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Amazon reminds us of N.C. retailers of years ago

Jerry Epperson -- Furniture Today, January 9, 2012

Jerry EppersonOne of the ongoing discussions among many retailers is how unfair it is that online retailers do not have to collect out-of-state sales taxes. It is clearly a financial advantage, and contemporary consumers know it and take advantage. Both Best Buy and Wal-Mart have mentioned that Amazon.com is one of their largest competitors, partly for this reason.
     This reminds many in the furniture industry of the anger some North Carolina furniture retailers created when they refused to collect out-of-state sales taxes years ago while shipping to customers across the country.
     Among those resisting the pressure to make Internet retailers collect taxes has been the largest, Amazon.com, until November. In a dramatic reversal that month, Amazon.com began expressing support for federal proposals to make online retailers collect state and local sales taxes.
     Why? No one outside of Amazon knows, but perhaps with its size, buying power, breadth of product, logistical strengths and other factors, it can more easily absorb and collect these sales taxes than their smaller online competitors. Having to add and process these additional taxes is a chore to all retailers, and is often more of a burden to smaller ones.
     Small brick and mortar stores applauded this move by Amazon and considered it a victory of sorts.
     Then Amazon dropped the other shoe. On Dec. 10, Amazon promoted a new Price Check mobile phone app. This allows in-store shoppers to either scan or snap a photo of an item and immediately compare prices with Amazon.
     Amazon once again climbed to the top of the enemy list as retailers everywhere now screamed that Amazon is using their stores as its showroom! (Again, does this remind you of the North Carolina retailers years ago?)
     Historically, our industry has used "exclusives" to sell to a single retailer in a territory, but that may no longer hold true in an age of retailers anywhere shipping everywhere. Further, this could work to be a disadvantage to branded products, except for some single-branded stores that offer a consistent price nationally in stores and online.
     Getting to the point, you had better start selling services, features and benefits because price comparisons are going to get even more challenging.

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