Why SHOULD Amazon have to pay sales taxes in states they don't operate?

[abaez]

And local businesses have the advantage of not having to ship, providing face to face customer service, and actually being local and having the ability for a customer to get something immediately. Something online retailers don't have.

 

[Craig234]

And local businesses have the advantage of not having to ship, providing face to face customer service, and actually being local and having the ability for a customer to get something immediately. Something online retailers don't have.

They have to ship - to the store - face to face is an expense. They can immediately supply the product, but it's a small minority customers pay more for that. Inventory is a cost.

 

[woolfe9999]

They have to ship - to the store - face to face is an expense. They can immediately supply the product, but it's a small minority customers pay more for that. Inventory is a cost.

It's more peace of mind if the product turns out to be defective or undesired. It can be returned and/or exchanged much more quickly or easily. Also, some people remain concerned about using their credit cards online. These advantages could overcome some degree of price difference but not too much, which is why the taxing situation needs to be equalized.

My personal tolerance point is about 15%. That's how much more I'll pay to buy something B&M. Add 10% sales tax to B&M, and the fact that I can usually get free shipping online, and they can't even compete using sale prices.

 

[Sephire]

Just like that millions of dollars of tax revenue gone.

Good job California!

 

[PingviN]

They have to ship - to the store - face to face is an expense. They can immediately supply the product, but it's a small minority customers pay more for that. Inventory is a cost.

Inventory is definitely not a cost. Inventory, unless if impossible to sell (broken our seriously outdated), should be seen as an asset.

 

[3chordcharlie]

Inventory is definitely not a cost. Inventory, unless if impossible to sell (broken our seriously outdated), should be seen as an asset.

Inventory is absolutely a cost when you start thinking 'how much inventory is ideal to balance cash-flow and ensure consistent product availability on my shelves'.

When you do not have inventory, but simply order from wholesale today what you sell at retail today, you save a lot of financing (but normally can't deliver the product at the time and point of sale).

 

[PingviN]

Inventory is absolutely a cost when you start thinking 'how much inventory is ideal to balance cash-flow and ensure consistent product availability on my shelves'.

When you do not have inventory, but simply order from wholesale today what you sell at retail today, you save a lot of financing (but normally can't deliver the product at the time and point of sale).

Keeping inventory is, in economics, not a cost. A cost is what you get when a resource is spent, inventory is not spent. The costs come to existence if you have to throw away your inventory (because it can't be sold) or if you are forced to sell at a price not covering the cost of manufacturing/purchasing/shipping/storage the product.

 

[3chordcharlie]

Keeping inventory is, in economics, not a cost. A cost is what you get when a resource is spent, inventory is not spent. The costs come to existence if you have to throw away your inventory (because it can't be sold) or if you are forced to sell at a price not covering the cost of manufacturing/purchasing/shipping/storage the product.

Keeping inventory is a cost - the cost being the price of the money you have tied up in inventory. The easiest way to see this is to pretend that you have purchased your entire inventory with borrowed money (whether you did or not).

 

[Tom]

Sales tax is paid by the consumer, therefore where the consumer lives determines that it should be paid to support government services where THEY live. Whether the merchant has a presence or not shouldn't matter, to be fair.

But like a lot of people, I enjoy the savings of buying stuff and not paying the sales tax, but it's not really fair to the business that do have to collect sales tax.

 

[PingviN]

Keeping inventory is a cost - the cost being the price of the money you have tied up in inventory. The easiest way to see this is to pretend that you have purchased your entire inventory with borrowed money (whether you did or not).

It's not a cost until the resources are spent. Up until the day you sell or throw your inventory away, there is no cost. You've payed for it, yes, but there is no cost (until spent).

 

[3chordcharlie]

It's not a cost until the resources are spent. Up until the day you sell or throw your inventory away, there is no cost. You've payed for it, yes, but there is no cost (until spent).

You must be hung over, you can't be this thick.

 

[PingviN]

You must be hung over, you can't be this thick.

You must've never have taken a class in economics if you keep on insisting inventory is a cost.

