It seems like NY affiliates are being hit with a virus. The outbreak was first observed back in the middle of May. Over the past two months the infection has gained momentum. Symptoms include inability to work, reduced income and decreased interest in websites. The symptoms increase in intensity with each new termination from a program and when each application to a new merchant is rejected based on applicants geographical location. The loss of income and the struggle to move forward can also lead to depression. The final stage is the decision to leave affiliate marketing.
To understand what it is like to be an affiliate from New York imagine the following. Imagine you own a store in town. Each Monday as you arrive to open for the day you have a notice that another of your suppliers will no longer do business with you. Some of the items can’t be found any where else. Other items are sold by other suppliers but they still haven’t agreed to do business with you. Slowly your shelves are emptying, and you have nothing to fill them with. You can see how hard it is to remain optimistic.
Maybe the above is a little dramatic but the point remains. NY affiliates are facing a big challenge in keeping their business afloat. Some are finding that is difficult to recover. It is now about two months after the first terminations began to hit and the decreased income is now being felt. Back in late May and early June, affiliates wondered how they were going to adjust and survive. Overall, in spite of the confusion and the uncertainty, we were mostly optimistic, though we knew it would be an adjustment.
Now, two months later, I see a different situation. It is more divided. Some affiliates have either been able to fall back on other sources of income or are starting to see their business recover. For many it is a different story. Far too many are doubtful about their future in affiliate marketing. Many are deciding that the struggle is just not worth it.
Over the past two months many New York affiliates have been struggling to survive and forced to make adjustments. How quickly an affiliate could adjust depended on many variables including the niche, the business model, and the products and merchants that needed to be replaced. In some cases it is proving to be impossible to recover.
We don’t mind adjusting our business and finding new merchants but the problem is the everchanging scene. Merchants are continuing to drop NY affiliates. They did so as recently as July 21. There are far more merchants who have decided to not work with NY affiliates than appear on any list. The plain and simple truth is that merchants who do not have any other cause of nexus are refusing to work with NY affiliates. Some may deny it is so, but they aren’t New York affiliates. Others say it is only 1 or 2% but that number is far from accurate.
The effect of the current situation is not merely decreased income. I have come to the realization that many NY affiliates are becoming depressed. Affiliates in general have drive, ambition, creativity and an independent streak but it is difficult to maintain optimism when you don’t have a fighting chance. It is hard to avoid feeling depressed when you are losing your business.
The next two months will be make or break for many affiliates from NY. We’ll see what we can accomplish at our meeting next week in Albany and also see what happens at Affiliate Summit East.
Getting clarity on the law is just the first step. The next steps involve us sitting down with the program managers and others who are joining us at the NY affiliate meeting and finding a solution. My hope is that the program managers will be able to convince their higher ups that collecting taxes is the best solution for now rather than refusing to work with us and waiting for it to play out in the courts. Perhaps there is another solution, we will know more by next Monday.
Then the next test for many will be in Boston at Affiliate Summit East. At that time NY affiliates will be able to touch base with more merchants and get a better idea of where we stand. Right now there is no accurate list of merchants who will or won’t work with NY affiliates.
Over the next couple months we will probably see that the loss of income is not just short term. For many it will be long term. I also foresee another wave of terminations just before fourth quarter.
Someone asked me the other day where I thought my business would be six months from now. My answer is I do not know. It’s hard to think when you have a virus.