If you have been following tech news recently, you would be aware that Amazon has already started levying sales tax in several states across the US. (Currently – Arizona; California; Kansas; Kentucky; New York; North Dakota; Pennsylvania; Texas; Washington, but soon to be all states, if the proposed legislation goes through.) There has been a lot written about this in the past several days.
Anyway, as someone who has been affected by the state taxes (the state I am in right now collects sales tax :( ), I have some theories on how well Amazon may continue to do.
1) Same day delivery a definite possibility – This is what a lot of sites have been predicting. Amazon will build warehouses close to you and offer same day delivery. How do I know this ? My most recent offers shipped from a warehouse some 30 miles away from where I live. Earlier, it would do a cross country from some state that was miles away.
2) Sales tax is a big turn off – There are two things about state taxes I hate. One – I end up paying more, and everyone hates that. Two – I hate it when the tax is applied at the end, and I am like whoa! that suddenly sounds expensive. I like to see price and buy at that price. I don’t like to calculate in my head what x% of that amount is and then add it to the amount. It’s a big turn off!
3) How competitive will the prices be compared to Brick and Mortar companies ? – Hard to say – with the addition of tax, I find that some of the items I bought recently were the same price or even lesser in some cases at stores like Walmart.
4) Why buy on-line ? For a long time now, the model has been, go to a store, take a look at an item, and then go order it on Amazon for far fewer dollars. I think that trend may now change. I could look up prices on Amazon, read product reviews, and then go to a store, and buy it if it is the same price or less. Why wait, and why buy on Amazon ?
5) Planned vs Impulsive – I feel people that buy on Amazon are generally well planned. They have staked out an item for some time, seen the price fall and rise, (Through wishlist) and determined that the price it is at right now is as good as it gets. Then we order it, and don’t mind if we have to wait even a week till the package arrives at the door. Impulsive shoppers on the other hand, go to a mall, look at something and say – that’s something I got to have. Impulsive shoppers could also possibly buy stuff on Amazon, depending on how lazy they are. :) However, I feel that if the price difference advantage goes away, people that plan out their purchases might not really want to wait. They might head to stores…
Just my two cents on the subject.