At the end of the lease in July, they decided that Arizona, while beautiful, and sunny, was just not for them. Family is a very important part of their lives, and that part was still on the East coast. The little MadHatters were also very homesick, and while they loved having a beautiful pool right in their back yard, and no rainy, stay inside days, they were excited to head back.

They made the move quietly in the middle of July, and found a beautiful home in the rolling hills of Eastern Ohio. They have set up shop in Byesville, Ohio permanently and functioning better than ever!

MadHatter has some great new programs that have come on in the last couple of months, and Kristin is preparing to speak about Affiliate Summit East in New York on August 17th.

Vanns.com is the leading online provider of consumer electronics, and offers all the home electronics and appliance solutions that anyone could ever want. Vanns.com offers over 40 years of customer service excellence, quality brand name products, real time inventory status, and no sales tax in any states.

You have never really seen a true passion for candy until you meet the owners, Tom and Ryan, of ACandyStore.com. Their obsession, a truly healthy one, started at a very young age, and they have some great stories here about how they got started in the sweetest of industries!

ACandyShop.com is a leading provider of bulk candy to both individuals and businesses, and is perfect for any occasion or event; weddings, birthdays, holidays, ect. The shopping process is amazing, offering options such as buying by types, color, flavor, brand, and types of events/holidays.

Page Mage is a leading provider of easy-to-use tools to aide eBat sellers to achieve better product visibility, listing performance, and boost buyer confidence. Page Mage has create an amazing Page Designer tool that gives eBay sellers complete control over the look and feel of their listings that are focused and dynamic. With Page Mage, it doesn’t stop there, with additional marketing tools and tips, this is a full service listing solution.

Over the last couple a months we have been settling in to our new homes and offices, and building a brand new home online for MadHatter Consulting, Inc, which launched yesterday. We have some great new projects in the works for both affiliates and merchants, and some awesome client announcements coming down the pipe. We are offering some additional services publicly, that we have previously only offered privately including, site and application development, graphic design, and email marketing.

Keep an eye on this blog and our affiliate blog for helpful information, tips, resources, and how-to’s for both merchants and affiliates. This industry is constantly changing and growing, and we will keep you on your toes with all the information in the affiliate marketing and affiliate management world!

Until we write again!

Founded in 2002 in Santa Monica, Dakim is on a mission to fight the progression and effects of dementia and Alzheimer’s disease, and have developed the Dakim BrainFitness System. This system combats the progression of these diseases with rigorous cognitive training, while being engaging and entertaining at the same time! Designed specifically for today’s seniors, no computer experience is required, and is the perfect tool to keep their minds sharp!

If you would like to learn more about the Dakim BrainFitness Affiliate Program or Join, please visit the MadHatter Affiliate Blog!

That $11,000 fine is not true. Worst-case scenario, someone receives a warning, refuses to comply, followed by a serious product defect; we would institute a proceeding with a cease-and-desist order and mandate compliance with the law. To the extent that I have seen and heard, people are not objecting to the disclosure requirements but to the fear of penalty if they inadvertently make a mistake. That’s the thing I don’t think people need to be concerned about. There’s no monetary penalty, in terms of the first violation, even in the worst case.

Liability

The issues that I saw commonly arise throughout the FTC document and not so much in reports is liability. Who is responsible for the misleading/deceptive ad? In one line, page 14, it states:

… if the advertiser initiated the process that led to these endorsements being made –e.g. by providing products to well-known bloggers …. – it potentially is liable for misleading statements made by those customers.

And on page 16 it states:

… that both the advertiser and the blogger are subject to liability for misleading or unsubstantiated representations made in the course of the blogger’s endorsement.

Take a look through the examples that they provide to determine what is appropriate and what is not. It all comes down to substantiation. Can the advertiser prove the claims that are being made beyond a doubt, and are those calms typical?

Cleland also stated:

Our approach is going to be educational, particularly with bloggers. We’re focusing on the advertisers: What kind of education are you providing them, are you monitoring the bloggers and whether what they’re saying is true?

While the fine seems to be a defunct, myth, consequences for the merchant (or advertiser according to the FTC verbage), are what they are going to be focusing on. Merchants need to take a very proactive role in informing and educating your affiliates. Make sure they know what they can and can’t say, and monitor those affiliates to make sure that they stay within the guidelines.

