Amazon is reluctant to collect sales tax in states where it doesn’t have warehouses. While this gives the etailer an unfair advantage over local retailers, changes in tax laws could lead to further growth for Amazon.
While Amazon has been hesitant to collect taxes in states where it has no physical presence, this could all change following analysis of the benefits of having a warehouse in such states.
Take the state of New Jersey where Amazon has agreed with tax authorities to start paying taxes from next year. The company plans to build two new distribution centres in the state. The new investment will allow the pure-play online retailer to offer greater delivery options to customers with the possibility of same-day delivery.
Right now you carry out competitor price monitoring online and in stores before placing your order online. When you order products online, you have to wait a while to receive your new purchase. It may be next-day delivery or a day that is convenient for you to be at home. Go to a traditional bricks-and-mortar retailers and you have the advantage of getting your hands on the goods on completion of the in-store payment.
While this is one advantage the stores have over the pure-play online retailers, retailers are now realising that the market is open to further retail dominance by Amazon should the Internet retailing giant have the ability to deliver goods to customers within a few hours of them being ordered online.
© Profitero 2012
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About Profitero
Pricing intelligence company Profitero provides retailers with actionable price intelligence data, monitoring over 50 million products across 4,000 eCommerce retailers every day, observing pricing, promotions and stock availability. We work with the world’s leading retailers, enabling them to acquire new customers and grow profit margins by monitoring and responding to changes in competitor pricing and promotional activity as they happen. For more information on Profitero price intelligence and competitor monitoring, visit www.profitero.com or email sales@profitero.com
