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Amazon.com cancels all North Carolina affiliate accounts

June 26, 2009 by John Dilbeck
Filed under: Affiliate Marketing, Amazon, Opinions 

Yep. You read that right. Amazon.com has terminated the account for all of their affiliates who live in North Carolina.

Previously, they said they would do this if the NC General Assembly passed the tax law that is under consideration.

Now, however, even though the law has not been passed, Amazon terminated all their NC affiliates on the anticipation that it may be passed.

That’s a huge difference!

Here’s the email I received from Amazon.com this morning:

We are writing from the Amazon Associates Program to notify you that your Associates account has been closed as of June 26, 2009. This is a direct result of the unconstitutional tax collection scheme expected to be passed any day now by the North Carolina state legislature (the General Assembly) and signed by the governor. As a result, we will no longer pay any referral fees for customers referred to Amazon.com or Endless.com after June 26. We were forced to take this unfortunate action in anticipation of actual enactment because of uncertainties surrounding the legislation’s effective date.

Please be assured that all qualifying referral fees earned prior to June 26, 2009 will be processed and paid in full in accordance with our regular referral fee schedule. Based on your account closure date of June 26, 2009, any final payments will be paid by September 1, 2009.

In the event that North Carolina repeals this tax collection scheme, we would certainly be happy to re-open our Associates program to North Carolina residents.

The North Carolina General Assembly’s website is http://www.ncleg.net/, and additional information may be obtained from the Performance Marketing Alliance at http://www.performancemarketingalliance.com/.

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

Best Regards,

The Amazon Associates Team

Now, I’m pissed off

Before, when I first heard that this might happen, I was mainly disappointed in the NC General Assembly for considering passing a tax law that redefined how companies were considered to have a presence in the state.

North Carolina is in the midst of a budgetary crisis, and they’re looking for ways to increase their revenue. This is understandable. Since last September, or so, we’ve all been scrambling to cut expenses and increase revenue until we can weather this economic crisis.

I don’t think most of the legislators have a clue about how this proposed tax law may affect many of us who have been earning our living from affiliate marketing, and I’m not sure how many of them care. After all, when you compare all the businesses in the state, affiliate marketing businesses are at the very small end of the small potatoes bin.

The fact that some of us have been earning all our income from affiliate marketing for years doesn’t seem all that important to them, from what I’ve been able to learn.

Let me say, once again, that I’m no expert when it comes to legislation and tax laws, but neither are our elected representatives – and they’re the ones who are making these laws.

But, I’m not pissed off at them.

No.

I’m pissed off at Amazon.com and their entire Amazon Associates Team.

This time, they went too far.

I know they have the right to terminate any affiliate they want, but to terminate all affiliates in an entire state with no changes to the laws is just wrong.

They didn’t do it in response to new tax laws that would affect their business; they did it in anticipation that the law may be passed.

That’s a huge difference, and I find it to be unconscionable.

Then they try to make nice with us:

In the event that North Carolina repeals this tax collection scheme, we would certainly be happy to re-open our Associates program to North Carolina residents.

Well, Amazon, in the first place, the law has not been passed, nor has it gone into effect.

In the second place, no thank you.

I have been an Amazon.com affiliate since shortly after it was first introduced. Before any of us knew what we were doing, I created my Hyperdimensional Book Nook on my first domain at need-sleep.com.

(I let that domain lapse many years ago and I am not associated in any way with the current version of that domain.)

On a whim, I searched the Way Back Machine and actually found a copy of the site from January, 1997 showing pages I last updated in the fall of 1996. That means that I’ve been marketing for Amazon.com for almost 13 years.

(If you’re interested, here’s a glimpse of my very first website and you can see the obvious influences of Star Trek and A Hitchhiker’s Guide to the Galaxy. Need-Sleep.com from January, 1997 and my HyperDimensional BookNook at the Edge of the Universe.)

It was mostly a learning exercise, but it was my first foray into affiliate marketing – and I earned a little money from it. Later, I built some real websites where I promoted a variety of products through Amazon.com.

