Internet Tax Would Kill Businesses

John Seiler:

I’ve been writing about the suicidal idea for California to tax Internet sales. In a comment to that post, a small business operator wrote how it would kill his business, and others like it. I thought it worth reprinting here on the blog. This shows what’s really going on in California.

Contrast its realism with the fantasies dreamed up in the union-dominated Legislature or the hothouses of such think tanks as the California Budget Project, whose lobbying for such a tax I reported on here.

Here’s what the small businessman wrote:

I can speak from personal experience on this issue, because I’m one of those small fry affiliates desperately trying to scratch out a living from Amazon’s affiliate program (and others). I was laid off in 2009, haven’t been able to find a new job since, and have no realistic expectation that I will find a new one any time soon, given California has the 2nd highest unemployment rate in the nation. I’ve been working every day, often 15 hour days, creating blog pages to try to get to the point where I can at least cover my monthly expenses. At this point, affiliate marketing is my only realistic hope of keeping off the welfare rolls and out of food banks. If any of these bills go into law, Amazon, Overstock, and other affiliate programs will dump me, and then I don’t know what I will do. The rich affiliates will move out of state, taking their jobs, personal income, etc. with them, I don’t have that option.

I can tell you from personal experience, switching over to new vendors would require re-doing the months worth of work I’ve already done. I would get ZERO future income from hundreds or even thousands of hours worth of work I’ve already done, and switching everything over would prevent me from doing hundreds of hours worth of work that I could do as I end up having to spend that time re-doing work I’ve already done. Anyone who thinks you can just flick a switch and change everything over doesn’t understand how affiliate marketing works.

As for Barnes & Nobles offer to pick up some of the dumped affiliates, note the word “some”. The beauty of Amazon’s affiliate program is that anyone, anyone, with a website, no matter what their traffic, no matter if they have no prior affiliate experience, no matter how small their website, can join the Amazon Associates Program and start in affiliate marketing. You don’t have to have a fully completed website, you don’t have to have a minimum traffic level, you aren’t scrutinized by some affiliate manager, you can just join and start working. It doesn’t matter how small you are, how poorly you perform in the beginning, you can still join, participate, and work towards bigger and more profitable times. That’s a large part of WHY amazon became as big as they did, their open door policy towards all affiliate marketers.

Not so with Barnes & Noble. I’m sure they’ll be glad to scoop up the top performers, well, the ones who don’t relocate out of state, that is, but they won’t be interested in the small fry. I applied to their affiliate program and was rejected, and I’m sure I’d be rejected today too. They’re far less attractive than Amazon in any event, Amazon has a better site, better prices, better range of products (its not just books, folks) and I’m sure better conversion rates. There’s a reason why Amazon is the biggest online retailer.

If these bills pass in California, I’ll essentially be killed as an affiliate marketer, unless I can get an out of state friend let me come and live on their couch. California still won’t get any sales tax from Amazon, Overstock, etc., the rich affiliates will take their jobs and their income out of the state, and I’ll either be forced into going onto welfare and begging my way out of the state so I don’t lose thousands of hours invested into my affiliate sites. That’s the reality.

May 9, 2011