So, Affiliate Programs are a Bust - Now What Are My Options?
Then I find out that the wonderful state of GA is now (as of this month) officially an Affiliate Nexus Tax Revenue state and Amazon (and many others) will be dropping its GA Local affiliate sometime in the next couple months (likely - haven't got official word on when yet.)
Really not sure what to do from here. I haven't even had the chance to get started good and I find a major road-block keeping me from moving forward.
There are already scarce enough options for affiliate programs dealing in leathercraft materials and supplies, removing Amazon and the other big ones pretty much kills that idea.
I could always go back to trying to market my own leather pieces (masks, armor, accessories) but I came over to affiliate marketing because I could not create hand-made pieces quickly enough and in quantity enough to both keep costs approachable and keep even a minimum income.
So, what are my options at this point?
Are there any, or is it time to realize the dream is over before it's even started?
Thoughts? Suggestions?
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Dropshipping
alibaba.com (get someone who can make enough of them) and you sell them, usually means someone in China or Vietnam or some other far away, cheap place).
tradekey.com
Position yourself differently, so you can raise the prices on your own.
I agree having an out-of-state corporation has a murky air about it. But, what I would do here is go ahead and pay income tax in GA on the flow-through income from the DE S corp. No DE tax returns have to be filed since I am not operating in DE, just incorporated there. And, I am not avoiding sales tax since all I would have is commission income (not subject to sales tax). Conceivably, the GA Department of Revenue could be miffed because I am not cooperating in their attempt to claim nexus for every retailer I send customers to. But, am I legally required to act as their agent in identifying potential sales tax revenue? I don't know. I've always thought sales tax was due based on the domicile of the customer (Dell Computer example) even without this new nexus law. So, if Amazon shipped something to a GA customer, shouldn't they already be paying sales tax to GA? My business is local, so I haven't run into this. If you are concerned about any of the legal aspects, I would visit an attorney. Any state Department of Revenue would answer your questions in whatever way generates the most revenue for them.
yes, technically anyone in GA that buys from Amazon tax-free is supposed to file and submit a Use Tax (same rate as GA sales tax) because it is technically an item imported into GA from out of state.
The only people that know this, though, are retailers and other officials who have cause for understanding how sales/use taxes work.
Best option for me appears to be a DE S corp with a Delaware address and bank account. Set up costs appear to be about $300. Annual costs about $200, including mail forwarding. Many choices as to vendors for all this.
How do the legalities play out for that? Most times when I have seen the Out-of-State business option for getting around the Nexus laws, it has come with a disclaimer about potentially being illegal - or at least fraudulent. Since you deal in taxes and bookkeeping, what sorts of enlightenment can you provide here?
I have no problem with the government collecting tax on tangible goods sold to Ga customers, but this should be happening anyway and probably is. For instance, if you buy a Dell computer, GA sales tax is collected from you and remitted, I assume, to GA. This is different. If I am understanding this right, the trigger to collecting the tax is the commission earned by the Georgia affiliate, not the domicile of the customer buying the Amazon product. I believe eventually this concept will be adopted in all states that have sales tax, so maybe, eventually, Amazon will give up and install compliance systems. I'm sure commissions will be reduced to pay for it. I'm not giving up on affiliate programs, though. Our approach will have to evolve to deal with this new challenge.
I am in GA also and just found out about this from your post. I have family connections in Florida and could set up a corporation there to avoid this new move by the imperial government to crush small business. But, I notice that Florida has a similar bill under consideration. Of course, since it's the government, it's based on a lie, namely that the law is intended to protect brick and mortar businesses within the state from losing sales to internet marketers like Amazon. That is absolute nonsense since people shop online rather than locally because it's always cheaper. Period. It's just a big cash grab by the various state governments. A Nevada corporation may be an option. I will look into it.
I actually do not have a problem with the government getting its tax due from the online retailers. If some companies have to collect/report sales taxes, all should have to. My issue is with retailers like Amazon and some of the others that feel they should get special treatment. I used to live in SC and was privy to the Amazon tax debacle with their creation of a distribution warehouse in the state. I figured out then and there that they're just as bad - if not worse - than the so-called "big box stores" everyone likes to hate on.
In terms of setting up a corporation out of state, I've heard NV and DE are the places to go. Through my day-job, I happen to know that Delaware does not charge sales tax at all, so you might be able to look there as well. Keep me posted on what you find. I'm not in a financial position to be doing any sort of incorporation at the moment, but I'd be interested to know how this all plays out and what's involved.
