Colorado affiliates including myself successfully lobbied to get affiliates removed from HB-1193. Lawmakers excluded affiliates from the bill and passed it. Amazon must have decided they didn’t like the bill and decided to fire all Colorado based affiliates.

The biggest crime here is that Amazon is leaving all links in place and accepting sales from these Colorado affiliates. So affiliates who have spent years building up businesses may have 1000’s of links in place over many websites through which customers are still flowing to Amazon. The only thing Amazon has changed is that they are no longer paying Colorado affiliates their hard earned money. I’m praying for a class action lawsuit. Anyone know a good lawyer?

Below the Fail-ometer is a copy of the letter my family members received yesterday:
“The Fail-ometer”

“Dear Colorado-based Amazon Associate:

We are writing from the Amazon Associates Program to inform you that the Colorado government recently enacted a law to impose sales tax regulations on online retailers. The regulations are burdensome and no other state has similar rules. The new regulations do not require online retailers to collect sales tax. Instead, they are clearly intended to increase the compliance burden to a point where online retailers will be induced to “voluntarily” collect Colorado sales tax — a course we won’t take.

We and many others strongly opposed this legislation, known as HB 10-1193, but it was enacted anyway. Regrettably, as a result of the new law, we have decided to stop advertising through Associates based in Colorado. We plan to continue to sell to Colorado residents, however, and will advertise through other channels, including through Associates based in other states.

There is a right way for Colorado to pursue its revenue goals, but this new law is a wrong way. As we repeatedly communicated to Colorado legislators, including those who sponsored and supported the new law, we are not opposed to collecting sales tax within a constitutionally-permissible system applied even-handedly. The US Supreme Court has defined what would be constitutional, and if Colorado would repeal the current law or follow the constitutional approach to collection, we would welcome the opportunity to reinstate Colorado-based Associates.

You may express your views of Colorado’s new law to members of the General Assembly and to Governor Ritter, who signed the bill. [3 links removed]

Your Associates account has been closed as of March 8, 2010, and we will no longer pay advertising fees for customers you refer to Amazon.com after that date. Please be assured that all qualifying advertising fees earned prior to March 8, 2010, will be processed and paid in accordance with our regular payment schedule. Based on your account closure date of March 8, any final payments will be paid by May 31, 2010.

We have enjoyed working with you and other Colorado-based participants in the Amazon Associates Program, and wish you all the best in your future.
Best Regards,

The Amazon Associates Team”

I’m taking up the cause to show him a little charity but I can’t do it without your help. I’m taking up a collection to get him a little present that should help him stick around in our industry. Just a little something that will make his life easier when he goes to industry events.

What is it?

Drum roll………

It’s…..

The Spit Sock Hood!

If you don’t know why Dennis Yu needs a spit sock hood, I present several reasons:
Here is the article Dennis wrote that started it all. Followed by responses from Shoemoney, ppc.bz, Uber, Nickycakes, John Chow, Trevor Nash-Keller, and more.

Now seriously folks. I’m worried about the guy. He’s gonna keep showing up and he’s gonna need lots of spit sock hoods.

Now they only cost $3.95 for one or $44.64 for 12 of them. Donate any amount you feel comfortable with and my hand to God, I’ll put your donations together and ship as many Spit Sock Hoods as we can afford straight to BlitzLocal’s offices located between the dumpster and recycling bin behind Chuck-E-Cheese in some bad neighborhood in Denver.

If this little fundraiser is successful, we may hold a follow-up fundraiser to get him some much needed supplies like this book:

Does anyone else have some nice gift suggestions?

HB 1193 was modified on 02/08/10 eliminating affiliates from it’s terminology. Lawmakers succeeded in preserving 100’s of jobs that are pumping money into Colorado’s economy.

UPDATE: Well Amazon decided to fire affiliates anyway and keep their business at the same time.

November money spent:
$5,179.30

November money earned:
$13,153.32
$151.76 referral income from Market Leverage
=$13,305.08 total gross profit

$8,125.78 total net profit for November

Looking forward to December my goal is to net $15,000.  My strategy to achieve it is to focus on increasing ROI….specifically I’m working on reducing my CPC and using the surplus to fund new campaigns. Also, I’m working on increasing CTR and Conversion rates.

Go back in time and see my affiliate marketing profits for July through October 2009.

I’ve received similar requests from various people who have varying levels of knowledge of the internets. My responses tend to vary to try to match what I think that person’s level of expertise might bear, but generally, I’ll help anyone I can.