Now, I have thousands of pages with links to Amazon.com and I have to find and remove them – as many as I can – when I’m very busy doing something more important to me.

Yes, I’ll remove them, and I’ll never put them back. I’m not sending any more visitors to Amazon.com, nor will I ever recommend them, again.

It’s over Amazon. No matter what happens in the future, don’t bother inviting me back to your party.

Act on your dream!

JD

PS. I should have mentioned that it will take weeks to find and delete all those links to Amazon, assuming I’m able to do so. In the meantime, there’s no telling how many visitors will go and purchase something and I won’t earn a penny from it.

This is another example of the affiliate taking all the risk and incurring all the expense of advertising and hoping we’ll earn something in the future.

Sometimes it works; sometimes it doesn’t.

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15 Comments on Amazon.com cancels all North Carolina affiliate accounts

  1. MiMi on Fri, 26th Jun 2009 10:46 am

    2. John: Such bad news. Kind of reinforces the old adage that it’s “me against the world.”

  2. John Dilbeck on Fri, 26th Jun 2009 11:10 am

    3. Good morning, MiMi.

    So far, it’s just one company that has canceled my affiliation, but I have no idea how many others may follow their lead.

    Sometimes it feels like it’s “me against the world,” but then I get nice messages from people like you. We’re not alone in doing our best to get by and prosper.

    Act on your dream!

    JD

  3. Bill Brown on Sat, 27th Jun 2009 12:01 am

    4. Hey John what happened was really sad!
    I agree that the cancellation step is not valid until the law in enforced, Amazon should understand the difference between the consideration and enforcement of law. i know u have a busy task ahead removing all the links of Amazon. But all i want to say is stay optimistic, if ever this law is not enforced and Amazon open its door again i think you should go…after all its been 13 years of work. But make a back up plan as well that if at all it happens again what will you do?
    Bill Brown ´s last blog ..Bird Eye View of Space Shuttle Launch – Skydive My ComLuv Profile

  4. gas card on Sat, 27th Jun 2009 3:46 am

    5. Wow, that is pretty messed up of Amazon to do this. I hope they did not keep some “select” affiliates, otherwise that would not be fair. It’s strange though… why would amazon just boot everyone, why can’t they keep their affiliates and work around the tax laws? I am sure they will hurt them in the long run, if they continue aggressive business models like this. In the end it only hurts their relations with the advertisers and publishers.

    -Randy

  5. pcmasters on Sat, 27th Jun 2009 5:45 am

    6. What a blast off.
    I couldnt believe it as you said it. I hope you get your account back.

  6. Joan Adams on Sat, 27th Jun 2009 11:36 am

    7. John, does this affect your Squidoo affiliate links or just your own Amazon account?

    It’s a really scary thing. I have spent the last 3 years seriously studying and learning and practicing internet marketing. Makes me tired to think of all the hours I have spent and you, too, I am sure. I am also sure there is a solution. So that’s the next step. What now?
    Joan Adams´s last blog ..Golf in Scotland updated Sun May 31 2009 2:13 pm CDT My ComLuv Profile

  7. Deneil Merritt on Sat, 27th Jun 2009 6:44 pm

    8. Oh that has to suck. I hope its not a big part of your income.
    Deneil Merritt´s last blog ..Show Your Peronsality In Your Blog My ComLuv Profile

  8. Brian D. Hawkins on Sat, 27th Jun 2009 10:45 pm

    9. I feel your pain John. Back in March Amazon canceled my account because one of my ad tracking customers violated their TOS. My affiliate link is no where on that site and has nothing do with the customer’s link or amazon. It would be like them canceling Steve Jobs’ account because someone used an Apple computer to violate Amazon.com terms. There is no rationalizing with a company that arrogant. Now get rid of an entire state’s worth of associates! It’s disgraceful.
    Brian D. Hawkins´s last blog ..My New Samsung Instinct My ComLuv Profile

  9. John Dilbeck on Sun, 28th Jun 2009 11:48 am

    10. Good morning, Bill.

    Welcome to our discussions.

