Amazon Associates – Handling US Withholding Tax Requirements for International Kindle Publishers

We publish and sell Kindle books on Amazon and since we live and work in Australia, we have to deal with withholding tax issues.  This has always been confusing for us and still is to be quite honest, but until recently we have never had to pay withholding tax. We would just complete the W-8 form and just state we didn’t live or work, or hold a business entity in the US, post it in to Amazon and that would be it.

However, when our latest cheque came through from Kindle, we noticed that they had taken out 30% of the earnings. When we went and checked the last 4 cheques, we realized that yes, they had been withholding some of our money and we just hadn’t noticed before. At this point, we felt it was time to investigate this properly and figure out what we needed to do. So the following information is based on what we did.

DISCLAIMER: Bear in mind, that this is just what we did and may not apply to you. Each country is different and each individual is different…PLUS, we aren’t experts in tax laws by any means…so make sure you do your research first to make sure you are doing the right thing.

Step 1: Get an EIN or ITIN

This part wasn’t very clear for us. We kept reading on forums that you needed to get an Individual Tax Identification Number (ITIN). Since we are a partnership, we didn’t think this applied to us. Eventually we found out that  we needed an Employer Identification Number (EIN).

So if you are an individual you will need to complete Form W-7.

If you are a business of some sort, your will need to complete Form SS-4. And yes I know it does say Employer Identification Number (and we don’t employ anyone) but it is the correct one…at least it was for us.

As far as I can tell, the W-7 form needs to be mailed in. The SS-4 can also be mailed in, but it is so much easier just to ring them (+1 267 941 1099). We used Skype for this because it isn’t a toll free number and would have been quite expensive otherwise. The whole process was extremely easy. Make sure you have the SS-4 form in front of you already completed so you can answer their questions promptly. They will give you the EIN immediately once completed and will send out documentation in the mail.

Step 2: Complete the online form in your Kindle KDP account

Once you have your EIN or ITIN, you will need to login to your KDP account and complete the Tax Information section. This can be found by clicking your Account at very top right of the screen.

Amazon KDP Account Details

When it came to the part where it asked if we wanted to claim treaty benefits we ticked YES. We had always selected NO at this point and it wasn’t until we researched this that we realized that YES was the correct response. It will ask you to enter your ITIN/EIN and once done it will tell you what the amount of withholding tax will be.  Once that is completed a message will appear stating that your information has been submitted and will be reviewed by the IRS. At that point, you will not be able to make any changes so ensure you have entered the correct information to begin with.


Amazon KDP Tax InformationOur next step is to claim back the withholding tax, which we can apparently do. We are still researching that and I will update this post if we ever figure out how it’s done.

Our Best Amazon Day for November 2011

Over the past couple of years we have made it a habit to reveal our income for our November-December Amazon sales but as many of our regular readers know we decided to no longer do that for various reasons. (You can read the reasons why here). However, we know that hearing about others successes is a real motivator – it helped us in the early days when we first ventured into this business and were trying to make a living from it – so we thought we might tell you about our best day on Amazon for November and a little about how December is going for us.

We mentioned in one of our recent newsletters that we saw a slow start to November for Amazon sales. Last year it took off with a bang and didn’t stop until well after Christmas. This year it looks as though a lot of people are struggling with the current economy in the US and were waiting for the sales to start in order to get a bargain.

Fortunately, however, we did see things start to pick up around mid November and we have had some record days for both earnings and orders.

Our biggest day overall for November was Cyber Monday which was surprising as I was expecting that Black Friday would have been a better day. As you can see from the stats below we did actually get more clicks on Black Friday than we did for Cyber Monday but the Cyber Monday shoppers were a little more keen to shop I guess, resulting in 263 orders for that day.

Our earnings for Cyber Monday were a little over $1000.

December so far has been going great…it always does much better than November. Our best day so far was a couple of days ago with earnings of just over $1500.

We’d love to be making over $1000 a day on a permanent basis from Amazon. It is doable of course….there’s no limit to what you can make from affiliate marketing. We just have to make it our goal for next year.

Our Year in Review

This year has been an interesting one for the both of us with a few different personal issues taking up a bit of our time particularly for Wanda. Fortunately this business allows us to take time out whenever we need or want to. This is one of the biggest benefits for making a living online – in my opinion the freedom you get is worth much more than the money.

We’ve also been caught up in a lot of different projects this year taking us away from our Amazon sites. We keep coming back to them and then for some reason get dragged away to something else. Not sure why that is because we are all for staying focused.

Our problem I think is that we want to diversify but in doing so we go back to working like we did when we first started out. In other words, we work on too many things at the one time and don’t focus enough. In a way, it has been good for us to do that as I think we needed a break from the Amazon sites. It can get a bit much doing the same things year after year so having a bit of project diversity has been fun. But if we are going to keep working on diversifying we need to focus on one thing at a time. We all know how easy that is right?? ;-)

We’re both looking forward to next year. We love this business and can’t wait to see what next year will bring. Let’s all hope that the economy picks up and we all have a happy and prosperous new year.

