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How Amazon’s ambitious new push for same-day delivery will destroy local retail

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Re: How Amazon’s ambitious new push for same-day delivery will destroy local retail

#71

Post by PaulHoule »

A general policy that "online stores pay sales tax" also benefits Amazon vs. small internet retailers.

A while ago I sold a few bumper stickers online and ended up using cafepress. I could have made a better profit by printing the stickers in bulk and mailing them to people, but I'd have to spend $100+ on paperwork just for the privilege of paying sales tax just in case I sell any to New Yorkers.

If small internet businesses had to pay taxes to the 40+ states that have sales tax plus to all the other jurisdictions (cites, counties, who knows what) in the U.S. it would be almost impossible to sell stuff and comply with the the law.

For AMZN the overhead is nothing.

Re: How Amazon’s ambitious new push for same-day delivery will destroy local retail

#73

Post by einhverfr »

PaulHoule wrote: post #71

A general policy that "online stores pay sales tax" also benefits Amazon vs. small internet retailers. A while ago I sold a few bumper stickers online and ended up using cafepress. I could have made a better profit by printing the stickers in bulk and mailing them to people, but I'd have to spend $100+ on paperwork just for the privilege of paying sales tax just in case I sell any to New Yorkers. If small internet bu…

Actually a general policy that "businesses that deliver things pay sales tax per jurisdiction that they deliver thins to" (the way "online stores pay sales tax" is implemented) benefits Amazon vs small local retail stores that deliver.

Where I usually live in the US, there are at least 6-7 tax jurisdictions within 20 min. by car. For businesses in Wenatchee that may deliver within an hour's radius, there are a very large number of tax jurisdictions. Most brick-and-mortar businesses ignore the rule and figure if they don't tell the state they are delivering things, they won't get looked at too closely, but it means they are in violation of the law.

Re: How Amazon’s ambitious new push for same-day delivery will destroy local retail

#74

Post by einhverfr »

suresk wrote: post #59
Caerus wrote: post #38

> Amazon has long enjoyed an unbeatable price advantage over its physical rivals. When I buy a $1,000 laptop from Wal-Mart, the company is required to collect local sales tax from me, so I pay almost $1,100 at checkout. This is such an over blown argument. Sure, Amazon is ~7% (where I live) cheaper than traditional stores due to sales tax. But that $1000 Wal-Mart laptop has a $900 sticker price on Amazon, and most no…

Indeed, when you look at surveys that ask people why they prefer shopping online, things like "24/7 convenience", "saves time", and "better selection" usually end up ahead of "costs less money, even after shipping" and taxes are usually a small part of that. The lack of sales tax hurts local tax entities far worse than it hurts Amazon's competitors.

>The lack of sales tax hurts local tax entities far worse than it hurts Amazon's competitors.

Except that proposals to collect online sales tax would hurt local retailers even worse if they followed the law.

Re: How Amazon’s ambitious new push for same-day delivery will destroy local retail

#75

Post by muhfuhkuh »

Caerus wrote: post #66
dinkumthinkum wrote: post #56

Earlier quoted context omitted.

But you're picking a fairly non-representative product for this issue. I doubt any of us are going to be buy a laptop from Walmart, looking at their stock, I don't think many other people are either. They have a couple but this is not their bread and butter (which actually is their bread and butter).

I only picked that because it was the example in the article. Looking at my recent Amazon purchases: Amazon: Oxo Coasters $9.99 for 8 Walmart: Comparable set, Silicon Coasters $30 for 6 Amazon: DVD Rack $29.99 Walmart: Comparable model from same company, $39.00 Amazon: American Crew Pomade, $21.49 for 2 Walmart: $16.98 for 1 Amazon: 13 Watt CFL, $15.98 for 8 Walmart: Same model, $16.88 for 4 Those were the first 4 it…

In almost no category that I've sampled has Walmart ever been the absolute rock-bottom cheapest compared to several places (Big Lots, Dollar General, local grocery chains, Amazon... even Target, believe it or not). People, however, can't go to Amazon to get infant formula, a car battery, ammunition, and a jar of pickles at 1AM and have it in hand immediately.

Walmart used to be about "made in the USA", then it was "always low prices", now it's about "live better". It's Walmart's ubiquity, convenience, and momentum that keeps them dominant (and their ability to loss-leader competitors out of business).

Re: How Amazon’s ambitious new push for same-day delivery will destroy local retail

#76

Post by AncientPC »

wheels wrote: post #54

Amazon has been doing this in parts of Germany since 2009. The results haven't been nearly as dramatic as the article predicts. As others have indicated, the limiting factor isn't so much speed of delivery as the inclination to physically inspect items before buying them. That said, Zappos, now a part of Amazon, has succeeded in doing that in one of the markets that tends the most towards such. Even so, there are sti…

I suspect this is a uniquely American thing.

Similar to Dell's failed entrance into Asia, Americans are uniquely content with purchasing plenty of merchandise without ever physically examining the product.

Re: How Amazon’s ambitious new push for same-day delivery will destroy local retail

#77

Post by robryan »

wheels wrote: post #54

Amazon has been doing this in parts of Germany since 2009. The results haven't been nearly as dramatic as the article predicts. As others have indicated, the limiting factor isn't so much speed of delivery as the inclination to physically inspect items before buying them. That said, Zappos, now a part of Amazon, has succeeded in doing that in one of the markets that tends the most towards such. Even so, there are sti…

I expect to eventually see big retail outlets where there is only stock for trying things out. No buying at the store but you could complete your online order while at the store and have it same day/ next day.

Re: How Amazon’s ambitious new push for same-day delivery will destroy local retail

#78

Post by mathattack »

PaulHoule wrote: post #71

A general policy that "online stores pay sales tax" also benefits Amazon vs. small internet retailers. A while ago I sold a few bumper stickers online and ended up using cafepress. I could have made a better profit by printing the stickers in bulk and mailing them to people, but I'd have to spend $100+ on paperwork just for the privilege of paying sales tax just in case I sell any to New Yorkers. If small internet bu…

You're very right on all of this. Amazon is a tough competitor in any environment.

Re: How Amazon’s ambitious new push for same-day delivery will destroy local retail

#79

Post by mathattack »

Caerus wrote: post #38

> Amazon has long enjoyed an unbeatable price advantage over its physical rivals. When I buy a $1,000 laptop from Wal-Mart, the company is required to collect local sales tax from me, so I pay almost $1,100 at checkout. This is such an over blown argument. Sure, Amazon is ~7% (where I live) cheaper than traditional stores due to sales tax. But that $1000 Wal-Mart laptop has a $900 sticker price on Amazon, and most no…

In retail, 7% is usually higher than gross margins.

Re: How Amazon’s ambitious new push for same-day delivery will destroy local retail

#80

Post by lliiffee »

ck2 wrote: post #63

What this is going to do is punish people in non-metro areas. The way that happens is the same way supermarkets work. In very competitive areas, cut rate prices, coupons and promos like doubling, etc. are offered very liberally. To make up for that profit loss, they pump up the prices and cut out promotions in areas where there is little to no competition. In areas with a walmart and target and now amazon local deliv…

There is no reason to think that prices elsewhere will get worse. If they could get away with charging higher prices in non-metro areas now, they would do it already. It is likely, however, that non-metro areas will fail to see the price lowering that other areas do.
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