Shawn Collins' Blog

Affiliate marketing and other stuff from Shawn Collins, co-founder of Affiliate Summit.

Archives for May 2008

Overstock Sues New York Over Affiliate Tax

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I just saw on a Tweet from Linda Buquet that Overstock has filed a lawsuit to fight the New York affiliate tax.

Tweet from Linda Buquet

Overstock.com, Inc. (Nasdaq: OSTK) announced today that it has filed a lawsuit challenging New York’s new tax law that requires internet retailers to collect and pay to the New York state tax on their New York sales despite the fact that the retailer has no physical presence or nexus in New York.

The controversial new law attempts to redefine the relationship that internet retailers have with their New York-based advertising affiliates by requiring that when those affiliates solicit customers, the internet retailers collect and pay sales and use tax from all their New York customers.

Overstock.com, which is based only in Utah, has no operations in New York, and sells exclusively through the internet, views the new law

It’s great to see another online retail powerhouse fighting the state of New York over the affiliate tax.

Earlier this week, Overstock chairman and CEO Patrick Byrne shared his perspective in my blog comments on this issue.

Go Patrick… go Overstock… fight the good fight!

Linda has some more information on her 5 Star Affiliate Programs Blog.

Read the Overstock press release for more details.

Zac Johnson on Niche Affiliate Sites

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[audio:http://feeds.feedburner.com/~r/AndrewWeeBloggingAffiliateMarketingSocialTrafficGenerationInternetMarketing/~5/296474022/WhoIsAndrewWee.com-Zac-Johnson.mp3]

Andrew Wee of WhoIsAndrewWee.com recently had super affiliate Zac Johnson on his podcast to talk about Zac’s success with niche affiliate sites.

Andrew chatted with Zac on how he got his start in Internet marketing; how he developed a niche site into a big success; and how he researches and develops new niche sites.

Zac also provides tips for new affiliates developing their sites. This is a great resource for affiliates getting started – definitely take the time to listen.

You can stream or download the podcast at http://www.whoisandrewwee.com/podcasts/friday-podcast-niche-site-development-with-zac-johnson/.

Zac also provides tips to affiliate bloggers in the first issue of FeedFront Magazine, available to download at http://feedfront.com/feedfront-issue1.pdf.

Internet Retailer on the NY Affiliate Tax

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Internet Retailer magazine has posted coverage on the upcoming “affiliate tax” in New York state. The new law kicks in June 1, 2008.

Amazon.com Inc. and Overstock.com Inc. each gave a strong message last month to New York State: You may need more tax revenue, but we won’t let you cut into our profit margins without a fight.

In the long-simmering battle between states and Internet merchants over the collection of sales tax, New York upped the ante in April when it amended its sales tax law to cover sales by out-of-state online retailers who get customers through New York-based affiliate web sites. The law targets retailers like Amazon and Overstock, which, because they maintain no physical presence in the state, have been exempt until now from sales tax responsibilities.

I’m glad to see more of the media picking up on this issue. Spread the word and speak out on forums, blogs, etc. about the affiliate tax and let your affiliate managers know what you think about it.

Read the complete article at http://www.internetretailer.com/article.asp?id=26575.

Flip Video vs. Vado Pocket Video Cam

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I’ve been using the Flip Video Ultra Series Camcorder since it came out last September, and while there are lots of things I like about it, there are downsides, such as the size and weight, as well as the need to frequently replace the AA batteries.

affiliate-videoSo I was excited to try out the Creative Labs Vado Pocket Video Camcorder, which came out a couple weeks ago.

I priced the two cameras, as of May 28, 2008 on Amazon, and the Vado goes for about $90 and the Flip Ultra is about $120.

I prefer the size and weight of the Vado over the Flip Ultra.

The Vado comes in at 84g (with battery) and a size (H x W x D) of 3.9″ x 2.2″ x 0.6″. The Flip Ultra weighs 145g (I think that is without the batteries), and the dimensions (H x W x D) are 4.17″ x 2.16″ x 1.25″.

Both video cameras share some features, such as a tripod mount, built-in mic, USB connection, MPEG-4 AVI video format at 30 frames per second, and 2x digital zoom.

The Vado is better for low-light performance at 3.8V/lux-sec (extremely high sensitivity), compared to >2.0V/lux-sec (very high sensitivity) for the Flip Ultra.

As far as recording capacity, the Flip Ultra can fit up to 60 minutes, and the Vado can record up to 120 minutes (good quality) or 60 minutes (excellent quality). The excellent quality setting on the Vado looks similar to the Flip Ultra quality.

The Vado has a rechargeable battery (included) and the Flip Ultra uses two AA batteries. That’s a big one for me, since I burn through batteries frequently with my Flip Ultra.

Also, the Vado has a 2″ diagonal screen, compared with 1.5″ for the Flip Ultra.

I preferred the software for the Vado over the Flip Ultra.

The Vado software was simple and basic – minimal functionality to copy files from the video camera to your computer, while the Flip Ultra has editing functions (which I don’t use – I prefer editing video with Sony Vegas) and a clunkier user interface.