My Method for Getting Traffic Quickly

This is a guest post by Ellen C Braun

After following Wanda and Paula’s advice about how to write a product review from the Amazonian Profit Plan, I spent about three full days creating my review page. The word count hovered a bit over 3,000, there were lists of bullet points, and a compilation of the product’s pros and cons. I drove to a local store that carried the product I’d reviewed and took detailed photos from every angle, which I used throughout the review. This gave my product review an edge above standard reviews that simply use the stock photo of the item from Amazon or the manufacturer.

My product review was friendly and informative, and I knew that it was really good. However, after all that work, I had many days of the week pass by with that dreaded “There is no activity for this period” message from within my Amazon dashboard as I logged in each morning to check on yesterday’s stats. There is nothing quite as depressing as seeing that the prior day had been a zero-sale day! Thankfully, I did not give up. In fact, as of this writing, I think it’s been over four months since I’ve had a day without any Amazon sales at all!

The key to my success, I knew, was to get traffic to my wonderful product review. And the key to traffic was going to be keyword research.

The first thing I did was attempt to optimize my page for ‘product name’. Let’s call the page “Square Widgets Review”. I spent a nice chunk of time and money creating a variety of backlinks with the anchor text “square widgets” pointing to my review page. After several weeks, I was glad to see that I was in position #5 in Google, with the first four positions all taken by the widget manufacturing company. That company had a strong website, and I was unsure if I would be able to outrank them for the name of their popular product. Additionally, there were often Adwords ads at the top of the SERP’s, so that my #5 position in Google that I’d worked so hard to attain was below the fold! In fact, although “square widgets” showed 9,000 exact monthly searches, due to these factors, my page received only about 2 or 3 daily visitors from that keyword! Trying to make a living from a handful of visitors was not going to work, so it was time to rethink my keyword strategy.

I noticed that a lot of people had questions about the differences between two of the most popular models of widgets, let’s call them the square widget and the rectangular widget. These two models were very similar, so potential buyers wondered about what the differences were and which was better. So I decided to be helpful to the end user and create a page called “square widgets vs rectangular widgets”. I pointed a handful of backlinks at this new page, and within four or five days my new page was the #1 position in Google for the keyword “square widgets vs rectangular widgets” which Google’s tool showed to have 400 exact monthly searches! My website got about ten daily visitors from the keyword “square widgets vs rectangular widgets” and my traffic was also increasing for similar keywords like: “What is the difference between the square and rectangular widget?”

Then I noticed that there was another company that sold something very similar to widgets, let’s call them blidgets. I created a page called “widgets vs blidgets” and once again started getting a nice amount of daily visitors to my page from that exact keyword. There was one very high end widget that we’ll call the Platinum Widget. It was the highest priced widget that existed, and I noticed people commenting on my site, “Do you think the Platinum Widget is worth the money?” So I created a page whose title was that exact question, and on the page I outlined the benefits of the Platinum Widget while also reminding users that the standard widgets could serve them nearly as well. Of course, I included lots of detailed photos, all of which I linked to the product page on Amazon.

The point of this article is to take a step back from your keyword research and look for obscure questions that people are likely to have about your product. Create a page focused on that question, and point a few backlinks to that page. When people type their questions into Google, your page is very likely to rank high up there in the SERP’s very quickly because your page title matches the visitor’s query exactly, or nearly exactly, and there is probably no competition for this type of long tail keyword!

Put yourself into your potential buyer’s shoes and think about questions that he or she might have about the product. Are there similar products on the market; would she want to understand the differences between the various models? Read the reviews of the product on Amazon to get ideas about the types of questions people are likely to have about your particular product.

The people who are researching the differences between two different model numbers are very likely to be people who have their wallet nearby and ready to hit that BUY button through your affiliate link! Although there might not be a lot of traffic for ‘this widget vs that widget’ terms, the traffic that does come to your site from these kinds of keywords are highly motivated to buy the item, rather than just being serial researchers! And those are the types of people who make our Amazon accounts say that lovely sound: KA-CHING!

Ellen Braun is a stay at home mother of three and affiliate marketer. She recently started offering Amazon affiliate marketing coaching services within a membership forum on her new site She looks forward to working with you! Below is her August Amazon screenshot. What is noteworthy is that she spent a lot of August abroad on vacation – here’s to the power of passive affiliate marketing!

What Happens When Amazon Dumps You OR How to Diversify

Amazon seem to be sticking to their guns with their latest California update. For those that aren’t aware of the changes, recent tax laws have resulted in Amazon terminating the Amazon affiliate accounts for those affiliates residing in California.

UPDATE TO THIS POST – OCT 2011 – Amazon have re-opened their associates program for California affiliates. See the following quote from Amazon:

California Governor Jerry Brown recently signed legislation repealing the law that had forced us to close the program to California residents. We are pleased to invite all California Associates whose accounts were closed due to the prior legislation to re-enroll in the Program. Associates who re-enroll will retain all prior account settings (login, Associates ID, payment information, etc.).