First I try to figure out what that person wants to do from these 3 choices.
1. You can sell your labor to others for nearly guaranteed income. (write articles, sell stuff on Ebay)
2. You can trade your labor for free traffic. (SEO)
3. You can pay for traffic. (PPC, etc.)

Then, most of the time I tell them to go to digitalpoint forums or to warriorforum. (Google it if you need to. I’m too embarrassed to actually link to them.) If someone is already making money online and is new to the affiliate space, I’ll send them to wickedfire.com with a few words of warning. Here are micro-reviews of these 3 resources:

1. Digitalpoint forums. Great for newbies, but you don’t need to ever buy an e-book. There are many 1000’s of participants, but the problem is that most of them are newbies too. When I was a newbie, I spent a fair amount of time here but no more. I feel like I’ve outgrown it. Still, because of it’s massive size, it’s worth mentioning.

2. Warriorforum. Back when I was a newbie visiting digitalpoint, my wife was a newbie visiting warriorforum. I personally have spent less than an hour on the site, but 2nd hand I’ve learned that it’s a great site for women or people new to making money online who want to SEO their way to free traffic. The folks at warriorforum are ‘nice’. Which leads me to our last mini-review.

3. Wickedfire.com. From the perspective of a newbie, woman, or anyone with much of a sense of decency, wickedfire is hostile and offensive. Nudity and hostility are celebrated. Newbies are not welcome. That being said, it is the place to be if you are into affiliate marketing and want to read what people who make $1K to $100K+ daily have to say. For what I do, this is my first stop when looking to get a question answered. Well, maybe I’ll ask a friend first, but you get the point. If you are a new affiliate I’d advise you to lurk only. Try not to speak.

So generally, if someone asks me how to make money online, I’ll try to pass the buck to one of these 3 resources. If someone knows nothing about how internet money moves around, they can get a good feel of it from these forums and along the way probably make a few new friends of their own with similar interests and skill levels.

What advice do you find yourself giving to marketing newbies?

2. Taxes – Several US states have no income tax. You can save some money on taxes with an LLC but to justify it for this reason alone, you probably need to be making $10K or more per month. You still need to pay federal taxes and if you live in a state with income tax you will generally still be paying taxes to your state for any salary or bonus you take.  If you are making big bucks, there can still be tax advantages but you should be talking to a tax planner to set it up right. If you don’t do things right, an LLC can be a tax liability putting you in the position of paying taxes twice. Be careful with this. But if you ARE making big bucks than it will be worth it to set yourself up properly. For example, if you are banking a $million per year, you can leave the assets in your company which may be taxed at a lower rate than you. The company can also do clever things like own your home and car or pay for your health insurance and have an “employee” retirement plan.

3. Stability – It’s a big temptation to spend your money in the good times and be broke in the bad times. Personally, I live on a fixed salary which I draw from my LLC. Anything over my salary stays in the company accounts and is building up to become a warchest I can use when it’s time to take things to the next level. My plan is to have my LLC own rental properties which will provide  hedges against inflation and loss of income.

4. Security – Got PPC accounts? CPA accounts? An Adsense account? Well if you have an LLC, it has it’s own tax id number and can have it’s own accounts separate from your own. If you lose a critical account of some sort, having an LLC in place can offer you a way to get your foot back in the door quickly. If you’re smart you’ll have backup accounts ready to go before you have a problem. Be careful here. Lots of people use this as a technique which may violate user agreements with some companies. For increased protection from loss of critical business accounts, you might want to use a registered agent service which gives you a different (forwarded) address for the business and further isolates it from you. This can give you access to credit cards with multiple addresses which you may enjoy.

5. Trust – If you live in certain countries you may find it more difficult to get approved for CPA accounts etc. If you have run into this problem and want to avoid it in the future you can set up a USA based LLC and legally it is as if the company is a US citizen. Your company lives here, pays taxes here, and can get in trouble with the law here. It can be sued or even fined for criminal offenses. The Limited Liability Company gives you a US presence. With a registered agent service, you have a USA based address which will forward all mail to you wherever you may be.

6. Estate planning – If you have kids like me and plan to be mega rich, you have to figure out how to set up your estate. My “Wyoming Close LLC” allows me to make my kids members of the company. The company can own assets like real estate. When they inherit the estate, the Wyoming Close LLC will reduce their tax liability by about 50%. It also provides a form of protection you’d never think of but which I like. Should one of my 5 kids get divorced after inheriting their membership in the company, their ex-spouse cannot touch or acquire any share of the company. It essentially functions as a bulletproof prenuptial agreement for all my kids.

