Ristvin Marketing Blog

Colorado HB 1193: A Lose – Lose Law

I reported back in February that Colorado HB 10-1193 was going to be worse than a “Google Slap” to Colorado online affiliate marketers.  I also pointed out that even though the law had not been voted on at the time, affiliate programs were already dropping me from their ranks…

I even posted one of the emails that I had received that day from the Drs. Foster and Smith Affiliate Program… Well, the law has now gone into affect as of the first of March…  First thing this morning, I received an email from Amazon’s Associates Program.  They fired me!   Here’s what the email stated:

 

 

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.

Best Regards,

The Amazon Associates Team

This bill was part of a package of tax measures

HB 10-1193 was part of a package of tax measures that were aimed at making up deficits in the state’s budget.  The bill originally tried to make affiliate marketers in Colorado part of a nexus that represented out of state companies physically within Colorado for sales tax purposes.

After write-in campaigns and demonstrations at the state capital, the bill was altered on the fears that retailers like Amazon.com would simply sever ties with the state’s affiliates and this would hurt the sales tax revenues by these retailers making less sales.

Well, as you can see by the above email from Amazon, they have elected to fire their affiliates within the state of Colorado… In other words, anyone living in Colorado and making revenue through the Amazon Associates program has been shut down… Just as they have done in other states that have enacted such laws…

You have to admire Amazon for taking a stance against Colorado for enacting a law that requires them to provide data on what individual Colorado residents spend each year in order that the state can collect sales tax on their online purchases…

But by taking this stance, Amazon has let go of the people that have been making money through them… especially hard hit are those marketers that centered their business model around Amazon…

Amazon has said that they are still willing to sell to Coloradoans and ship to our state, so it’s only the affiliate marketers that are being punished… only those that have been making a few extra dollars to prop up their own sagging budgets.

So Far, Only Companies Marketing Through Affiliate Networks Have Cut Me Off

One observation that I have made over this whole ordeal is that the affiliate programs that have suspended my accounts, other than Amazon, have been associated with affiliate networks like CJ, LinkShare and others.

Maybe this is because they think it will be easier for the Colorado State Dept. of Revenue to keep tabs on them and enforce the sales revenue reporting that they will be require to provide on each resident…

These companies, like Amazon, pay low commission and to make a living through them, you need to make massive sales of high dollar items to make a good affiliate commission.  I prefer companies that pay out higher commissions, so my revenue won’t be hurt that much… but every penny counts…

Hopefully, the state legislators will see that they are cutting their own throats on this tax thing… On the one side, they may not gain as much sales tax revenue as they were expecting… And, on the other side, they will have decreased income tax revenue that was supplied through the affiliate marketers that they have seen fit to punish…

Related Blogs and Sites

• Letter from Amazon Terminating Colorado Affiliates | Affiliate Marketing Blog by Shawn Collins
• Amazon Removes Colorado Affiliates and Why
• Amazon Closes Colorado Based Associates Accounts | Beginning SEO
• Amazon Fires It’s Colorado Associates
• ‘Twitterverse’ Reacts Sharply To News Of Amazon’s Firing Of Colo. Associates | State Bill Colorado
• Dear Colorado-based Amazon Associate: Your Government Sucks
• Amazon, Colorado and Affiliates
• Online entrepreneurs lose source of income thanks to Colorado legislature | Tony's Rants
• Amazon Terminates Thousands of Affiliates – Uses Them to Fight Colorado Sales Tax Legislation #noadtax – 5 Star Affiliate Blogs
• » Amazon – Won’t Be Bullied By Colorado – But Who Wins? – Blogger News Network

Tags: affiliate marketer, affiliate program, Amazon, Amazon Associates Affiliate Program, Colorado, Colorado HB 10-1193

It seems that every other internet Guru tells us that the fastest way to make money online is with ClickBank.   This is supposed to be one of the best ways to start out with affiliate marketing….

Is this really true?  Yes, it can be… but… there are some pitfalls in this road to profit.  If you’re wanting to make money online, more specifically make money with ClickBank, you should be aware that it isn’t as easy as finding a ClickBank product in your niche and promoting it.

In fact, I’ve been reading on some of the forums that I “lurk” on that many new marketers are finding it hard to sell ClickBank products in their niches as affiliate marketers…

The problem, in my opinion, that these marketers over think their potential marketing.  There is nothing magical about ClickBank. There are good products and bad products there, as well as good and bad vendors.  You have to be choosy.

