Have you ever made a purchase on Amazon.com ? I have! My purchases include various school books, a flat iron and a couple of iphone cases. Well, I am not a frequent buyer per se but I am a loyal buyer when it comes to school season. Books listed on Amazon have discounts that range up to 90% in used books, 80% in e-books and 70% in rentals. Not bad huh?
In case you haven't heard Rick Scott is celebrating a deal to open an Amazon.com operations center in the Sunshine State by 2016. The good news is the new 3,000 jobs this will generate. The not so good news is Floridians will have to start paying sales tax on all Amazon purchases. Previously, Florida residents could shop Amazon without having to pay 6 percent tax on purchases thanks to a 1992 U.S. Supreme Court ruling that an Internet company would be forced to collect sales tax only in states in which they have a physical presence. If you are not familiar with the subject here is great video to get informed:
With all the commotion going around online sales tax it makes me wonder, how
big of a hit will this be on consumers around Florida? Personally, I
would not mind paying $84.80 on a book I now pay $80 for. It sure beats the
$150 bookstore price. But what about other kinds of Amazon.com customers.
Some
Floridians could be buying items like a $10,760 Medusa Ring on Amazon.com. A 6% sales tax changes the ring price to
$11,405.60. Adding an extra $645.60 that Im not sure everyone is
willing to pay. Amazon should take in consideration it customer's trends. If
around the months of August and September there is an increase on book
purchases then a strategy should be placed to work on customer retention around
those months. Specially for the first year, you dont want an extra $8-$10
scaring your customers away. I am curious as to how Amazon will act towards the
online sales tax in Florida. Maybe next year we will all receive an extra %20
off towards our book purchases. For now we just wait and see.
Yes, this tax increase will have a big impact on Amazon buyers that purchase over $1000 with one transaction. However, you should also look at the total of all our online purchases at the end of the year. If its a 6% tax it will still add up for frequent shoppers. Lets use college students at FIU as an example; If we as students buy on an average $120 per book buying 5 book per semester ($600). With a 6% tax we now pay $127.20 per book totaling $636 per semester for books. Okay $36 might not be much but how much cool things can you buy on Amazon? If an Iphone case is only $2 bucks we are missing out on 18 cool cases per year. So in the long run frequent buyers will be effected by this online taxing.
ReplyDeleteI understand your point in regards how frequent buyers are affected. But Amazon will survive, the taxes are just making their business fair in comparison to other retailers. Amazons prices will still be cheaper, remember they don't have to pay for real estate, employees, and all the other overhead regular retailers do. Perhaps the prices will not be as aggressive but can still be lower prices than other stores. Plus let's remember, that for some of us, the fact that the item is shipped instead of having to go and buy it, it's an advantage.
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