Tuesday, August 9, 2011

Video - Geographic Affiliate Blocking

I get asked by a lot of people can you make money blogging or by using video on the Internet. My answer is always a qualified "yes."

Yes, if you do the foot work of knowing what you want to do.

Yes, if you understanding the process of setting up a business and knowing that it is not going to happen overnight or with a super secret sauce that you purchased from another web site for $149.

No, to those that want to take short cuts that harm other people, computers or involve any form of ethical lapse or straight up criminality.

There are legal and legitimate ways to earn money. One of those ways is to connect with upstanding affiliate companies. If you have sufficient traffic on your web site that allows your visitors to click though to purchase products and services.

This was working fine for a lot of people. Some folks made chump change and others people made a grip and a half of real money on an hourly basis.

State governments have been trying their best to lay hands on the billions of dollars that are flowing in and out of the state.

One of the ways a state can tax an on-line business is if there is a physical presence in the state. This is the "nexus" that is referred to in the video. The state of California wants to imply that affiliate participants constitute that presence.

Recently California tried to get Amazon.com to fork up tax money because of the affiliates are located in the state. The premise was that the affiliates (bloggers, publishers, web sites owners) constituted a presence by Amazon in the state. For the record, affiliates are not owners or employees of Amazon or any company that they have an agreement.

Amazon.com said,"Heck no" and immediately cancelled all dealings with people in the affiliate program in California.

The above video by a representative of Retail Me No explains that other companies are building software programs to geographically block folks in those states that would want to participate in an affiliate program.

I can see both side of this issues. State governments have no money. There are many reasons for the budget blues. Some are valid. Other reasons are due to willfully not constructing a sane state budget or out and out theft/allocation of funds.

Either way, it seems to state governments like a good idea to tap into one of the few places that are prospering - the Internet.

The on-line retailers have ever right to fight back. There are 52 states and the District of Columbia. You do not want to have to negotiate tax agreements with each state and then possibly face the added danger of individual cities belling up to the bar as well.

They did not cause the fiscal problems. They shouldn't be asked to solve it.

So. This is where we are:
  • California will get zilch from Amazon.com. Other vendors are putting up blockades.
  • Other companies will build blocks to keep California citizens from being a part of affiliate programs.
  • For entrepreneurs and small businesses this will reduce opportunities not only to earn additional money but also stop a chunk of money being directed to the state budget.
Why am I writing this on a video education blog? Because if you were planing on taping into an affiliate program to supplement your income and you live in a targeted state soon to be blocked I'd think again.

Disclosure Notice:

Part of the reason I have a non-commercial, no income generating blog is that I am free to express opinions and points of view.

The following is my own point of view and has nothing to do with BlogHer. I should mention that I am contributing editor at BlogHer and I did attend the conference in San Diego.

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