Getting the information out to all affiliates, no matter their size, is going to be key. I don’t believe that affiliates are going to purposely disregard the FTC regulations, but if they don’t know about them or what they mean, how can they become compliant? New affiliates enter our industry everyday that do not understand the complexities that exist within it.

Merchants, here is your checklist to make sure the FTC won’t be knocking on your door:

1. Read the document. Yes, it is 81 pages, and yes some of it does make your eyes start to roll into the back of your head, but having an understanding, or at least as much as you can despite all the gray area is crucial. The actual verbiage of the guides starts on page 55.
2. The very next newsletter that you send out, give a bit of a breakdown of what is going on, make reference to the FTC document. Make sure they know that they need to be in compliance. Make sure your affiliates have the facts about your products, and if they don’t, or you have too many to cover, make sure that they know they can ask you for any information that they need to be compliant.
3. Consider revising the terms of your affiliate program once you have a firm grasp what this means for your program/company, to reflect your actions to those affiliates who are not following the guides.
4. Monitor your affiliates. Check up on them to make sure they are being compliant, and if they aren’t make sure that they are aware of the new guidelines.
5. Most importantly, be there for your affiliates. Help them when they need it, guide them in the right direction, and answer any questions that they have!

Clear as Mud!

While this document, specifically makes reference to blogging, and pay per post marketing channels, it is not specific about affiliate links in general and/or how to disclose.

Within the verbiage of the Act, it makes reference to Network Marketing Program. While this does not make specific reference to Affiliate Marketing, if push came to shove, I would go as far as to assume that Affiliate Networks would be lumped in to that definition.

What is the best way to disclose? Apparently only the FTC knows, and they don’t have any plans of sharing that with us. While they tend to be old school marketing, perhaps they don’t understand the many ways that new school, online, social, ect can disclose. Is putting it in the T&C or the privacy policy enough? Does their need to be an individual disclosure page? Can it be on the about me page? Does it have to be after or with in each post? Does it have to be after each endorsed product (ie. If you endorse 3 products in one post, do you have to get down right redundant, I receive money if you click on this link and make a purchase?)? The questions are endless.

While many bloggers out there give their complete and honest opinion about a particular product or brand one way or the other, there are plenty out there that are not. Remember, this is to protect the consumer from false reviews and lies, when it has become a time that sites are constantly undergoing scrutiny of whether or not they are credible.

Be prepared for the unconstitutionality argument. ‘It is my first amendment right to say what I want.’ Sure it is, but do you really want to use that to lie, and deceive your users? And I’m sure you will not continue that relationship if they refuse to compile which will kill the relationship (money/products), and any liability.

This is very much a subjective matter. An endorsement may look deceptive to one person, and not to another. The FTC is reserving the right to make the call on this, so it is much better to be safe, then to cross the government on this one. After all, for many, this is their livelihood.

The conference, although not at the best time for fellow affiliate marketers, is August 13th to the 15th. Before you start checking your calendars, yes it is the same week as Affiliate Summit East in New York, but Affiliate Summit is Sunday through Tuesday, Blog Indiana 2009 is Thursday through Saturday. Plenty of time to come home, catch up on email, and head back out.

Are you or will you be in or around Indiana? Do you have a blog? Then come on down! There are some great speakers both locally and nationally in attendance, including myself. Speaking and helping me, Kristin Kinsey (@kc), bring the affiliate marketing flava’ will be Carolyn Tang (@catango), Director of Client Services at ShareASale.com and fellow Blogger, and Tricia Meyer (@triciameyer), Blogger, Affiliate, and all around awesome Hoosier.

Don’t let me self session touting fool you. There is going to be a wealth of information there. Just check out a few of the session titles:

Why Blogging is Your #1 Search Marketing Tool – Chris Baggott
The Math Behind Your Blog – Mike Seidle
Promoting Your Blog Through Social Media – Erik Deckers
Why social blogging and status updates are business and thus profit – David W. Grigsby

And those are just a few ……

We are bringing some affiliate marketing flava to Blog Indiana 2009 and hope to see you there!

Yesterday I had the pleasure of sitting in on a webinar with Melanie Seers founder of AffilaiteVoice.com, and it was very enlightening. Here’s is some of the things that I learned.

