Tuesday, July 5, 2011

Amazon Affilliates: A Conspiracy Theory

In a world full of conspiracy theories, admit it there everywhere on the internet and in the media.

How about a new one involving the Amazon affilliates, California government and Amazon's bottom line.

The conspiracy goes.

Amazon is rapidly moving away from its affilliates. The company has found it valuable to move into electronic media, MP3 downloads and the massively successful Kindle e-book market and now video on demand. These items have massive profit potential and Amazon likes that. Up until now they have been out of reach of affilliates, the affilliate may link to such media but receive no commission payment for the sale.

Well the company sees the backlash of future payments when affilliates realise the matter and amid falling revenues from traditional items, books, hardware etc they demand payment for the new media. Well Amazon's margins are tight on those items anyway, but as they announced a few weeks ago, Kindle book sales now exceed traditional book sales.
The affilliates are losing their incomes anyway.

So along comes the California legislature, broke, unpopular with many, a shambles at best, but with a nugget of gold in their budget law. Not a nugget of gold for the affilliates.

The legislature agree to enforce sales tax legislation. Put the Bill to be enacted and Amazon see the nugget fall into their lap.

Now Amazon scream foul. The out of state big box companies want to destroy us, this is an unconstitutional move. By the way all you CA affilliates are dumped.

Amazon look good they stand up for the over taxed American consumer, they get a dig at WalMart and Best Buy, they also look slyly at their bottom line. All that affilliate pressure that they would have had to deal with over the electronic media sales has just disappeared from California. 100,000 lots of 4% possible claims for commission has just disappeared from the bottom line.
Profits rise with no affilliate payments.

So who gains? Not the California affilliates, not the California legislature but no-one really cares about those two groups anyway.

But Amazon comes out winning on both sides of the equation!

Either someone at Amazon did think of this already or I bet they wish they had.

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