This isn’t the first state to have their accounts terminated. So far residents in Colorado, Illinois, North Carolina and Rhode Island are also no longer able to to participate in the Amazon Associates Program.

For those living in the states that have been affected by the tax laws here a few suggestions. First of all, we can’t give you any specific legal advice but there have been many who have opened up companies in other states…legally. So you might want to login to your Amazon affiliate account and go to the Discussion Boards to see what others are saying about that. There is certainly a lot of discussion going on in there and lots of suggestions.

Now I’m not going to go into the good and bad of these tax laws and whether or not Amazon is going about things in the right way or not but what I am going to do is go through a number of alternatives that you can use other than Amazon. And this is not just for those who can’t use Amazon.

Even for the rest of us that are still able to use Amazon it is worthwhile diversifying a little and trying new merchants. Of course Amazon converts extremely well but in some cases you might have a nice little niche that will work just as well with a very niche merchant. And some of your readers might prefer buying from a very niche merchant who can answer specific questions and who knows their product in detail. So if for some reason Amazon isn’t converting well for you and you do have a very specific niche then you might want to try some of the networks listed below to look for a merchant who heavily targets your niche.

So, if you are looking for alternatives to using Amazon then we can suggest the following. We use all of these affiliate networks on various websites and are all free to join.

1. Commission Junction

Commission Junction (aka CJ) has been around for a long while now. They were were the first network we signed up with when we started in this business. CJ has hundreds if not thousands of different merchants so you are sure to find a one to suit your niche. You will need to get approval for each merchant that you apply to. Some will give automatic approval as soon as you sign up with them and others will want to manually approve you. Don’t be offended if they don’t approve you. There are plenty of different reasons why you may not get approved – just email the merchant and ask if you really want to know. We don’t always get approved.

Look for when you get there as they are very similar to Amazon with a lot of diverse products.

Each merchant in CJ has different commission rates and requirements so make sure you read the terms for each merchant before signing up with them.

CJ is easy to work with once you get the hang of it and they have a ton of product, text and banner links although this is dependent on the individual merchant of course.

The only downside with CJ is that they don’t offer a deep linking tool to enable linking to any page on a merchants site like some of the other merchant networks. If it is offered it is only on a merchant by merchant basis and most merchants we have found don’t provide the service. However, this is not a huge issue because most merchants in CJ provide links to just about all of their products anyway. This is what makes CJ one of the best merchant networks because there are thousands of product links available.

2. ShareaSale

ShareaSale are another merchant network with a lot of niche merchants. ShareaSale is a good network to work with and they allow deep linking for all their merchants plus a heap of other neat tools like widgets, videos and mini-store creatives.

Their ‘Make a Page’ tool is pretty cool allowing you to select a merchant and create a page of products in seconds. All you need to do is add the code to your site and the products appear. You can select how many products to display, and whether you want descriptions and prices to also display as well as a heap of other options. Here’s an example:

Once you have signed up to ShareaSale it’s a good idea to sign up with CSN Stores (soon to be known as Wayfair). CSN are a network of very niche type online stores and we use them on a number of our sites.

3. LinkShare

Linkshare has been around for a while now and has a lot of merchants but we’re not too fussed on their reporting interface. It started out kind of confusing so we didn’t use them too much. However they have improved over time although the reporting side is still clunky to work with. You are given a site id for each website, which is fine but all records and reports are held under those seperate site id’s so you have to spend time going into each website report individually, there isn’t an overview of all your sites reports. If you only have a couple of sites then this won’t be an issue but, if  you are like most of us and have way too many sites then this does become an issue If I was starting out with them now, I would only register one site and consolidate all the merchant links under that site.

They do have a lot of merchants to choose from so are well worth a look. Once you are in the link building phase LinkShare is easy to use and getting links is no problem. They also have deep linking which is really easy to use and the merchants also provide plenty of products, text links and banners for you can directly link to.

4. Google Affiliate Network

Google of course has to be in on everything so they bought out a private affiliate network and made it all their own. The Google Affiliate Network isn’t too bad but it’s a bit clunky considering this is Google we are talking about. You would expect it to be a top notch system  but in our opinion, it’s not. However, they do have some of the bigger merchants like KMart and Target for instance.

5. Pepperjam

Wanda reckons that Pepperjam is her favorite. She is the one who spends the majority of the time on our niche sites so she would know. You can create mini-stores, deep links and tracking ids and it is very easy to use.

Each of these merchants make your life really easy when it comes to getting products onto your page. One thing you do need to watch is for when a product link has expired, this is not always obvious when you pick up the html from the merchant, and only some have the expiry date written somewhere so that you know it has expired.

There are plenty more but those are some of the best ones to start with. Let us know which ones you use in the comments field below.