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You gotta affiliate to accumulate

Up until recently, Australia’s enthusiast photo media was going broke slowly relying on advertising support from local photo equipment distributors and specialist retailers. Now there’s a new model out there and, to use one of those fuzzy, all-purpose au courant weasel words, ‘it’s problematic’.

The new-to-Australia way for online photo specialist publishers to generate revenue is the ‘affiliate model’. Publishers get a kickback commission every time a sale is made from an affiliate link on their sites. Here at Inside Imaging we were surprised to be invited to join Adorama’s Affiliate Program earlier this year after we published a story on the Matterport camera system for 3D images for real estate listings, virtual open houses, etc.

Even though there is a local distributor, Adorama emailed us stating it was exclusively offering the Matterport Pro 2 camera and ‘we would like to work with you to share this Adorama exclusive camera. Additionally, would you be interested in joining Adorama’s affiliate program?  Adorama offers a percentage back in return for every product bought from a customer referred from your link. I’m sure you are well aware of affiliate-type programs and recognize the benefits for both parties.’

While it’s flattering to be considered, we really couldn’t see how directing our Australian readers to the US to purchase camera gear when we are part of the Australian photo industry – wait for it – ‘ecosystem’, could be a good idea. And besides, the 2 percent commission on offer, and our ‘quality not quantity’ subscriber base, would see us going broke even faster than we are currently!

But when UK-based specialist magazine/web publisher Future Publishing acquired venerable specialist titles Australian Camera and ProPhoto, plus a few others, from Next Media last August, it shortly after introduced the affiliate model to Australia – along with a few teething problems – as it launched an Australian version of its flagship photo enthusiast website, Digital Camera World.

The following is in no way meant to criticise a fellow publisher – it’s great to have the gene pool refreshed and a dynamic new publishing house in Australia – but simply to flag a new business model in local online publishing with some possible unintended consequences which local resellers, distributors and camera buyers  should be aware of:

Future Publishing is an international affiliate partner of both Adorama and Amazon, as well as some local retailers such as CameraPro. Here’s an example of how the affiliate model can be tricky when publishers operate across different markets: Earlier this week the Australian version of Digital Camera World –  https://www.digitalcameraworld.com/au – ran what you might call advertorial in the News section on a super-duper deal for the Olympus OM-D E-M10 – available with zoom lens for a crazy price of $314.95 (pictured right).

When you clicked on the link you arrived at…Adorama! Here’s where it gets confusing: Even though the price was advertised as $314, it was actually US$314 – or $457 in the legal tender we use in Australia. Unlike some international retailers, Adorama doesn’t have an website app to convert prices into the local currency of those browsing its site. It’s not clear that this is the case until you get to the checkout and get a nasty surprise. Digital Camera World points out that when you click to the story/advertorial, the fact that it is a US deal is clearly indicated.

‘On the Olympus article you’ve flagged, there are a couple of indications that this is a US deal from a US retailer (and so intended primarily for US readers) – the deal box has text that highlights it is a “US offer”,’ Neville Daniels, Future’s managing director, APAC, told Inside Imaging. ‘We do that with four offers on the same camera from Australian retailers, each clearly marked with AU$ prices (see right).

‘We are making some further amendments to improve clarity, however, such as including rough AUD pricing conversions next to any pricing in USD. As demonstrated in the screenshot our policy is to prefix all mentions of AUD prices (either in deals, reviews or news articles) with AU$ to distinguish from USD pricing.  Your feedback is helpful and we will give further thought to how we make the distinctions really clear.’

He added: ‘I also wanted to mention we generally publish one or two dedicated Australian deals…each week, as well as populating buying guides with Australian price / retailer info.’

The other messy issue is affiliation with businesses that are transgressing Australian tax law by blatantly not collecting GST. Like Adorama. It beggars belief that a massive retailer like Adorama (would it be the second largest camera retailer in the world after B&H?) has not come to the attention of the ATO, given the introduction of GST on low value imports from offshore retailers was introduced two years ago.

If the Australian photographic industry had a robust industry association, perhaps this would have been on the ATO’s action list earlier than this week, when we brought it to their attention.

But Adorama ain’t Robinson Crusoe. More than one online retailer which appears regularly in the kind of Best Deals listings like the one above, operate a scam whereby they claim to have some kind of local presence but inevitably and permanently are out of stock locally, and so always ship product from Hong Kong. They either claim the GST is included in the price but don’t provide tax invoices, or say GST is the purchaser’s responsibility (which it indeed is, but only when buying products over $1000). These operations are clearly gaming the system. It would be a great benefit to the local industry if websites like Digital Camera World Australia, whose business model revolves around selling gear and providing accompanying price matching services, could identify and blacklist these bottom feeders from their Best Deals listings. I’m pretty sure their genuine Australian affiliates would be grateful.

While Amazon and Ebay do largely comply with the new laws requiring them to collect GST on sales, the shonky back street boys from HK and elsewhere simply tell the electronic distribution platforms they are operating an Australian business – they may even have an ABN – and suddenly they have an extra 10 percent margin to play with: the GST they aren’t charging.

As for the Adorama situation, well surely it’s up to the ATO to get that one sorted – it’s not something one would expect Digital Camera World to be able to do anything about.

This affiliate advertising business model is going to grow, as online publishers seek out ways to survive and maybe even prosper. Spending on social media and me-too ‘Ambassador programs’ have sucked up the ad budgets online publishers need to continue to write the independent product news and reviews, which help sell the cameras and lenses, which keep the whole shebang going. Some might say some of the distributors – Canon, for instance – are basically freeloading. So affiliate programs will fill the hole left by the lack of support from traditional advertisers.

The giant CNet consumer tech website recently launched a dedicated CNet Australia site, with a shedload of affiliate advertising links. Unfortunately, some of these go either direct, or via Amazon or Ebay, to the bottom feeders  – or to Adorama!

(Check the ATO’s response to a series of questions we put to them on GST on low value goods here.)

 

 

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