Another Day, Another Threat from Amazon

In this morning's business section in the S.F. Chronicle (yes, I still read newspapers, in fact, we get two), there's a story about the showdown between amazon and California over taxing its affiliates. The Affiliates Program is a nice way for people to make extra money. They put an amazon "counter" on their website and if you buy through them (lots of authors have these on their websites), then you make a little dough from amazon and amazon gets the sales. Except if you buy in California (if it were any other purchase you'd have to pay sales tax), you don't have to pay sales tax because amazon is located in Seattle.

amazon is already embroiled in a similar lawsuit with the state of Texas over this issue. Yesterday, amazon threatened to pull the plug on all their California affiliates, much like they have done in much smaller states. California, as always, is a huge hunk of the pie, and I think they think that this will make their demands even more, ooooh, scary. Except, sometimes capitalism works the way its supposed to. Because no sooner did they issue this smack down (shades of the same aggressive, take-no-prisoners approach they displayed in the Macmillan/amazon dust up last year) when a whole bunch of other retailers said, "Hey, Affiliates, come on over to us. We want you. Nasty old amazon can cut the plug and we will be happy to play with you."

Which to my mind means that amazon's position has just been seriously undermined. Because people do not have a loyalty to amazon. They have a loyalty to their sales. And if amazon gets all nasty and decides to punish their affiliates because California has the nerve to expect sales tax from materials and goods bought in their state, well, then. You have companies like Barnes and Noble and Walmart willing to step in and say, yoo hoo, come on down. WE want you. Essentially, what amazon has done is to make its affiliates friendly fire in their battle to keep from paying sales taxes in states in which they actually sell. If I were an amazon Affiliate, I wouldn't be too happy right now.

This is a good article.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/03/04/BUCR1I1CKB.DTL&type=business