Sunday, October 6, 2013

Could an extra 6% beat Amazon?


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. 


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