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Hi, I’m Brad Feld, a managing director at the Foundry Group who lives in Boulder, Colorado. I invest in software and Internet companies around the US, run marathons and read a lot.

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I’m An Amazon Affiliate Again – Sort Of

Comments (18)

On March 8, 2010 Amazon fired me as an Amazon Affiliate because of Colorado HB 10-1193.  I proceeded to have a dozen different conversations (email and live) with several of my state representatives, including one of the co-sponsors of the bill, and each conversation made me more incensed at the abject stupidity and lack of understanding of the dynamics surrounding the situation.  Ultimately, the argument came down to one of protectionism – e.g. “we have to protect our local merchants so Amazon shouldn’t get an unfair advantage by not having to charge state tax.”  I could rant about this for a while, but I’ve got better things to spend my time on at this point.

I’ve been an early Viglink user for a while.  Niel Robertson, the CEO of Trada, introduced me to Viglink’s founder Oliver Roup and I agreed to be an alpha tester.  While we aren’t an investor, I’m intrigued with what Viglink is doing and I’m already a big fan.

Last week I realized that all of my going forward Amazon links (and other links to merchants with an affiliate program) were getting rewritten by Viglink.  As a result, on a going forward basis, I was getting Amazon affiliate revenue (via Viglink) for anyone that clicked through one of my links and bought something on Amazon. 

That was cool, but I have a gillion of old links using my Amazon affiliate code that no longer works.  I asked Oliver if he could rewrite all of the old links also.  Here’s his response:

“We have coded this and deployed it.  As a result, all your dead Amazon affiliate links will be overwritten with our affiliate code and the revenue will be credited to you.  What’s more, we just created an affiliate program against ourselves – any links you have to us on your blog will automatically be affiliated and you will receive 10% of the revenue from any customers we get as a result of those links.”

Awesome!  If you are a fired Amazon Affiliate in Colorado, take a look at Viglink.

  • http://intensedebate.com/people/terry_gold851 Terry Gold

    I did an email campain to the representatives (none of which even acknowledged my emails) and I pointed out that the problem with trying to tax software like this is that it would be so easy for companies to just move it out of state. I didn't realize at the time that affiliates would be attacked, or that it would be even easier than I imagined. My point was if they wanted to raise revenue, they should come up with a different plan, because this one wasn't going to work very well and it would hurt Colorad companies and employees in the process.

  • http://www.pindropsoup.com DaveM

    Two questions Brad.

    1) Why isn't Viglink subject to the same tax issue Amazon is?

    2) Please rant on this as I am personally confused.
    "“we have to protect our local merchants so Amazon shouldn’t get an unfair advantage by not having to charge state tax.” I could rant about this for a while, but I’ve got better things to spend my time on at this point."

    Everyone is upset about the Amazon bill, but to my understanding the issue is twofold. 1) Amazon has an unfair advantage over local merchants and 2) The state has a major revenue shortage partly associated with spending habits moving to online purchases. So I understand the logic and attempt of the tax bill, but as an affiliate and consummate online shopper I also understand the "for lease" signs around all the nearby shopping locales.

    So if the Amazon bill is no good, what is the recommended alternative? All I hear is gripes – no alternative suggestions. The tax shortfall is real and the incentive to not shop locally is real. CompUSA, CircuitCIty, even SamsClub have all shut down in Boulder county over the past year or so… I never went there anyway – Amazon got all that business. But I don't like those empty stores – it's beginning to look like Detroit around here.

    • http://intensedebate.com/people/bfeld Brad Feld

      1. While the whole discussion is pretty complicated, I think the short version is that Viglink is actually not selling anything.  They are merely another intermediary that is rewriting links on a page and subsequently acting as an “affiliate aggregator” (a phrase I just made up).  They aren’t in the ecommerce transaction flow in a way that would subject them to any reporting.

      2. The irony of this is the local merchants that our friendly government refers to are not the national big box retailers – they are the true local merchants “e.g. Joe’s Bookstore and Coffee Shop.”  Anyone selling a commodity product – either a local merchant or a big box retailer – needs to differentiate themselves.  Unfortunately, very few do, especially in the disruptive retail world of the Internet which was predicted in 1999 but is now finally happening a decade later.

  • http://www.GeekMBA360.com GeekMBA360

    Interesting. It seems that there have been a lot of sympathy to Amazon.com's practice of dropping affiliates. But, don't you think Amazon is also being unreasonable and harsh to drop many of the hard-working affiliates who have been effectively sales force amazon? I feel affiliates are being sacrificed in this battle, which is unfair to them.

    Also, if State of Nevada or Deleware institutes a law charge, I don't think Amazon will have the gut to drop associates in these two states. There are simply too many super affiliates (e.g. deals and coupons site, comparison shopping engine, etc.) registered in those states.

    One key takeaway for any web entrepreneur is not to rely on one or two sources of income heavily.

    • http://intensedebate.com/people/bfeld Brad Feld

      I think it’s ultimately Amazon’s call so I don’t view it as “unfair”.

  • http://www.ongobee.com Marc

    What is your recommendation for an affiliate marketing service that is able to split revenues, through links and advertisements, between the site owner and its content contributors? Would viglink still be a good candidate?

  • http://intensedebate.com/people/bfeld Brad Feld

    I’m having trouble understanding what you mean – are you the affiliate market service or are you asking if Viglink does this?

    • http://www.ongobee.com Marc

      I'm the owner of a user provided content web site. To reward our contributors we are in the process of setting up Google AdSense ads for every published article. Google provides an option to set up AdSense such that generated revenue is automatically split between the web site owner and its content contributors. Amazon has a similar program. So I'm wondering if the Amazon affiliate program can be used via VigLink with the option to split revenue between the web site owner and its contributors? Thank you. ps. We are in Colorado.

      • http://intensedebate.com/people/bfeld Brad Feld

        I connected you with Pete Sheinbaum at Mandelbrot – he knows this area well.

  • http://www.pass4sure.eu/Cisco/642-515.html 642-515

    I can't agree with more.

  • http://jimfmunro.com Jim F Munro

    Hi Brad, I just emailed Viglink about this and they said that originally they did this but Amazon has requested that they don't affiliate links to Amazon and they've since dropped support for Amazon.

    A bit disappointing as there doesn't appear any option other than starting a company in another state. ;)

    • http://FindARescuePuppy.com Steven

      Brad & Jim Munro…. has anyone been able to determine that incorporating a new entity in NV or DE, while still living/working from CO, can enable working as an Amazon affiliate. (obviously not asking for a legal opinion… maybe example(s) showing that this is or isn't a solution)

      Thanks

    • http://intensedebate.com/people/bfeld bfeld

      Yup – this is true. Amazon is being appropriately vigilant here.

  • http://twitter.com/bmlee5 Brian Lee, 이병무

    Thanks for the info. VigLink is what I’ve been looking for.

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