Affiliate Summit East 2009 is just a few days away! It is being held at the Hilton Hotel in New York City and starts Sunday, August 9, and ends Tuesday. Although the first day of Summit is Sunday, like many others, I am arriving Saturday and leaving on Tuesday. You’ll find me in many places including the Affiliate Voice, LLC table at Meet Market and speaking at the Tax Impact and Issues session.

On Monday and Tuesday I will be meeting with several people getting feedback on various industry issues. I will also be attending several of the other sessions and visiting other exhibitors. If you would like to set up a time to meet, send me a dm on Twitter, Mellies, or send me an email. You can also just stop by the Affiliate Voice table at Meet Market (table # 28) or just stop me when you see me.

Sunday is the Meet Market. For most of the day, you will find me at the Affiliate Voice table (table 28). Rhea Tannenbaum and I look forward to meeting and talking with everyone. Be sure to stop by.

On Sunday at 1:30 I am also a speaker at the panel discussion “Advertising Tax Impact, Accomplishments and the Future” (Session 2c, Classroom C – Concourse A). The advertising or Internet sales tax is an issue that impacts everyone in the online marketing industry. Please join, Brian Littleton, (CEO ShareASale), Karen Garcia (partner GTO Management), Beth Kirsch (volunteer Performance Marketing Alliance) and myself, Melanie Seery (President Affiliate Voice LLC) as we discuss this issue. Bring your questions!

Advertising Tax Impact, Accomplishments and the Future
Session 2c
Location: Classroom C – Concourse A
Time: 1:30pm-2:30pm

Discussion on the Advertising Tax by industry leaders that have played a key role in organizing industry advocates and educating legislators on the impact of state tax nexus legislation.

•Brian Littleton, President / CEO, ShareASale.com (Twitter @Brianlittleton) (Moderator)
•Karen Garcia, Partner, GTO Management (Twitter @karengarcia)
•Beth Kirsch, Volunteer, Performance Marketing Alliance (Twitter @bethkirsch)
•Melanie Seery, President, Affiliate Voice (Twitter @mellies)

Affiliate Summit is a great event, lots of informative sessions and great networking both formal and informal. There are several parties, and Missy Ward has a great list on her blog. Be sure to see Missy Ward’s Party List so you don’t miss anything!

There is also a Silent Auction to benefit Big Brothers Big Sisters taking place on Sunday.

I am really looking forward to attending another Affiliate Summit and hope to see you there!

Although California Bill 178 is not yet passed, it is my recommendation that California affiliates begin to prepare their websites and business model. Starting the process now will ensure that they are ready in case the law passes and merchants begin to sever relationships with California affiliates. New York Affiliates were caught by surprise, no one had anticipated that terminations would occur. California Affiliates are at a slight advantage because they know that if the law passes terminations are very likely. As I indicated the other day, California Bill 178 is stricter, there seems to be little wiggle room. Since the potential damage is great, preparation is crucial.

The first step for California Affiliates is to identify the risk for each of their relationships. Examine each merchant and divide them into three categories. Category one will be those merchants who collect California sales tax on online sales. The second category are those merchants who only sell non taxable items. The third category are your vulnerable merchants.

1. Examine the website of each merchant. Does the merchant through their online website charge sales tax to California residents? Do not assume that because they have a brick and mortar store in California that they also charge tax online. As NY Affiliates discovered, stores often set up separate companies to deal with online sales. Verify that the merchant collects the tax for online sales.  If the tax is collected online, the merchant can be considered safe. If they do not collect the tax continue to the next step.
2. Is the item taxable? If the merchant only sells non taxable items, the relationship is not at risk.
3. If the tax is not collected and the item is taxable your relationship is vulnerable. Your relationship with these merchants can not be considered safe. Do not assume that because you are on friendly terms with the program manager and are a good or even top producer that your business relationship is safe. As NY Affiliates found out the decisions are often made at the corporate level or by lawyers and accountants. The decision to collect the sales tax will not come easy to many merchants. Many will decide that it is not worth the hassle to collect the tax or that their customers will not want to pay the tax resulting in lost sales.

