
Amazon Price Check app draws protests from some retailers  - wglb
http://www.chicagotribune.com/business/breaking/chi-amazon-price-check-app-draws-protests-from-some-retailers-20111209,0,1595833.story
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brk
I think local retailers are given "special treatment" in that they don't have
to add a shipping cost on top of the item price.

Consumer retail is evolving, as it has been forever, and will continue to do
so into the future.

Local retail shops can cater to immediate gratification desires by shoppers. I
can't just order up a latte on Amazon and have it NOW. If I need a new HDMI
cable to watch a DVD with some friends tonight, then even free overnight
shipping won't solve my needs.

But, for many other things... A new pair of shoes, a new coffee pot, a bottle
opener, etc., I can wait 2 or 3 or 7 days to get the item. The Internet isn't
going away, and even if I had to pay sales tax, I'd probably still continue to
buy things on Amazon because it's easier for me than going to a retail store
and dealing with potentially limited selection, crowds, etc.

These companies are simply NOT going to beat Amazon into submission. It's far
too late for that, and I actively despise any retailers who try to increase my
tax burden vs. offering a valuable service to me.

~~~
extension
_I think local retailers are given "special treatment" in that they don't have
to add a shipping cost on top of the item price._

Yeah, those lucky retailers get to blow off the shipping cost just because
they aren't shipping anything. But they do have to pay a fee just for the
privilege of doing business, and Amazon gets to do business without paying
that fee. And now Amazon is using their dusty old brick and mortar stores as a
showroom. I can see why the local retailers are feeling jilted.

~~~
Terretta
No, they don't pay a fee.

You pay a fee for making a purchase. Local retailers should be arguing that
they don't want to be the tax collectors, so their prices would look lower
too.

Either way, you, the buyer, are responsible for paying the sales and use tax,
regardless of whether you bought from BestBuy or Amazon.

Again, both BestBuy and Amazon "get to do business without paying that fee",
as it's not something either of them pays.

To enjoy the competitive advantage of having a local presence, BestBuy does
agree to help your local government collect your taxes (and in fact gets to
KEEP a percentage of the taxes they collect!), while Amazon, who is not in
your local jurisdiction, relies on you to pay the tax you owe.

~~~
storborg
So I assume you willfully pay your tax on all online purchases?

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rdtsc
My state had line item on the tax form asking for the amount of goods
purchased online so then they can tax them.

Always wondered what people put in there and if the state even did anything
about it (audited people).

I guess they could ask Amazon for records (threatening a lawsuit) and cross-
reference with all the reported taxes based on name and address. If user
bought just from Amazon more than what they reported they they have obviously
owe some money + fines & late fees.

(But I suppose I am making gross assumptions about the competence and general
technical abilities of my state's tax collecting office).

~~~
Terretta
> _could ask Amazon for records (threatening a lawsuit)_

[http://arstechnica.com/tech-policy/news/2010/10/judge-
blocks...](http://arstechnica.com/tech-policy/news/2010/10/judge-blocks-north-
carolina-attempt-to-get-amazon-sales-data.ars)

~~~
rdtsc
Oh wow. I was thinking of a different state, but this is interesting. It
already happened and I missed it.

First it was anonymous purchase data. Then NC demanded user names and
addresses but Amazon fought on 1st Amendment grounds and seems to have won:

“The First Amendment protects a buyer from having the expressive content of
her purchase of books, music, and audiovisual materials disclosed to the
government,”

I wonder if this was Zappos for example. What would have been the ruling.

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bluedevil2k
There's a local article in the Austin Business Journal quoting a guitar dealer
who says "Amazon charges $1000 for a guitar, but when I charge $1000 for the
same guitar, I have to charge $1082.50 because of sales tax".

What he doesn't consider is that Amazon is more than likely charging $800 for
that guitar.

The "locals" make claims about price difference being solely due to sales tax,
but overhead is more the reason than anything else.

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timjahn
Last year, I needed a backpack for travel/multi-use/etc. Something that would
fit my laptop, a small video camera, and misc other stuff.

I went to Best Buy to see what they had, and it wasn't much. They had one bag
that looked nice though and the salesman told me how amazing it was.

It's Best Buy. Of course I didn't believe him. So I pulled up the iPhone
Amazon app, scanned the product barcode, and saw what the reviews were. Turns
out, the salesman was right - this bag was very well reviewed.

And Amazon had it for $20 less. So I left Best Buy, went home, and bought the
backpack off Amazon.

There will always be a place for local, brick-and-mortar stores. As others
have mentioned here, Amazon can't fulfill instant gratification.

But I think instant gratification is a small percentage of the overall buying
experience. Amazon can help with the rest.

(If anybody's interested in the kick ass backpack I got, here's the Amazon
link. Looks like it's more expensive now: [http://www.amazon.com/Lowepro-
CompuDaypack-Camera-Bag-Slate/...](http://www.amazon.com/Lowepro-CompuDaypack-
Camera-Bag-Slate/dp/B000EY5R8C/ref=sr_1_1?ie=UTF8&qid=1323462065&sr=8-1))