 

[Craig234]

Inventory is definitely not a cost. Inventory, unless if impossible to sell (broken our seriously outdated), should be seen as an asset.

You don't seem to understand the difference between English and some accounting convention, so let's try English again.

Best Buy stores 3 of a washing machine at each of its stores around the country. This costs storage at higher *retail* real estate prices, and is inefficient by storing more than are needed at many locations to have them immediately available for sale at each store, while only some places will sell them anytime soon.

Amazon stores a fraction as many washing machines at one (or a few regional) central warehouses, from where they're shipped when ordered, at cheap real estate prices.

This costs Best Buy a lot more money, paying for higher costs to store more units locally around the country for customer convenience.

Amazon might not even story any, just forwarding orders to the manufacturer, in theory.

 

[ProfJohn]

Inventory is a cost.

In economic terms it may be an asset, but in terms of operating a business it is a cost.

BestBuy has 1000 stores which means that have to have at least 1000 models of each TV they sell if they want to keep it in stock and sellable. That costs a LOT of money.

Amazon though only has to have a few dozen or perhaps a 100 of that model since they only have a few warehouses.

That makes operating a BestBuy a far more capital intense business and makes it harder for them to adjust to business trends on the fly.

If 3d went dead tomorrow Amazon might have a couple thousand on hand they would have to sell at a loss. BestBuy would probably have tens of thousands of them.

 

[BoomerD]

Inventory is a cost.

In economic terms it may be an asset, but in terms of operating a business it is a cost.

BestBuy has 1000 stores which means that have to have at least 1000 models of each TV they sell if they want to keep it in stock and sellable. That costs a LOT of money.

Amazon though only has to have a few dozen or perhaps a 100 of that model since they only have a few warehouses.

That makes operating a BestBuy a far more capital intense business and makes it harder for them to adjust to business trends on the fly.

If 3d went dead tomorrow Amazon might have a couple thousand on hand they would have to sell at a loss. BestBuy would probably have tens of thousands of them.

Not likely. Like Wal-Mart and most other large retailers...including NewEgg and Amazon, Best Buy is a believer in "Just in Time inventory":
http://www.accountingformanagement.com/just_in_time.htm

While BB would have to dump SOME inventory, it wouldn't be as bad as you think. Yes, they probably have more warehouses to keep stock for their regional stores, but they don't buy 10's of thousands of each item just to have it sit around...they buy what they predict they'll need for the immediate future, then re-order once that inventory gets reduced to a pre-determined level.

 

[3chordcharlie]

You must've never have taken a class in economics if you keep on insisting inventory is a cost.

Do you feel like you are banging your head against a wall? Perhaps this is because you are wrong, and are the only one who doesn't see that.

The product in your warehouse is an asset. Having it there is a cost. A real, calculable cost.

Also, you would be talking about business courses, not economics courses.

That is all.

 

[Craig234]

Not likely. Like Wal-Mart and most other large retailers...including NewEgg and Amazon, Best Buy is a believer in "Just in Time inventory":
http://www.accountingformanagement.com/just_in_time.htm

While BB would have to dump SOME inventory, it wouldn't be as bad as you think. Yes, they probably have more warehouses to keep stock for their regional stores, but they don't buy 10's of thousands of each item just to have it sit around...they buy what they predict they'll need for the immediate future, then re-order once that inventory gets reduced to a pre-determined level.

Retailers still have far more expensive inventory costs than warehouses.

 

[ProfJohn]

Not likely. Like Wal-Mart and most other large retailers...including NewEgg and Amazon, Best Buy is a believer in "Just in Time inventory":
http://www.accountingformanagement.com/just_in_time.htm

While BB would have to dump SOME inventory, it wouldn't be as bad as you think. Yes, they probably have more warehouses to keep stock for their regional stores, but they don't buy 10's of thousands of each item just to have it sit around...they buy what they predict they'll need for the immediate future, then re-order once that inventory gets reduced to a pre-determined level.

I didn't mean each item. I meant ALL 3d TVs put together.

And even with on time delivery they still have to have one of each item per store (normally) so that means tons more inventory than Amazon who may have a few dozen spread out across the country vs. BB's 1000+