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Making Money After Affiliate Nexus Laws Pass

In my mind it is a turbulent time to be in the affiliate marketing niche. Several states (including CA, IL, NY, AR, NC, and RI) have passed affiliate nexus laws. If you are not familiar with this legislation it is basically a law that seeks to force online retailers (like Amazon) to collect sales taxes. Constitutionally sales tax does not have to be collected from customers who live outside of any state where that retailer has a physical presence… think warehouses, shipping centers, and corporate offices. These laws seek to force them to collect the taxes by saying that using affiliates as independent sales people creates “presence” or nexus in the states where their affiliates reside.

For all the reasons why this is horrendous news for affiliates read Sales Tax Laws May Kill Affiliate Marketing. Even worse news is that recently an Illinois Senator took this shakedown attempt national. To put it simply though imagine that you are a big corporation and a state law passes in California that states your business relationship with John Doe in that state now requires you to collect sales taxes for all California customers. Jumping through those hoops will cost you money and lots of extra work so it is not hard to figure out the easiest course of action… simply fire John Doe and avoid all that extra money and paperwork. That is exactly what large retailers are doing. They won’t be strong armed by state governments, they simply fire their affiliates and devastate thousands of small businesses that reside there.

So, the million dollar question is.. what do you if your state passes an affiliate nexus law and you got your walking papers from Amazon and other large retailers? Here are some ideas:

Move to Another Location – This is the most obvious one and if you make a substantial income with affiliate marketing it may well be worth it. Of course this law may follow you to the new state as well, so keep that in mind. You may choose to live in a state where your largest affiliate company has a physical presence but you may lose your relationship with others. Another option would be to move out of the country. Just make sure the income tax there isn’t greater than what you pay here or it may not be worth it. There is also the possibility of incorporating in another state but you should talk to a tax professional about the legalities of it.

Find Affiliate Programs in Your State – Any retailers based in your state must collect sales tax already so they are unlikely to fire affiliates from their own state. It wouldn’t make sense to do so. This may not be as profitable as before but you may be able to get creative and salvage some income. You can always try niche sites that center around what is available in your state.

Sell Digital Products – This option may not be available for long since many states are looking to tax digital products as well but for the time being you may have luck promoting ebooks and info products as an affiliate.

Sell Your Own Products – You can also make and sell your own digital products. Think eBooks, eCourses, teleseminars, audio recordings, plr articles, etc. And of course you can sell physical products by opening a retail shop online.

Sell Ad Space – Many bloggers and site owners already do this to some extent but it can be a great source of revenue if you have a high traffic site. You can sell the ads yourself directly or you can use an ad network. You can do both even. Offer banner ad spots as well as text link ads and you may just come up with a steady new income stream. Forming a products and/or services directory on your site is another option. Small businesses would then pay a small yearly amount to be displayed on your site.

Sponsored Posts/Paid Reviews – When companies contact you with press releases or product pitches send them a form email informing them of your compensation rates for helping them to promote their products or services. Many will simply ignore you and move on to find other bloggers who will do this for free but some may take you up on your offer, thus providing new sources of income.

Membership Sites – If you have managed to establish a nicely trafficked site or a sizeable online community it may be time to create an inner circle. This can be done via a private forum or a password protected area on your blog where you share specialized content with paying subscribers. It can also be a place where you offer coaching and personal assistance with those interested in your niche. If you run a recipe blog for instance this can be a place where you offer exclusive recipes, step by step instructions, videos of you cooking and sharing tips, menu planners, shopping lists, and other value added features. Your particular niche will determine if this is feasible but many bloggers and site owners have had great success with offering their best content to paid subscribers.

Squidoo and HubPages – Both of these sites allow you to create your own content and be paid a percentage of commissions from ad clicks and affiliate sales. You basically split the profits from your pages 50/50. While it may seem foolish to create profitable pages on someone else’s virtual real estate this is a great option to have if you cannot collect these commissions in your own state. Product reviews and write-ups do especially well on sites like these and they can be very profitable. And another tip… you can make your own online purchases through your Squidoo or Hubpages affiliate modules and get money back via commissions.

Market Locally – In addition to finding local affiliate programs you can also reach out to local businesses and/or start a blog or web site about your city or township. This will give local businesses more incentive to seek you out for paid ads, sponsored posts, and product/event reviews. Some opportunities that come your way might not be paid, they may just offer you something of monetary value in return for a review or endorsement but when the opportunities are local it may help your bottom line regardless, in services or products that you didn’t have to pay for. Mom blogs especially, that are location specific, can be a great way to leverage free services and entertainment for your family.