• The Hawaii Tax Bill will go in effect July 1st.
• The only safe states are Alabama, Delaware, Oregon, New Hampshire, and Montana because they do not collect sales tax.
• That while you may not hear about the Bill, many states are drafting, or considering similar bills, if not already hearing. Find out what your state is doing!
• SSTP (Streamlined Sales Tax Program), while not the best solution, is a better solution.
• 23 States are already members (or in the process of becoming members) of the SSTP (with several others on the way), and if passed in Congress and signed by the President, these states will immediately will require the collection of Sales Tax.
• SSTP will greatly reduce the complexity of remitting sales tax to states (from over 800+ tax districts to 50? that’s a big drop). It has been proposed that merchants will pay the state, and the state will remit to the counties.
• And most importantly I learned that not every single state defines a nexus the same way. Ie, New York said a merchant has a nexus if affiliates made $10,000 in the 4 previous quarters, while another state (confirming which) says it doesn’t matter if you meet a threshold or not, you have a nexus.

Merchants, this is a very serious issue and should not be brushed under the rug. With soon to be 2 states having this type of law in effect, it is expected to steamroll through the country.

Yesterday, while speaking with a merchant, I was asked, how will they enforce these new laws, which I am sure is a question on many merchant’s minds? Massive Audits, Networks’ & Merchants subpoena’d, ect. Do you want to be held on charges of fraud, tax evasion, or worse?

Merchants, I am writing this to you for several reasons. First, Affiliates are working their hindends off fighting this, while Merchants are sitting back. Merchants, we need you to step up and help in this fight.

• Keep on top of the bills in each state. Watch the language and make sure you know and understand what each states definition of a nexus is.
• Email, write letters, and visit reps, even if they aren’t in your state. Write or meet on the behalf of your affiliates that are local to that state. Level with them and they will level with you.
• Keep your affiliates informed! This is so important. Which do you think is better, letting them know well in advance what is going on, even if you don’t exactly know what that is, or spring your decision on them last minute? Think about it, what if it is appealed? Would your affiliates come back if you were on the level with them every step of the way, or if you just dropped a bomb on them?
• Contact your local reps even though you already collect sales tax in your state. You may be asking ‘why? My competitors will lose there edge that they have over me locally’ Sure, this may or may not be true, but do you want to contribute to squashing small businesses, or do you want to help them and your community?

Merchants, now is not the time to be a part of the problem, but a part of the solution. Very worse case, if fighting these bills fails, instead of removing affiliates as soon as bills are being signed into laws, we should all be working together to devise a plan on how we can collect and remit the sales tax. While collecting the sales tax is not a major issue (a script on your site could solve that problem), it is an accounting nightmare, but not one that is un-doable, whether through lobbying for SSTP, or creating a solution that can be used industry wide.

Thanks to Melanie, AffiliateVoice, and all those that participated on the call.

Last year, New York passed the coined, ‘Amazon Tax Law’ which says that if a company, lets say based in Indiana, has affiliates producing $10,000 in revenue a quarter in New York, the Indiana based company now has a nexus in that state, and must pay sales tax to the State of New York. When this happened, Amazon filed a law suit, appealing the new law, however, Amazon did not succeed.

Throughout this year, similar laws are being brought before State after State. Some, such as California, triumphing over the impending legislation, at least for a short while longer, while others, such as North Carolina and Hawaii, are battling it out as we speak.

Amazon has been among the first to drop affiliates, or warn affiliates that they will be dropped when the legislation progresses, but are they really just warning affiliates. Is there something more to it? Is Amazon, whether on purpose or not, threatening States?

If North Carolina passes this bill in the next couple of weeks, Amazon has already sent out notice earlier this week that they will, without hesitation, drop North Carolina Affiliates. North Carolina, take this notice from Amazon as a warning, all of the planned tax dollars that you are expecting to see …. Gone. North Carolina, you won’t see it. It won’t make up for that gap you are trying to fill in your budget, and you will only add to your state resident’s financial woes, including smashing a portion of your small business based in your state.

Hawaii, the same goes for you, and any other state that is considering any type of legislation like this.

While I understand that states are trying to claim sales tax that they feel is rightfully theirs, this is being done the absolute wrong way. States, step back, take a look at what you are doing to your local small business, to your relationships with your citizens, then re-evaluate what is important, and make a plan that will actually work, on an all encompassing federal level.

Heed Amazon’s warning, don’t pass these types of legislation. You will not gain what you are hoping.