    Yes, removing all those links will take a long time, but I’m going to do the best I can to get rid of all of them.

    I always try to stay optimistic. Sometimes it’s harder than other times. ;)

    No, I’ve had it with Amazon.com. I don’t care what they offer me in the future. I will never again recommend their associates program or sign up for it again.

    I still haven’t decided if I’ll never buy from them, again, or not. At this moment, I’m leaning in the direction of never again having anything to do with them.

    I appreciate your comments, Bill.

    Act on your dream!

    JD

  10. John Dilbeck on Sun, 28th Jun 2009 11:57 am

    11. Good morning, Randy.

    Welcome to our discussions. I appreciate your comments.

    Truthfully, I don’t know all the details of the proposed tax law, but I think the main issue with regards to Amazon.com is that they’ll have to collect NC state sales tax for all sales to residents of NC, if they have a nexus in the state.

    In the past, I think, a nexus was defined as a physical presence in the state, but, from what I understand at this point, the new law – if it is passed – will require Amazon.com to collect sales tax in NC if they have any affiliates in the state.

    As far as I know, this applies also to other companies with NC affiliates.

    What makes me so mad at Amazon.com is that they “jumped the gun” and canceled our accounts even though the law has not been adopted. From my point of view, that’s just wrong.

    No, I don’t think this is going to hurt Amazon.com at all. I used to earn more as an associate than I’ve been earning from them over the last couple of years. In the past, links to Amazon were more effective than they are now. These days, everyone knows to go directly to Amazon.com and they really don’t need their affiliates like they did when nobody knew who they were.

    We helped them build their brand and now they don’t need us, so it’s easy to cast us aside.

    Act on your dream!

    JD

  11. John Dilbeck on Sun, 28th Jun 2009 12:01 pm

    12. Good afternoon, Pcmasters.

    I’m with you. I couldn’t believe it as I read their letter.

    I don’t want my account back, now. I’m done with Amazon.com.

    Thanks for your comments.

    Act on your dream!

    JD

  12. John Dilbeck on Sun, 28th Jun 2009 12:22 pm

    13. Good afternoon, Joan.

    It’s always good to hear from you.

    Regarding Squidoo and Amazon.com affiliate links…

    This is not a simple question.

    If I have Squidoo lenses with my own affiliate links to Amazon products, then I am affected by this change. Those links will no longer produce any income and I’ll be removing them as soon as I can.

    However, if we’re using the Amazon modules on a Squidoo lens, then it may not affect my income.

    In that case, Squidoo is the affiliate and they aren’t located in North Carolina. So, in effect, the money earned from those modules is paid to Squidoo and they share a part of that income through their monthly payment to us.

    This is lumped in with other income we may receive from Squidoo, such as a share in Adsense earnings or sales via other affiliate programs that are paid to Squidoo and then shared with us.

    So, I shouldn’t see much difference in what I earn from Squidoo – which has never been all that much, anyway.

    Yes, it’s a scary thing.

    Those of us who are serious about affiliate marketing spend a lot of time and money building our sites and marketing those merchants’ products, with only the hope that we’ll make enough sales to earn a profit from it.

    Affiliate marketing is an easy business to get into, but requires – as you said – a lot of time learning and practicing online marketing to earn a consistent income. It’s not nearly as easy as some people make it out to be.

    I’m not sure there is a solution, at least in so far as I understand your statement.

    I earn far more from other affiliate programs than I ever have from Amazon.com. Losing my account with Amazon will not take food off the table.

    However, if I lose my affiliate account with several other companies, then it will become a very serious situation for me and people like me who live in NC – and in other states where their legislature is considering similar legislation.

    Fortunately, I’ve spent the last six months, or so, putting together a new marketing system to help me promote local brick-and-mortar businesses in Murphy, NC and the main new site should go live this week.

    That system will also make use of several of my blogs, a couple of static websites, and new Squidoo lenses I’ll be creating.