Some of the stuff in the ClickBank marketplace will sell well, and some wouldn’t sell if you offered it as a free bonus for a bus ticket to guaranteed profits.

Just because the product is on CB and fits your niche, it doesn’t mean that you can put up a lousy webpage promoting a product as an affiliate and you are going to make lots of moolah…

At the very least, you have to attract interested, targeted people to your webpage… and do your best to make it less spammy and with better content than other affiliate’s pages.

You might also want to give some of that traffic an incentive to buy through your link rather than keep on shopping for a better deal… Bonuses that you provide might be the extra incentive that is needed…

This is called marketing… You go out and attract people to your offer – you create your own market for the product.  You might create traffic with paid advertising (pay per click is one example) or by free methods such as article marketing.

When you’ve got them to your webpage the next skill has to be brought to bear on them… pre-selling the product.  Your pre-sell page needs to sell the idea of buying the product.  Actually, as an affiliate, you’re trying to make them want to visit the product’s sales page where the real selling can take place.

That’s it… ClickBank affiliate marketing in a nutshell: create a market by advertising or free methods, capture the names and email addresses, if you can and pre-sell your targeted traffic on the idea of visiting the ClickBank product’s sales page to make the sale… And give a nice bonus to them if they buy from your link.

If that sounds simplistic, it is. But why make it any more complicated when simple works?  It’s a formula that works…

Here’s the truth, though… not all ClickBank products are equal… Here’s one of the big the problems with ClickBank… Some of the sales pages for the ClickBank products are not the best and they don’t convert the way you would like them to. 

They might be great products, but their sales page sucks, to say it mildly… Many of the sales pages in ClickBank are just plain “spammy”.  Once you’re done your job of pre-selling the product, the merchant’s sales page turns your visitors off from buying…

When I first started selling ClickBank products, I saw this time and time again… There are two ways that I have overcome this problem during the years that I have done ClickBank affiliate marketing. 

The first way that I discovered is in my pre-sell page I would tell the visitor that the sales page sucked but the product didn’t and to just go to the order button and get the product… simply ignore the sales page and buy…

This works, but not all the time…

The second method that works is to simply re-write the sales page… load the re-write to your own server and send the traffic to the order page directly through your own order link…

In other words, you do a better job of copywriting, making a better sales page.   The nice thing about this method is that you can do your own testing and tweaking of the sales page so that it converts the best…

If you want to make money with ClickBank as an affiliate, you need to carefully choose those products in your niche, read the sales page and evaluate it as would you buy this product, then, if the sales page doesn’t look like you would buy, re-write it and test and tweak your re-write till it has maximum conversions.

Next post I’ll get into how to re-write a sales page, how to test in, and how to link the order button to the ClickBank order page with your affiliate link so that you receive the commission… till then…

Related Blogs and Sites

• Can You Make Money With Affiliate Marketing | girlmusic
• Interview with Geno Prussakov, Outstanding Affiliate Marketing Expert | Search Engine Journal
• Affiliate Marketing Tips & Tricks » Blog Archive » Learn The Basics Of Affiliate Marketing
• Starting Affiliate Marketing – Steps To Follow | Earning Online Solutions
• Do’s and Don’t of Affiliate marketing | AutoPilotIncome101.com
• How Affiliate Marketing Can Be Used For Making Automated Income | Attraction Marketing Coach | Attraction Marketing Mentor | Traffic Generation Specialist
• The State of Affiliate Marketing in the Philippines | Snoob’s Affiliate Marketing Blog
• Affiliate Marketing Statistics – 10 | Best Affiliate Marketing
• Affiliate Marketing 101 | Anton Amoto
• Unrivaled Web Article Marketing Automation Tools — W3Devil

Tags: affiliate marketing, clickbank products, make money online, making money with clickbank

For the past few days, I have been searching for an affiliate product with resell rights that I can resell in the ‘business opportunity’ niche.

And no niche is hotter than the eBay niche right now because as the recession deepens, more and more people are looking to make money online (specifically eBay).

One product that I came across is Francis Ochoco’s video series titled, "Live eBay Training Videos".

If you’ve never heard of Francis Ochoco, he was awarded the first ever ‘eBay Entrepreneur Of The Year’ award a few years ago.

"Live eBay Training Videos" is a set of 28 videos that show Francis selling on eBay in real time.   He walks you through step-by-step to show you how to create an eBay account and then how to monetize it with affiliate products.