So overall, I preferred the Vado and at a price that is 25% less than the Flip Ultra, I think it’s the way to go.

But wait – one big deficiency for the Vado. I wasn’t happy about the audio.

When I recorded video with the Vado and Flip Ultra simultaneously from the same distance (approximately 2 1/2 feet), the Vado audio was way lower than the Flip Ultra.

This is something that can be boosted during editing, but I typically don’t have to enhance the audio on the Flip Ultra.

Affiliate Marketing Cribs 2.0

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Last year, I filmed a video of my home office called Affiliate Marketing Cribs. I’ve changed a bunch of things around since then, so I figured it was time for an update: Affiliate Marketing Cribs 2.0.

It was good timing, because I heard from super affiliate Zac Johnson last week that he was putting together a blog post with videos of affiliates and bloggers.

My video includes some footage that could be outlawed in some states – one of my film crew (my 4, 6 and 9 year old daughters) captured a private moment that maybe shouldn’t be in the public domain.

Check out Zac’s post: http://zacjohnson.com/affiliate-bloggers-work-space/.

Third-Party Ads on Google AdSense

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Google AdSense has announced that they now accept display ads from third-party vendors.

“Third-party ad serving will introduce a greater variety of advertising into the Google content network, increase the inventory of quality display ads competing to show on AdSense publisher sites, and offer more engaging ads for end users.

In the long run, we believe the increased inventory and ad competition will result in increased revenue for many AdSense publishers.”

In order to allow third-party ads on your site, you’ll need to do the following in your AdSense account:

  • Opt into image ads
  • Enable advertisers to target your AdSense channels
  • Opt into placement targeting

More details at http://adsense.blogspot.com/2008/05/introducing-third-party-ads-on-google.html.

Dozens of Affiliate Programs Pull Out of New York

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The upcoming affiliate tax in New York, starting on June 1, 2008, is leaving lots of carnage in its wake.

Dozens of affiliate programs have kicked out their New York affiliates in the past couple of weeks, according to a thread on the ABestWeb forum.

Merchants that have removed their New York affiliates include American Blinds & Wallpaper, One Step Ahead, Overstock, REI, and Ritz Interactive.

While this is lousy for the affiliates affected, it provides a good recruiting opportunity for competing affiliate programs to entice the spurned affiliates.

Keep an eye on the List of Merchants Who Have Dropped NY Affiliates thread for the latest updates.

Safe Affiliate Programs for New York Affiliates

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Kevin Webster of the 72 Kilowatts blog started a post on ABestWeb, “Merchants who ALREADY collect New York Sales Tax.”

“In an effort to clearly identify who NY based affiliates can feel safe in working with during this rocky time, I’d like to open this thread to be posted in by merchants who ALREADY collect New York sales tax on purchases, OR those whose physical goods do not, for whatever reason, fall into a taxable category.”

I’d encourage any affiliate programs that already collect sales tax in New York to post here – it could be a good resource for New York affiliates on which affiliate programs are stable for them.

For more discussions on the New York affiliate tax, ABestWeb has an area dedicated to legal issues for New York affiliate marketers.

Also, there is a running list on ABW of merchants who have dropped New York affiliates.

New York Affiliate Tax Recap

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I just wanted to provide a quick recap for the ongoing saga in the state of New York regarding the affiliate tax, which kicks in June 1, 2008.

Back in November 2007, then Governor Spitzer tried instituting the plan to tax all online transactions for companies that had no physical presence in New York.

The premise was that if a company has affiliates in the state that these affiliates constitute a physical presence for the company.

At the time, there was a public outcry, and he quickly backed off the plan, which was intended to kick in for Christmas 2007 sales online.

The bad idea came back around in February 2008 when Eliot Spitzer championed it, again.

Around that time, Governor Spitzer became embroiled in scandal and I had hoped the affiliate tax was going to get derailed as he was forced from office.

But the new governor, David Paterson, was just as gung-ho as Spitzer to push this tax scheme on the people of New York in March 2008.

Come April 2008, Stephen Dubner reported in the New York Times that the New York State budget has this new affiliate tax worked into it with an expectation that New York would get $50 million out of the tax.

And then, at the start of May 2008, Amazon filed a complaint in State Supreme Court in Manhattan objecting to the new law.

This brings us up to this past week when I reported on May 14 that Overstock sent notices to their affiliates in New York that they would no longer be in the affiliate program as of May 20.

Since then, affiliate marketing forums and blogs have been active with outrage on the issue. Some folks got the ball rolling to form an industry trade association to try and combat this and future attacks on affiliate marketing.

The affiliate networks have also gotten involved with ShareASale providing data on New York affiliates to their merchants, Commission Junction educating their affiliates and merchants on the issue, and LinkShare working with the DMA to host a call today to clarify the law.

Also this week, Jim Kukral, Lisa Picarille, Sam Harrelson, and I discussed the situation in detail on GeekCast.

I’ll be covering the future developments of the New York affiliate tax here.