[ @issue #3 ]

A R G U M E N T S A B O U T

California’s newly-mandated Internet sales tax, and the repercussions for retailers

It is with great regret that we are terminating your participation in the Powell’s Books, Inc. Partner Program. We need to do this in response to the online sales tax bill passed by the California legislature that will become law in September.

— e-mail from Powell’s City of Books, 8/22/2012 at 4:12 pm

And it’s déjà vu ... all over again!

I was stunned to receive this e-mail from Powell’s City of Books about a year after deciding to partner with them (on 6 July 2011), having been similarly terminated from Amazon.com’s Affiliate Program on 29 June 2011.

In his e-mail notification of 8/22/2012, the Powells.com representative gave a somewhat different, but still related, reason for taking the exact same action in August 2012 that Amazon.com took in June 2011:

As an independent retailer, we support and respect local economies and communities and do not disagree with the notion of collecting sales tax online for out-of-state purchases. However, at this time, the costs involved in implementing sales tax on our sales to California would be too high for us to bear. Thus, in order to comply with the new law, we are closing all partner accounts based in California.
This was a very difficult decision for us, and a great deal of consideration has gone into it. We hope for your understanding.

— e-mail from Powell’s City of Books, 8/22/2012 at 4:12 pm

What I do understand is that the fee-for-referral program business model is not working for any of my websites, and I will not be pursuing any more such affiliations in the future. Bookselling has never been part of this website’s core mission, as I already noted elsewhere when I wrote:

From the outset, we have provided Amazon.com book links as a value-added service for website visitors: convenient pointers to vetted, relevant information which visitors might not otherwise seek out. The pursuit of kickbacks for marketing Amazon.com products has always been a secondary aim, with the predictable result that the pin money received from our affiliation with Amazon.com doesn’t come close to covering our costs for developing and maintaining the online referrals. As such, we have less to lose than most Amazon.com Associates in shifting allegiances and partnering now with a brick-and-mortar retailer, the independent bookstore Powell’s City of Books.
Because Amazon.com still dominates the world of online book reviews (due to the quantity of its user-generated content), we will now include links to Amazon.com’s review pages (when these exist) for a recommended book, juxtaposed with links to sales pages for that book at Powells.com.

(posted July 2011 to this website’s At Issue: Amazon Associates Program Web page)

This compromise did little to resolve the age-old conflict between the scholar and the marketplace. Even worse, all the extra

[For more book reviews, click/tap here.]

links led to some inelegant information design, none of which generated commissions. The truth is, websites like mine, which do not actively promote book sales, will never bring a bookstore like Powell’s enough revenue to justify the added expense of changing their accounting software. So I do understand that this is the right business decision for Powell’s, even as I question the business model driving that decision.

The termination with Powells.com was effective 29 August 2012, and I have already removed most Powells.com links for book titles throughout the website. The same e-mail terminating our participation in Powells.com’s Partner Program promised that this website’s partner links should continue to work:

Again, we’re very sorry about this, because we know that you know that we’re not just another bookstore and that our customers aren’t just any customers. We do appreciate your loyalty, and though your links will no longer accrue commission after noon on Wednesday [8/29/2012], they will continue to bring your visitors to the correct landing pages on Powells.com.

(e-mail from Powell’s City of Books, 8/22/2012 at 4:12 pm)

But I will no longer be linking to book titles or customer reviews at either Powells.com or Amazon.com unless I have a special need to do so.

As with Powell’s, so with this website: “the costs involved [are] too high for us to bear.”

As I have neither time nor inclination to rewrite the At Issue: Amazon Associates Program Web page (originally posted to this website in July 2011), I shall keep the working book links that are on that page. And I will keep on updating the media links section towards the bottom of the page, for continuing coverage of California’s newly-mandated Internet sales tax, and the ongoing battle with online retailers such as Amazon.com over tax reform. These are pertinent issues for e-tailers, as well as for those of us living in California, especially come September 2012, when Amazon.com begins collecting California state sales tax for online purchases by California residents.

That complicated story is still unfolding ... even as I close the chapter on our partnership with Powells.com.