backtop


Print 15 comment(s) - last by Jaybus.. on Jan 21 at 4:16 PM


  (Source: wallsfeed.com)
Sellers in the state of California, where sales tax is collected, were down over Q4 2012

Research suggests that Amazon may have taken a sales hit over the holiday period after collecting sales tax in certain U.S. states.

While the real results of Amazon's online sales during the holiday season won't be revealed until January 29, e-commerce firm ChannelAdvisor has given a small glimpse at its research, which took a look at the sales figures of its clients (third-party sellers on Amazon) over the holiday period in California and compared it with other states where Amazon doesn't collect sales tax.

Amazon started collecting sales tax in Texas in July 2012, and California and Pennsylvania in September 2012.

In California, specifically, Amazon started collecting a sales tax of 7.25 percent to 9.75 percent. ChannelAdvisor found that its client's sales on Amazon before sales tax collection in California was 5 to 10 percent above other states. The week before the e-tailer began collecting taxes, sales jumped 70 percent compared to other states.

After the sales tax collection began, sales in California matched those of other states. In early November 2012, California sales fell 10 percent below sales in other states.

The busy period of the holiday season, which is late November and early December, saw lower Amazon sales in California compared to other states as well, although ChannelAdvisor didn't provide exact numbers. However, at the end of the holiday season, sales came back up a bit.

According to Thomas Reuters I/B/E/S, Amazon is expected to report a revenue of $22.3 billion at 52 cents a share for Q4 2012.

While Amazon sellers saw a drop after tax collection, Best Buy was reaping the benefits. In California, Pennsylvania and Texas, Best Buy's online sales jumped 4 to 6 percent over the holiday season compared to other states. It also saw a 6 to 9 percent increase in online orders that are picked up in-store within those states.

Amazon fought a long, hard battle against several U.S. states back when it didn't collect sales tax (except in Kansas, Kentucky, New York, North Dakota and Washington). The e-tailer fled many states that attempted to force tax collection on the company, such as California and Illinois. Amazon has said that it does not have to collect sales tax because of a 1992 Supreme Court decision that excuses Amazon and other remote sellers from having to collect taxes in U.S. states that do not have the company's employees or warehouses operating within those states. But between states looking for ways to offset large financial deficits and brick-and-mortar stores like Best Buy complaining about Amazon being unfair competition, the issue swelled.

Amazon CEO Jeff Bezos said many times that his company would agree to collect taxes if there were some sort of federal legislation.

Amazon finally broke down and started collecting sales tax in certain states, which allowed it to build more distribution centers within those states. For instance, Amazon announced that it would collect sales tax in New Jersey last May so that two Amazon distribution centers could be built.

This led to faster shipping for customers, such as Amazon's same-day delivery program, making it more competitive than ever (especially since it still had cheaper prices than most brick-and-mortars).

Source: Reuters



Comments     Threshold


This article is over a month old, voting and posting comments is disabled

RE: One important fact you missed
By phazers on 1/18/2013 6:49:56 PM , Rating: 2
I haven't shopped at Bust Bye ever since I discovered they were falsifying their own Internet site with a special intranet site with higher prices. I actually had to go home, print out their website prices for a new TV and BD player, drive back to the store and confront the salesdude vis a vis the intranet site with prices several hundred dollars higher.. I got the stuff at the lower price and then told them I'd never be back..


RE: One important fact you missed
By wordsworm on 1/19/2013 2:17:11 AM , Rating: 2
I thought everyone had a smart phone these days.


RE: One important fact you missed
By Jaybus on 1/21/2013 4:16:02 PM , Rating: 2
You call them smart phones. I call them half-wit phones.


"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA














botimage
Copyright 2014 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki