It's All Over for Minnesota Amazon Affiliates

by Tom Ryan 62 replies
Just got the email from Amazon this morning that because of the recent tax legislation that just passed MN amazon associate accounts will be terminated as of June 30th.

Yup, that pretty much stinks. I have a number of sites that use amazon. My one main site that I build a list in also using Amazon quite extensively because they have all the products that my subscribers use.

I guess I'm going to have to figure out what my option are from here.
#main internet marketing discussion forum #affiliates #amazon #minnesota
  • Profile picture of the author flipfire
    Could you not create a LLC or a company based in a city that accepts amazon affiliates and then paid through the company?

    I'm not actually sure how it works over in the US, i'm sure some other warriors will give a bit more of an explanation on setting up a company.


  • Profile picture of the author Marc Rodill
    Without knowing more, I see two options. You could sell digital products to them. That depends on your market of course. If they don't buy those types of products, you can try pitching them and see what happens and how they respond. Will require salesmanship.

    Also, while you may not be able to be an affiliate, you could acquire the products yourself and sell them as a vendor from Amazon. The good news is you'll make more money. The bad news is you'll have to manage inventory and acquisition costs, returns, etc. Depends on your budget and desire to go down that path obviously but it can be scaled. But I'm pretty sure Amazon will do a lot of the legwork on fulfillment for you.

    There are other options out there of course, but those come to mind.


    PS. Like flipfire said, you could create a Nevada corporation that holds your LLC then you and Amazon will be taxed according to that state. There are several other states too that will give you a level of privacy similar to Nevada too. Leave it up to the government and taxes to ruin a good thing.
    • Profile picture of the author Daniel Elss
      "We are writing from the Amazon Associates Program to notify you that your Associates account will be closed and your Amazon Services LLC Associates Program Operating Agreement will be terminated effective June 30, 2013. This is a direct result of the unconstitutional Minnesota state tax collection legislation passed by the state legislature and signed by Governor Dayton on May 23, 2013, with an effective date of July 1, 2013. As a result, we will no longer pay any advertising fees for customers referred to an Amazon Site after June 30 nor will we accept new applications for the Associates Program from Minnesota residents"
  • Profile picture of the author JSProjects
    Seems to be happening fairly frequently. I agree with flipfire and would look at creating a LLC somewhere.
  • Profile picture of the author Mandi
    You could try finding sponsors through Commission Junction advertising your niche products as an alternative and push your traffic to their store instead. A lot of CJ sponsors pay a higher commission rate than Amazon, and if your content is good enough to convert browsers to buyers, you won't need the power of Amazon to help you finish the sale.

    Another alternative is - I haven't used them before, but from what I understand, you can convert your Amazon links to skimlinks and get a flat 6% commission on your Amazon product sales without having to change too much on your site. This is a bonus for small sellers who don't reach the 7-30 products shipped tiered Amazon commission structure in the first place to boost commissions, but it'd be a bit of a reduction in your profits otherwise. However IMO, 6% is better than 0%. So the benefit here is sending your traffic to the same place as before, but getting your commission check from another source for the same sales.

  • Profile picture of the author wesawu
    No need to worry. Set up a single member LLC in a state that is Amazon friendly and open a bank account in that state. You will also need an office address in that state also. You can open a PO Box in that state and then use the USPS forwarding service for a few months, at least until you get the Amazon Key in the mail. You can then notify Amazon of the new LLC and address and have them reinstate your account. All payments will go to your out state bank account. You can then write yourself a check from that account! Of course you will have to file state tax returns in whichever state you start the LLC. As long as you are the only member in the LLC, you don't have to file a separate federal tax return for the LLC since all income/expense flows thru to your ss#.
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  • Profile picture of the author Lori Kelly
    Wow that stinks.

    Nevada is a good state to set up an LLC. There's no state income tax in that state so no state tax return is filed. A tax return for the LLC is filed on the federal level and then your personal return filed, you will claim any earnings from your LLC on your personal return.

    I don't know about forming LLCs or corporations in other states, but I was registered agent in Nevada for over a decade. You can do the filing on your own (online) and that will save you money.

    You will need a registered agent in Nevada, find one that also offers the business address and mail forwarding. There are many agents who will also help you set up a bank account so you won't even have to leave the comfort of your own home.

    It will take a while, but at least you can get back in the game.

    Good luck and again, sorry to hear about this. It's like someone punches you in the gut.
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  • Profile picture of the author RogueOne
    Just to be fair, there is more to this email:

    While we oppose this unconstitutional state legislation, we strongly support the federal Marketplace Fairness Act now pending before Congress. Congressional legislation is the only way to create a simplified, constitutional framework to resolve interstate sales tax issues and it would allow us to re-open our Associates program to Minnesota residents.

    We thank you for being part of the Amazon Associates Program, and look forward to re-opening our program when Congress passes the Marketplace Fairness Act.
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  • Profile picture of the author Tom Ryan
    While I'm not absolutely killing it with Amazon, I am still contemplating forming an llc in another state. I might wait to see how sales ramp up as my sites grow before I do that, which leads me to the other option...

    In the meantime I may very well use a site like skimlinks or viglink, which will share the commissions.

    So, all is not lost, there are options.

  • Profile picture of the author GforceSage
    Any friends or relatives in other states that could help get you set up there?

    Once it appears that you are operating from a different locale, you can keep rolling.
  • Profile picture of the author teresarothaar
    If you want to set up a corporation, look to set it up in Delaware. This state is very corporate-friendly. Additionally, there is no sales tax here.

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