I can fully see how HubPages stands to gain from the new changes in how Amazon earnings will be paid, but my question is, how will Amazon gain?
Let me see:
Lots of people who would have been paid at a lower percentage rate will now be paid at a higher rate for every item they earn.
For the people who earn some money, but don't make the minimum payment threshold of $10 for US and $100 for overseas, that money will be paid in full every month to HubPages.
This is a huge gain for HubPages, but I'm puzzled as to why Amazon agreed to pay out more in total and more sooner. Am I missing something?
It's a puzzle, isn't it?
I'm with you - Amazon looks to lose a good bit here.
HP won't actually earn any more - they have to always be top tier anyway. They [i]do[i] get to float the money for a few days, and get the dubious pleasure of taking care of the bookkeeping and tax reporting. They also get to pay any paypal fees.
What Hubpages stands to gain is that an extra percentage to them means a lot more than us. They are trying to get premium advertiser rates (Which is in itself not a bad idea, many affiliates barter for better commission) in certain product areas.
For instance someone making $10 a month, or even $100 a month will only see a small increase, however Hubpages makes a huge amount every month, so even just an additional 1% to their commission structure could make a huge difference.
How could Amazon benefit from this?
Either Hubpages is using us as leverage (Ie. give us better terms or we take our sales elsewhere.)
Or they have offered to invest in advertising methods for other Amazon platforms, including Amazon's clothing lines or their international operations.
But how can HP get into a higher tier? They already have their code on 40% of the total sales - surely they are already maxed out. Unless, as you say, they are trying to negotiate something beyond the tiers offered us hubbers.
I DO think we hubbers are a lever being used by HP, but don't what that lever is doing, and probably never will.
When they get sales through someone who is on a lower tier do HubPages currently get the same % as the Hubber or at their(HubPages) higher rate?
If they are getting it at the lower tier, then after the change maybe all of HubPages sales will be in the higher category. Not sure how it works for them at the moment.
Or is the change a way of keeping things moving if legislation about internet selling changes? If it is that, surely with people from different areas earning as it is now it is spreading the risk but once the HubPages one big account comes in will all be thro' the one account and if it gets 'hit' then what.
Maybe I have not grasped this right, bit early in the day here in the UK.
I guess that Amazon gain by not losing affiliates in states that 'change' the law - think of all the money they had to spend to get the recent law changed - they won't want to do that in all other states.....that's one business reason I can think of.
Since these affiliate partners are paying Hubpages based on sales, it actually means everyone on Hubpages stands to lose their affiliate earnings from Amazon rather than just the people living in affected states (I would presume) since if Amazons payments to Hubpages are based on sales worth they would be covered by the nexus tax laws.
Whether or not it will come to that is a different thing, but Amazon is not going to pay tax on all sales to one state just for Hubpages.
Maybe Amazon could pay Hubpages a monthly fee and Hubpages could distribute sales based earnings to hubbers, but that stinks of tax evasion and probably wouldn't work out too well either.
Amazon will no longer have to track the accounts of all the HubPages site users nor manage their payouts. All that work just got passed on to HubPages. On their end instead of dealing with hundreds of thousands of clients, they've now just got one.
Hubpages would always have been in he highest tier. It would be nearly impossible to not reach it with 40% of all the content on this site.
When the forced change occurs we will all be serfs/ sub-affs of HubPages, using tracking ids that HP generates under their account.
I would agree with Relache .. Amazon will no longer have to deal with reg/tax/payment for thousands of users and only have to admin the single HP account.
I would expect HP worked out some ironclad deal ... otherwise it could really suck if the amazon/cali deal fell through or changed in such a manner that Amazon decided to cut all cali affs again.
HP is in CA ..,,
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