THE ULTIMATE PROTECTION: If you are a big affiliate and are playing chicken with the FTC, or consider yourself at higher risk of lawsuits, you might want to consider having businesses set up overseas which in turn operate in the USA. I can’t provide any advice to this end. Remember, I’m not a lawyer. But if you have a foreign company structure like this, then if anybody wants to sue you or come after you, then they’ll have to pay for lawyers in the USA and in whatever country you’re based out of. Of course so would you but you’re rich right? Anyway, it is possible to have multiple jurisdictions like this which increase the barriers for legal actions against you. Personally, I’m not operating in a very high risk fashion at all and a USA LLC is good enough for me.

Can you tell us another good reason for having an LLC or do you have experience with foreign entities? Please let us know in the comments.

July 2009
I had some good things going here, and made about $500net/day on July 4th and 5th. Then Adwords slapped all my campaigns for Resveratrol rebills and I was out of business. I took a couple weeks to rethink my strategies. I would rather not have my business at risk of being crushed at any time by Google. Therefore, this marked the end of my Adwords advertising. All of my July profit was made in the first week of the month. The next few weeks were spent inventing and beginning to implement a new strategy.

July money spent:
$2231USD

July gross profit:
$4158

Net money earned in July:
$1927.

August 2009
August represented starting over with new campaigns and traffic sources. Sorry, I’m revealing a little less about my earnings these days but I will say that YSM Yahoo Search Marketing is fairly prominent in my spending now when it wasn’t before. Late in August, we found out my wife was pregnant again.

August money spent:
$1487.

August gross profit:
$3891.

Net money earned in August
$2004.

September 2009
I shifted offers from one to the next in September and changed all my offers around entirely and by the end of the month things had become pretty stable. With my wife being pregnant I worked towards promoting more stable offers which would be less likely to be pulled down at a moments notice. No rebills for me now. I wanted to be able to take time off to take care of my family. With Janeen out of commission, I’m taking care of the babies, especially in the mornings. Also, it was a real struggle to shift away from my night owl working hours.

September money spent:
$2562.

September gross profit:
$5685.

September net profit:
$3123. +$102 Market Leverage referral income = $3225 total September net profit

October 2009
In October I pretty much just scaled up the same stuff I was doing the month before. I worked a lot less actually even though I made more. I continued to struggle to work while taking care of my kids and my wife. Her pregnancy gives her gestational diabetes which in turn causes her to faint and collapse unpredictably. I have to walk with her even just around the house and she is essentially an invalid until after she gives birth and recovers.

October money spent:
$4745.

October gross profit:
$11,693.

October net profit:
$6,948.
(Also I got $248 from Market Leverage as referral income.)
+$248
October grand total net profit - $7196.USD

I’m on track for November to be similar to October, but expect to be able to increase my earnings in December as I have a project or two in the works and am starting to build up enough capital to scale up a little.

Go back in time and see my affiliate marketing profits for June.

So we now have a:
boy 16
girl 13
girl 3
girl 1
? 14 weeks pregnant

So with her being pregnant she can’t do anything. She has gestational diabetes and suffers from terribly frequent fainting spells. Through each of these last 3 pregnancies she is on bedrest. I have to walk with her even just to the bathroom because she faints so frequently. It’s very stressful.

Therefore, in addition to earning a living I am doing the cooking, laundry, grocery shopping, chauffeuring of teenagers, etc. It’s a good thing I’m able to eek out a living on near autopilot. I’m not growing my business as fast as I’d like but am very happy that I don’t have to abandon my family for some clock punching job somewhere.

This recent shift in my personal duties is my excuse for failing to blog or tweet lately. I usually do my best work at night in the wee hours, but now I’m getting up with the babies at 7am and when I have time for work I’m usually too tired and distracted to focus my energies properly.

I’m starting to adjust to the new schedule and expect to get caught up with some blogging and such. Thanks for your patience

I’m constantly torn between work and family, and family has been winning out lately. I pretty much took the last two weeks off, but work has been nagging at me. So watch out! I’ll be making things happen now.

This sort of work/relax cycle is normal for me. Maybe I’m a little manic depressive. In any case, I gotta get back to work to pay the mortgage. You’ll be hearing more from me in the near future.

Do you find your own productivity level cycles? Got any good tricks for me to maintain high levels of productivity? I’d love to hear them. Please comment.