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I just want to take a moment to explain exactly what is going on here…as it really has nothing to do with wether anyone likes or doesn’t like affiliate marketing and that business model.  It’s all about sales tax.

As it stands now, national retailers like Amazon do not collect sales tax from customers where they don’t have a “presence”.  As you might imagine, Amazon works hard to NOT have a presence in most states as this gives them an advantage over brick and mortar stores that must charge the tax.  As you can also imagine, the states that are “losing” this sales tax are not very happy.  With the current fiscal situation, all the states are looking hard at ways in which they can get more revenue.  This “opportunity” is seen in many states as something they can go after.  But…how to do that?  Since their own laws state that the retailer must have a “presence” in the state to collect the tax.  THAT’s where affiliates come in.

The way that many states have decided to go after this money, is by saying that…if an affiliate from their state pushes the traffic to a retailer (like amazon), then that triggers the “presence” and that retailer must collect the sales tax.

Amazon (and other retailers from Commission Junction etc.) do not want to collect the sales tax for two reasons.  First is the overhead required to collect, document, and pay the sales tax.  This is an expense that they currently don’t incur.  Second, and perhaps more importantly, they feel it will hurt their conversions and take away their advantage over brick and mortar stores.  Their solution (in some states) ?  Kick all the affiliates from that state out!

So, how does this affect you now and in the future?

First of all, if you’re outside the US…this has ZERO impact on you.

Clickbank - (Commission Blueprint) Clickbank opportunities are unaffected now and for the foreseeable future.  Digital goods are generally not liable for sales tax, AND, the way that Clickbank sets up their business model makes any affiliate impact very unlikely.

eCommerce Sites - (Niche Blueprint) These sites are unaffected by this, as sales tax is already something that’s addressed.  The only potential issue here, is if you are using affiliates to drive traffic to your site.  You may be faced with the same decisions that Amazon has had to make.

Amazon and other (Commission Junction etc.) - These sales are what is at risk right now.  So, what can you do?  Simple.  Incorporate your business in Delaware and set up an “agent” there where you can have a Delaware address for your company.  In this way, no matter where you are, your company is driving the traffic … and they’re in Delaware.  Why Delaware?  That state makes a ton of money incorporating businesses.  They do so by being VERY business friendly on tax and MANY other issues.  Almost every big company in the US is incorporated there.  I would check here: Commission Junction Tax Update and see what’s going on with your state.  If you have a lot of business that could be at risk, and your state seems to be heading towards this kind of thing…then get yourself to Delaware!  :-)  I would be SHOCKED if Delaware EVER passed legislation like that anytime in the future.

Don’t PANIC!  Just adjust…

So…naturally, after listenting to me talk his ear off about Internet marketing for years…he wanted to give it a go.  I kind of tried to talk him out of it.  He really doesn’t strike me as the “marketing type”, he has zero marketing experience, he has no technical experience, and he seemed a bit skeptical of the whole thing really…so I wasn’t sure he’d really take it seriously.  I didn’t want to see him fail, and I didn’t want to be the Internet marketing teacher that couldn’t even coach his own Dad!

My fears were unfounded.  He threw himself into it!  Attacking Market Samurai with a vengance, exploring markets and niches; learning how to set up web sites, deciphering DNS, FTP, HTML, Web 2.0, etc.

He found a great niche, set up a site, did some SEO, and he’s #12 right now, and climbing the charts…oh…and he made a sale!

All this in about 3 weeks!

He absolutely made some mistakes along the way…nothing was perfect, the i’s weren’t dotted and the t’s weren’t crossed.  Really a major “ready, fire, … aim” kind of effort.  Sort of like…well..everyone’s first attempt (and for some, their latest!)

It just serves to prove the same thing I see over and over again.  The ones that manage to make a living in Internet marketing are not the ones who are masterminds of anything at all to do with the different aspects of how we do things…they are simply the ones that “show up”.

If you’re just getting started…here’s your New Year’s resolution.  It’s very simple.  Just do SOMETHING.  Don’t worry about getting it perfect, or even good.  Don’t worry about success or failure.  Don’t worry about wether it’s the right thing to do now or not.  Don’t worry about anything at all.  Just do something.

Get one site up, get one campaign up, anything at all.

If you do…you’ve just “showed up”, and you’re ahead of the vast maority of anyone who ever gives Internet marketing a try!

The general idea, is to find high volume keywords, that convert, and have low organic search engine ranking competition.  Here’s how I go about it.

1. I make a list of my high ctr, high converting, high traffic keywords by looking in adwords editor and slicing/dicing/sorting keywords and stats.  You could also just use the adwords web interface.
2. I go into the logs of the my site (google analytics, awestats, webalizer etc. ) and I get the top 100 or so kw phrases that drove traffic to the site.  This will get you the ones that you “don’t know about”.  The ones that were probably triggered by broad match kw’s.  For example…you may be bidding on “acne treatments”, and find that you’re getting lots of traffic from “acne natural treatments” (of course, this would also be good to put as a new kw phrase into adwords too!).  I add these to the list.
3. I fire up market samurai, and I filter down until I get to the top 3-5 kw phrases with high volume and low organic search competition.
4. I use these keywords as SEO targets!

Give it a try, and make sure you’re getting every penny’s worth of the big bucks you’re paying Google.