantial downside.  Also, this has zero impact on consumer purchasing activity as this doesn’t impact the end customer of Amazon products in any way.

Rather, the many small businesses and solo entrepreneurs who make money off of Amazon’s affiliate program just lost a revenue stream (which, by the way, is used to employ people and pay state taxes.)  Colorado just got a big black eye in their historical effort to be a place that is friendly to business, especially high growth technology companies.  And our state government likely now has lost more tax revenue than it was going to gain through the bill in the first place while simultaneously damaging the revenue streams for many small Colorado businesses.

The only logical solution in my book is what Amazon says in paragraph 3.

There is a right way for Colorado to pursue its revenue goals, but this new law is a wrong way. As we repeatedly communicated to Colorado legislators, including those who sponsored and supported the new law, we are not opposed to collecting sales tax within a constitutionally-permissible system applied even-handedly. The US Supreme Court has defined what would be constitutional, and if Colorado would repeal the current law or follow the constitutional approach to collection, we would welcome the opportunity to reinstate Colorado-based Associates.

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Jan 22 2009

Boulder AWS Anonymous Email Group

Boulder AWS Anonymous held its first meeting last week, and there were eleven attendees despite the fact that the meeting had been inadvertently scheduled at the same time as Obama’s inauguration. Attendees represented a wide variety of uses and potential uses of Amazon Web Services, ranging from hosting popular websites and application development to load balancing, autoscaling, and internet telephony. The group is encouraging anyone in the area interested in getting updates to join their Google Group and/or to attend the next meeting at The Cup, 1521 Pearl St, at 10:00 am on Wednesday February 18.

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Dec 30 2008

The Dynamics of Full Disclosure

A meme that regularly goes around the blogosphere is “full disclosure.”  When someone blogs about something they have a financial interest in (e.g. an equity interest in a company) or something they benefit from financially (e.g. affiliate fees), should they include a “formal disclosure.”

I received the following email today:

“I appreciate all your book recommendations over the last several posts.  It’s a great service.  However, with full disclosure being the norm these days, you might want to mention that you benefit from book sales via your Amazon affiliate status.  Pardon me if you have previously done this.”

So – for full disclosure, I benefit from book sales via my Amazon affiliate status.  I don’t pay close attention to how much I get from this as I’m much more interested in the data underlying which books you dear reader actually buy and read as one of the features of the affiliate program is all the data I get from it.

My purpose of having an Amazon affiliate code is three fold:

  1. I want to understand how the Amazon affiliate program works (and evolves).  This helps me with all of my investing activity.
  2. I am obsessed with the underlying data.  All of the various affiliate / advertising programs I have on this blog provide me with a variety of data.  I learn from this and can then help the companies I’m an investor in understand what appeals and doesn’t appeal to a publisher, using me as an example.
  3. I make enough money to get a discount from all of the books I buy at Amazon each year.

Summary: #1 and #2 help me as an investor.  #3 generates a modest amount of money to me.

Let’s focus on #3 for a minute since this I think this is the core of the “full disclosure” email I received.  In my case, I buy over 250 books / year at Amazon (I don’t know the exact number, but I’m estimating five a week which, based on what is on my Kindle along with the infinite pile of unread books, is low.)  Since I’m buying a lot more on my Kindle these days, let’s use the average Kindle price of $10 which is also going to be low given the number of hardcover books in the infinite pile.  That’s $2,500 per year of books.  I expect that number is off by at least 100% – so I’m spending somewhere between $2,500 and $5,000 per year on books at Amazon.

I just ran my earnings report from Amazon for the past 12 months.  Via my affiliate code, I’ve sold a net of 666 items (eek – subtle message in that – it’s actually 675 with returns of 7 and refunds of 2.)  I’ve generated $16,247.89 for Amazon and received $1,072.89 in referral fees.

So – even if you take my $2,500 number, by buying books via my blog you’ve effectively helped me get a 40% discount from Amazon (20% if you take the $5,000 number, which I think is more realistic given my book buying habit.)

In either case, the financial beneficiary here is Amazon, not me, although I guess you could argue that I’m ahead by whatever my effective discount is.  If my “book recommendations is a great service”, presumably this won’t really bother anyone (it might not have regardless). However, if every post I put up had an italicized “summary” of this post (or a link to it), that would probably get annoying over time! 

I’m going to think more about what full disclosure actually means in the context of the evolving shift of purchasing, advertising, and content online.  In the offline world, the construct of a reseller is well established (e.g. no one ever requires full disclosure from a bookstore when they sell – or promote – a book as it is well understand that they make a margin on every sale.)  I get that there are different issues in the online world, especially around content, but as the creative destruction of the Internet starts to really take a toll on retail (and resellers), there may be new issues around the construct of full disclosure.

Finally, thanks to the blog reader who pointed this out to me.  I hope this doesn’t come across as a gigantic rationalization on my part, or a defensive argument.  Instead, my goal was to think through this out loud, in public, and in the spirit of full disclosure.  If anyone out there has anything to add, or core principles that can help me define a forward looking view on this (e.g. what this should look like from 2010 forward), please weigh in with a comment.

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