Group Deal Sites – This is another option that will not result in cash payments but it can result in shopping credits. Group Deal sites (think Groupon) are popping up all over and there is usually incentive to share these deals with friends via email, blog, Facebook, and Twitter. When someone you referred buys the daily deal you get credit that can be used on future purchases.

If you want an affiliate based business to survive and thrive you may need to get creative find new income streams. Do you have any ideas or tips to share?

Want to Make Amazon Affiliate Sales?

I have made no secret of the fact that Amazon accounts for a pretty significant chunk of my earnings as an affiliate marketer. I have had one blog post generate over $2000.00 in a single month when that post went viral. During the ‘Back to School’ season I can easily rake in an extra $1000 or more from one or two posts on my blogs about school supplies. I have the same success during Christmas as well, in regards to green Christmas gifts. Even during non-seasonal times I make a very nice amount each and every month from Amazon… enough usually for my rent and all my utilities.

I never had a guide to help me make Amazon sales, I just learned via trial and error. The first two quarters I was promoting Amazon products I earned whopping 7 dollars and some change. I also used the same tracking IDs on all my sites so when I did start making sales… I had no idea where they were coming from. But nowadays, newbies to Amazon don’t have to take a shot in the dark. They can get step by step instructions for Amazon success.

One of my two favorite guides is Info Product Killer. In my review I mention two ways I implemented the ideas found in this book and I shared the results with exact dollar amounts. I followed up the next year with this post. The pages, sites, and Squidoo lenses I made using IPK strategies are STILL making money so that is a great testimony for how well it works.

My second fave Amazon sales resource is new but oh so very valuable. It is called Amazonian Profit Plan and it was created by two Aussie affiliate marketing women who started a small network of niche affiliate sites together and they are now making over $10,000 a month from Amazon. The book outlines how to craft Amazon product reviews that will sell and then how to drive traffic to those pages. The key to their success seems to be the criteria they use to select the products, the way they craft the reviews to make them valuable to the reader, and the formula they use to drive traffic to those reviews. I realize my Amazon success has been very much a fly by night operation so it fascinates me when people create success with methodical, calculated formulas.

This book teaches you:

  • How to choose the right Amazon products
  • How to determine what keywords and keyword phrases you should target
  • How to spy on your current competition and beat them on the SERPs (search engine results page)
  • How to drive traffic to your reviews and get inbound links

Once you use the formula and start seeing traffic and sales you rinse and repeat with new products (the book suggests only 5 at a time). I REALLY like this formula because it is actionable and broken down into easy to follow steps. I have no doubt that anyone who took this much time to create such an action plan DID in fact see amazing results.

Both IPK and Amazonian Profit Plan are wonderful products and methods. I doubt I will follow either exactly as described but I take the most valuable tips and insights and put them into place when I have the time. I say this only because my fly by night method leaves me with loads of free time and almost nothing on my “To Do” list… which is highly valuable to me… but $10,000 a month from Amazon??? Hmm… I might have to rethink that one!

Seasonal Affiliate Sales

barbie screenshot

I have said it before but it warrants a few more shouts… I LOVE seasonal affiliate sales! Well I love all affiliate sales but seasonal affiliate sales provide a huge boost in earnings a few times a year.

The back to school season is a big seasonal earner for me. I would guesstimate that I made AT LEAST an extra $1000 from late July to mid September. I celebrated by buying myself a new camera lens for my DSLR.

I also see increases during Halloween and Christmas, especially the latter. Remember my review of Info Product Killer last year? It teaches you how to create niche web sites, especially Christmas sites. I used the information to create one niche toy site and a Christmas gift guide on an existing site. Today I ran a couple reports to see how much I earned from these in total. I earned $122.52 from the Wall-e site and $804.55 from the gift guide. Since it only took me 5 hours to put them together I earned $185 per hour. Not bad! I Paid for a domain and the Info Product Killer product and made an $840 profit. Again.. not bad! It can pay to invest in quality learning materials. And remember this was in additition to the monthly income I usually bring in… it was a BONUS.

I really want to get on the ball and make a few more this year. Unfortunately, it is hard for me to be inspired by products I wouldn’t buy or use myself. Somehow I don’t see making dozens but that’s okay. AND instead of making whole sites I can take a shortcut and create a Squidoo page.. they do really well seasonally too. I am already seeing my monthly lens earnings go up.

I did a little research for this year and found one of the HOT toys for xmas 2009 will be the Twilight Barbie Dolls, so I threw together a site for them in less than an hour. Then I put together a quickie Squidoo page, and linked to the new site from a few existing ones. I may try to get an article or two up at ezine articles as well. So I am off to a running start and I love the product too. Now I just need to find the inspiration to make a few more, update my ones from last year, and I will be set to make a nice chunk of change again this Christmas…