    It’s a completely different business model. Even though it’s still based on marketing and advertising, in this new situation I get paid up-front and do the work over an entire calendar year.

    In the affiliate marketing business model, we have to do the work and then hope that it will pay off for us, in the long run.

    In some ways, I’m now going to be monetizing what I’ve been doing for free for local businesses in Murphy, NC for the last several years. I won’t be charging any of them a lot of money, but, collectively, it adds up.

    So, what you’re doing for businesses in Pendleton, SC has a monetization potential that you may want to consider, too.

    If it turns out that affiliate marketing is no longer a viable business model for me, either because of the evolving business market or because of changes in NC laws, then I’ll turn more of my attention to local business promotion.

    If that doesn’t work, then I’ll try something else.

    Small business owners and entrepreneurs are always having to refine their business model and make changes related to customer interests, changing business climate, new laws, and our own interests. It never stops.

    On the other hand, that’s one of the things I like about being my own boss.

    Act on your dream!

    JD

  13. John Dilbeck on Sun, 28th Jun 2009 12:28 pm

    14. Good afternoon, Deneil.

    Yes. I agree with what you said. ;)

    No, it’s not a big part of my income, although it used to be, and I had hopes that it would grow, again. Now, I don’t have to worry about it.

    Act on your dream!

    JD

  14. John Dilbeck on Sun, 28th Jun 2009 12:35 pm

    15. Good afternoon, Brian.

    I feel your pain, too, Brian. It’s hard to imagine that they’d cancel your affiliate account because of something like you describe.

    You know, I never used to consider Amazon to be arrogant, but I may be changing my mind.

    This is not the first time that Amazon had canceled an entire state’s worth of affiliates. This happened several months ago for all affiliates living in New York state, when their legislature passed a similar law.

    I’m under the impression that more states are considering this new tax law model, so affiliates living in other states may be facing this issue in the coming months.

    At least, that’s the way I understand it, now. As I’ve said, I’m no expert on this matter.

    Thanks for your comments, Brian.

    Act on your dream!

    JD

  15. John Dilbeck on Sun, 28th Jun 2009 12:59 pm

    16. I just read an interesting article on the Wall Street Journal online site:

    Tarheels vs. the Internet

    Here’s one paragraph from that article…

    The U.S Supreme Court’s 1992 Quill decision forbids states from forcing tax-collection obligations on out-of-state merchants, but Tarheel legislators still want Amazon and other online retailers to start taxing their constituents. The Seattle-based retailer has no physical presence in the state, but a pending North Carolina bill holds that since affiliate Web sites in the state link customers to Amazon, the company is now responsible for extracting cash from Carolina shoppers. Other proposed North Carolina legislation would apply a new tax only to Internet ticket resales, in direct defiance of the federal Internet Tax Freedom Act, which prohibits taxes that target the Internet with burdens not applied offline.

    This brings up a new, and interesting, question.

    Just because I live in North Carolina, can the legislature or Amazon.com assume that my websites are located in North Carolina.

    They aren’t.

    As far as I know, I have no websites that are located on a server that is physically present in North Carolina.

    Most of my blogs and several static websites are hosted on a server in Texas.

    I think my Squidoo lenses are hosted on servers located in New York, but don’t know for sure. That’s where Squidoo’s offices are located.

    My Act On Your Dream! site is hosted on servers in Quebec, Canada, as will be my new site powered by Site Build It! that goes live this week.

    After looking through a list of all my domains, I don’t see one that I know positively is located in North Carolina.

    It doesn’t change anything, but it does bring an interesting thought about the hypocrisy of the NC legislature’s attempt to grab sales taxes wherever they can.

    In my opinion, for whatever it’s worth, the NC legislature is attempting to do something that was already declared unconstitutional by the US Supreme Court.

    Desperation helps people do things that are very wrong. The NC General Assembly needs to find other ways to balance their budget.

    Still, no matter what is decided by the legislature or the courts, I’m done with Amazon.com.

    Sigh.

    Act on your dream!

    JD

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