Once you have identified which of your relationships are vulnerable begin to find replacement merchants. These will be your back ups in case you are terminated once the law takes effect. For every vulnerable merchant find two or more replacements. Make sure these replacements charge California sales tax with online sales. Once you have a couple of merchants that are potential replacements I suggest applying to the program if you do not already have a relationship and begin to test much like you would under normal circumstances.

Keep your lists of merchants accurate. As you join new merchants add them to the proper list. Each merchant name should have good contact information and details on the tax condition. Once the law passes contact every merchant who is on your vulnerable list; ask them what they plan to do. I suggest that in addition to emailing the merchant you address the issue publicly. Do not wait for the merchant or program manager announces a decision to ask questions. Be proactive and reach out to them as soon as the law is passed.

Some merchants will give you advance notice before terminating, if you are lucky it will be a week or two. Others may not know until the last minute and you will be terminated with little notice. California Affiliates have the advantage of having seen what happened to NY Affiliates. Understand that terminations will happen. You need to be prepared.

Some merchants will let you know that they are terminating you because of the tax. But, as any New York Affiliate can tell you, there will  also be merchants who will just terminate you without mentioning that it is due to the sales tax, instead you will just receive a generic reason.

California Affiliates need to prepare themselves, do not be lulled into a false sense of security thinking the law will not pass. Prepare yourself and your business. If the law passes you will be in a better position to survive. If California Bill 178 is not passed you can breathe a little sigh of relief.

Merchants outside of California and New York can also take steps. The easiest answer is to collect and remit the tax.

As you know the tax law was upheld in NY. Other states are poised to take similar actions, California is just the second. Dozens of other states are ready to enforce the tax laws. The tax is already due, all that is changing is the method of collection. Your customers owe the tax anyway. Contact a sales tax attorney and ask them. Then call your accountant or accounting department and start collecting the tax.

If you have already removed NY affiliates, and are ready to remove California Affiliates, will you be prepared to remove affiliates from dozens of states as similar legislation is passed?

I urge everyone involved to learn from New York. Prepare. Keep communication open and honest. Remember, we are ALL business people.

I think I first met Andy Rodriguez, of Andy Rodriguez Consulting, at the very first ShareASale Think Tank in 2006. I was a bit nervous to meet one of the most successful and knowledgeable people in our industry but Andy immediately made me feel at ease. Since that first Think Tank I have met with him several times and I consider each moment precious. His confidence and positive approach to life is contagious.

Andy is one of the most respected and most successful Outsourced Program Managers (OPM). Just in case you are not familiar with the term, an OPM manages a merchant’s affiliate program, maximizing the performance. The services of a quality OPM add immense value and success to a program, benefiting everyone. Andy Rodriguez offers merchants a free program evaluation, details on his website, Andy Rodriguez Consulting.

Many try to emulate both the style and results of Andy Rodriguez but Andy sets a very high standard. He achieves success while maintaining integrity and strong ethics. For Andy it is not just a style or method of conducting business, it is a way of life. As Andy says “I have been very blessed both personally and career wise. I attribute much of that to serving God and always doing “the right thing”, and taking the high road. It’s the way I was raised and the way I run our business.”

Andy quietly gives to the industry in many ways, sharing knowledge and offering support wherever he can. Back in May when we announced we were planning a meeting to work on the NY affiliate situation, Andy Rodriguez not only stepped forward to help cover the cost of meeting venue, he offered, more importantly, to attend the meeting. We welcomed Andy’s participation because we knew we would get thoughtful and honest feedback. His support and participation at the meeting was an integral part of our success.

A few moments with Andy will show you some of the reasons he is successful; he not only has the knowledge and expertise he also helps others be successful. Andy explains, “After close to 8 years working in the affiliate space, the most important thing I have learned is that in order for me to be successful, I have to help other people become successful. This is not only the basis of performance marketing but the basis of life in general. We are here to serve and help others as much as we can.”

Those are not just words; they are proven with his actions and with results. Andy helps others not for fame, but because he believes he should. It is that very approach that leads to success of everyone. As a result, his programs are usually in the top 100 PowerRank at ShareASale and his affiliates among the most successful. Andy’s approach of helping others succeed has another result that is equally important; the valued partnership or relationship that develops. This relationship is one based on open communication, honesty and integrity benefiting everyone. Andy treats everyone with respect and values each of these relationships.

Andy Rodriguez, proving that ethics and success do go together.