Amazon Can Do Without Affiliates
Legislators considering laws that seek to compel e-tailers to collect their state’s sale tax because they have local affiliates should probably start by asking themselves a question: Are those companies dependent on affiliate referrals or will they find a way to get by without them?
In states that have passed the so-called Amazon tax, the net result has been affiliates have been cut off while Jeff Bezos and company continue to do business. Other e-tailers, most notably Overstock.com, have done the same.
Even many who believe Amazon and others should collect state sales tax as a matter of fairness, have some issue with counting affiliates as part of another company’s local presence.
A RetailWire poll last month found that 56 percent disagreed strongly or somewhat with the contention that affiliates represented a local presence or nexus for Amazon and other e-tailers.
An article on The Motley Fool site yesterday concluded that legislation being passed to force Amazon and others to collect sales tax has proven to be a lose-lose for the states and affiliates.
"We’re at the point where Amazon may no longer need the Associates program, anyway. The success of its Prime loyalty membership plan is already keeping customers close," wrote the author Rick Munarriz. "There can’t be too many people out there who haven’t heard of Amazon.com, and if a website or blog is generating enough sales volume through referrals to Amazon’s product pages, there are alternatives."
- Does Amazon Need Its Affiliates? – The Motley Fool
- Amazon’s CEO Calls for Federal Action on Sales Taxes – RetailWire
Discussion Questions: How important are affiliate programs for most pure play e-tailers today? Does Amazon need its affiliates?