~~~
danso
So what could Best Buy have done for you that this salesman couldn't? He
apparently gave you good advice, and you had a chance to touch and feel the
product.

I will admit that $20 out of $100 is not an insignificant discount...but how
much less of a mark-up would Best Buy have to have so that you would purchase
its product?

~~~
timjahn
Best Buy simply would have had to match Amazon in order for me to buy it in
their store.

Because I didn't need the backpack immediately, I'd rather save $20. The
backpack was $80 at Best Buy and $60 on Amazon, so it was a pretty good
saving.

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cdk
I think competing on price alone against behemoth like Amazon is a losing
strategy for local businesses. For example I could be buying a case of wine
online but I go to my local wine store because even though it is a little more
expensive the owners are good at recommending wines and they constantly
refresh their selection. Which is great for someone like me who isn't a
connoisseur.

~~~
cmwright
Although I agree with this for the most part, it goes both ways. A huge use
case for this app (for me at least) is to be able to quickly look up product
reviews by other consumers. If I'm already in the store, I might well buy the
product there if it was given good reviews on amazon. In this case, amazon has
spent the money to develop the app but the store gets my money.

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iradik
Most stores will not match amazon's pre-tax prices today. Why would it be any
different if amzn collected tax?

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dfragnito
Nice app but to totally circumvent the retailer and shipping fees, they should
invest in quantum teleportation technology.

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wglb
I was thinking that this was a particularly clever idea--given that Amazon
seems to very good at "pricing arbitrage", as someone smarter than I said.

Some of the stated objections are that Amazon, who doesn't always collect
sales tax, is taking business from local stores.

~~~
tuppy
"Amazon [...] is taking business from local stores."

Why is this complaint even taken seriously? If your business model is
superseded by someone else who can deliver a product in a manner that
customers prefer (in this case, cheaper and delivered to their doorstep) then
you either compete or you die. Because that's what competition is.

~~~
mhb
Their business model hasn't been superseded. Amazon is free-riding on the
stores' display of physical goods. If the shoppers don't value being able to
view, handle or browse the physical goods, why are they in the store? So they
value having the store there but don't want to pay for it.

Maybe Amazon's plan is to drive these stores out of business and then open its
own display stores where people can go to inspect merchandise before ordering
it online.

~~~
tuppy
I really haven't seen any evidence to back up your claims outside of fear-
mongering news articles and general whining from the big box brick-and-
mortars.

"Maybe Amazon's plan is to drive these stores out of business and then open
its own display stores where people can go to inspect merchandise before
ordering it online."

This cannot be a serious conjecture. Opening up quasi-retail locations with
all the expenses of retail but no ability to actually making a sale? Didn't
Gateway do this in the late 90s?

~~~
jaredsohn
If it ever got to the point where brick-and-mortar stores for certain things
ceased to exist since everyone was buying online, you could have a store that
actually charged admission to browse (and to convince people to still come,
you could make that admission count toward an online order or toward food at a
store restaurant.)

Pretty unlikely, although maybe it would make sense in a less-developed
community (third world countries, outer space) that does not already have
modern brick and mortar stores.

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wtvanhest
I know everyone thinks this is bad for retailers, but it really is only bad
for them in the short run. In the long run the biggest negative impact will be
felt by retail REITs, and those that have long term debt on retail buildings.

~~~
wtvanhest
*this is because retailers will on average lower the rent they are willing to pay as they have to compete with online sales channels.