I am actually surprised that he is giving away these videos for free because it’s my opinion that this is the best eBay course I have seen in a long time.   Even better than John Reese’s original eBay course.

Not only he is giving away these videos for free, but he is also giving away Resell Rights for free.  This means that you can resell these videos yourself and keep 100% of the profits.

These videos are very detailed so it won’t surprise me if your 10 year old child starts selling on eBay immediately after watching these videos.   Your spouse might become your eBay competition is you let these videos get in his/her hands.

If you have ever purchased resell rights to ebay video tutorials in the past, I’m sure you’ll find there was nothing spectacular about them.  (This is because they were created by average joe’s who haven’t had any real success on eBay)

So I should point out that if you are looking for a hot product that you can resell in a hot niche, make sure that it was created by someone that is successful in that niche.

I guarantee that these videos were made by a man that definitely knows what he’s doing when it comes to selling on eBay.  That being said, I highly recommend Francis Ochoco’s "Live eBay Training Videos". 

Best of all, it is free. 

To see the titles for each of the 28 videos in "Live eBay Training Videos", go to eBay Training Videos .

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As an affiliate marketer, one of the worse things that can happen to you if you are doing any PPC is to have Google slap you and basically stagnate your online business or at worst, put you out of business… But if you’re an affiliate marketer in the State of Colorado, the recently passed Colorado House Bill 1193 is death to your affiliate marketing business…

HB 1193 in Colorado establishes an affiliate “nexus” that allows the state to tax “out–of-state affiliate networks”.   This bill allows the state of Colorado to tax out of state retailers that have affiliate programs with state online businesses like me. 

The state thinks that this will increase sales taxes that will fund their deficit and give money to schools and other programs that they find having decreasing funding because of lowered  money from taxes in this recession… a good thought…

But this law has some drawbacks… Number one is that it is putting affiliate marketers out of business… That means less income tax to the state amongst other revenue decreasing problems….

Here’s the problem with this law… first, it defies the Supreme Court’s ruling via Quill vs North Dakota requiring that a business must have a physical presence and nexus in the state in order to compel that business to collect and remit sales taxes.  This means that the state of Colorado is open to law suits that will cost them more in court costs than the sales taxes that they think they are going to collect….

Ahhaaa… the State of Colorado thinks that they have circumvented this problem by assuming that if affiliate marketers reside within the state they form a nexus which represents that company within the state boundaries…

Another problem is that the affiliate programs are pulling out… I have been receiving emails by the hour in the past couple of days from my affiliate programs dropping me with emails like….

“Subject:  Removal From Drs. Foster and Smith Program

---

Dear Drs. Foster and Smith Affiliate:

Here at Drs. Foster and Smith, we truly value the affiliate relationship with each and every publisher, as well as the dedication you have provided the program.  Unfortunately, at this time we regret to inform you that we have chosen to remove all Colorado affiliates due to business reasons connected to the pending bill HB 1193. Currently, this law is in effect in New York, Rhode Island, and North Carolina. The removal of all Colorado affiliates will be effective immediately as of February 3^rd, 2010.

Again, we appreciate and value your efforts to date and hope that we may again be able to resume the productive business relationships which we have enjoyed with you. We appreciate your understanding in the sudden decision of this matter and wish you the best.

Regards,

The Drs. Foster and Smith Affiliate Team”…

This means that instead of collecting and paying sales tax for the state of Colorado, affiliate programs are withdrawing from the state and Colorado will not gain the tax revenue that HB 1193 was supposed to provide.  Thus further decreasing their tax revenue….

It started with my Commission Junction programs then on to my Linkshare programs… haven’t heard from Amazon nor the Google Associates Programs (or others), but am sure I will….

Colorado HB 1193 has inadvertently punished Colorado’s online entrepreneurs.  This law has punished anyone having an affiliate link or banner on their website.  This includes work at home moms and schools trying to gain extra funding through selling products from an affiliate program.

I don’t think that our legislature has done their research… If they had, they would look to the states that have already enacted such laws… ALL have shown decreased tax revenue instead of an increase.   Why?  Because affiliate programs simply withdrew from those states…

No sales tax revenue comes in, plus, less income tax from those businesses associated with those programs… a lose, lose situation… No additional revenue…a net loss…

In Colorado, by putting small online advertisers, like me, out of business or cutting into our profits, Colorado HB 1193 will likely lower the amount of taxes that our businesses will pay by more than the amount that the state would have collected with this law…

Way to go Colorado!

Tags: affiliate marketing, affiliate program, Colorado HB 1193