Well it sounds at least one of your problems is a good thing...not being able to supply enough goods to meet the demand. Maybe...you could start offering your items on your website...and if you start to get backlogged...just take down the offers and put up a "temporarily backlogged" and instead just offer them to sign up on your opt in list...so you can mail them when you are ready to start taking orders again?
Just a thought.
Part of my problem is that between working 46/wk hours full time and living in a small apartment (can't work on leather late at night because of neighbors) I can't get much done in terms of my own production. I was hoping I could start out with the affiliate model until the income from that was sufficient to back off my "day-job" and/or find a place with a workshop I could use for -my- work. Going to have to rethink the plan now.
Hi Michael.
I'm sorry you're going to be caught by IMHO stupid and pointless taxes that will raise nothing for the State. I know these have affected or will affect several other Members.
Have you considered creating your own series of ebooks and selling them direct or on Amazon? I'm not sure how large the market is for leatherworking but the fact that there are two Members in our community with a strong interest gives me cause for optimism. :)
I did a quick search and could find only one that was currently available in the UK store in Kindle format. The physical books listed are not exactly current either.
There are several Members who self-publish here and I'm sure they'd be willing to give you some pointers.
Just a thought!
Best.
Rich.
This is actually a good idea, I had considered it in the past, I even have some notes somewhere.
I know for a fact that leatherworkers buy books, I do at least, have a cupboard full of them. I never bought any ebooks, but that could be really good nowadays. Think of a leatherworker having a laptop somewhere in their workshop, your ebook could link to your site which could have member only (read only those that purchased the ebook and signed up) videos of you doing the work.
I know when I was beginning that having just the books to work with was frustrating, the pictures didnt quite do it in terms of figuring out how to to do some of the complicated lacing etc.
"This is actually a good idea"? You needn't sound soooo surprised. :( Rich. ps. VERONICA!!! He's escaped. :P
It is a possibility. I'm not sure that I have enough authority to be authoring books on the subject though. I really just experiment and see what works and what doesn't.
I do like Apina's idea regarding setting up the subscription/members area with video tutorials (provided I can find a way/place to do my own work any time soon - see above.)
Hi there,
Firstly, its awesome that you are a leatherworker! I did a lot of it my self when I was back in the UK, havent had funds or available resources since moving here, but I have my tools with me.
Obviously one route to take would be to go down the bespoke route, basically charging a lot more for your products, but reputation plays a lot into it.
I'm not sure of your exact niche in this but I found the LARP/SCA area quite hard to find a profitable niche in. Mostly people are either broke or make their own gear or want to physically see the stuff.
If you want to stay in the leatherworking niche but still create stuff, then I would also look at horseriding tack, and dare I say S&M gear, theres profit to be made in that stuff.
OK, back to affiliate programs, first step would be to take your keyword and stick it in Google with affiliate, start borad, narrow down, so start with leather affiliate and move on later to things like rawhide, veg tan, maybe tool names, etc etc, always plus affiliate.
Ya you will get a ton of leather clothing affiliates, work past them, I found one of two that were either good looking products (dont rule out selling the ready made stuff!!) or tools/supplies (but crappy sites unfortunately).
I didnt look for too long so a few hours searching should give you a much better understanding of whjat affiliate programs are out there and which look good/crap etc.
So remember this if nothing else, there is Life After Amazon! Just because you can't use them doesnt mean their arent work arounds.
You could even look at contacting wholesalers and looking into DropShipping - briefly, someone orders from YOUR site, you contact dropshipper (manually/automagically) and THEY deliver it. Worth considering at least.
Feel free to drop me a line at info@apinapress.com if you want/need to discuss this more, im always happy to talk about leatherworking!
I tend to work in whatever strikes my fancy at the time, though I am much more interested in LARP/SCA/Fantasy than I am in Western/Riding.
You point about the SCA/LARPers wanting to do their own work is very valid, and one of the reasons I was looking into Affiliate Leathercraft supplies rather than goods themselves. I can use tips and techniques as informational items to direct people to the site and then market the supplies they will need to do their own work.
I have also briefly considered contacting Tandy to see if we could set up some form of affiliate/wholesale-drop-shipping option, but I will need something to leverage (web traffic being the optimal choice) before this is really an option.
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