Target Marketing

You will be automatically redirected to targetmarketingmag in 20 seconds.
Skip this advertisement.

Advertisement
Open Enrollment | Subscribe to Target Marketing HERE
Connect
Follow us on
Advertisement
 

It’s High Time Web Sales Were Taxed

How 'showrooming' wrecks American business and destroys American communities

May 8, 2012 By Denny Hatch
25
Get the Flash Player to see this rotator.
 

According to Technopedia, "showrooming" is when a shopper visits a store to check out a product, but then purchases the product online from home. This occurs because, while many people still prefer seeing and touching the merchandise they buy, many items are available at lower prices through online vendors. As such, local stores essentially become showrooms for online shoppers.

Someone once told me the story of a woman who owned a bookstore in a small, upmarket commuter town in Bucks County, Pa. She worked 12 hours a day for years to keep the place going—author lectures and book signings, children's reading programs, book fairs at local schools, etc. Life for her was a nightmare in the face of vicious price competition from deep discounters Amazon.com, Borders and Barnes & Noble. At the time, the ultimate bookstore killer—e-books—were maybe a gleam in Jeff Bezos' eye.

One afternoon while an author was at the signing table, the owner wandered along the line of customers with books waiting to get an autograph and exchange a word or two with the author. As she eased down the line the she overheard one woman say to another woman, "Actually I bought my copy from Amazon. I couldn't resist the price."

This was the final fist in the gut.

The store closed the following week.

The losers:
• The town (no author lectures and book signings).
• The children (no more after-school reading programs).
• The schools (no more book fairs).
• Adult readers (no knowledgeable sales people to discuss books, plus the nearest bookstore—Barnes & Noble—was 12.9 miles away).
• A team of knowledgeable, literate sales personnel was thrown out of work.
• The state of Pennsylvania lost out on: 1) 6 percent state sales tax on the book purchased from Amazon, say $1.50 on a $30 book, and 2) unemployment insurance for the laid-off workers.

The winner:
Amazon's rapacious Jeff Bezos, whose corporate tactics eliminate competing bricks-and-mortar bookstores (thereby gaining a monopoly on retail bookselling). In addition, Amazon has turned thousands of other retailers into showrooms so that the giant e-retailer can sell appliances, clothing, electronics, toys and a gazillion other items at such deep discounts that everyone from big chains to mom-'n'-pop businesses will ultimately fold up their tents.

Takeaways to Consider
  • All state governors and attorneys general owe it to their constituencies to collect sales taxes from pure-play Internet retailers on merchandise delivered into their states.
  • This action will bring in tax money, help level the retail playing field, deter “showroom” businesses from closing (because they are no longer pure showrooms), save jobs and unemployment insurance payments, and enhance the quality of life in communities by keeping businesses open rather than promoting abandoned buildings and empty malls.
  • A campaign should be launched whereby the National Association of Manufacturers and the National Retail Federation join forces to persuade their vast memberships to follow the EDC beacon and pull their merchandise from Amazon—and all other pure-play Internet retailers—to keep them from selling online on the cheap, thus mauling their basic bricks-and-mortar customers—the local retailers who stock and sell their products.
  • According to the U.S. Census Bureau (PDF), e-commerce currently accounts for roughly 5.5 percent of all retail sales. This is relative peanuts, but it is growing exponentially—an increase of 16.1 percent over 2010. Now is the time to halt the coming devastation.
  • If this merchandise were not available online, buyers would be forced into retail stores—good for local economies, communities, tax revenues and jobs.
  • Under this plan, paid-for digital deliveries should also be taxed—e-books, e-subscriptions to magazines and newspapers, special reports, white papers, etc.
 
25

SPONSORED CONTENT

MORE ON ONLINE MARKETING >>

FROM THE BOOKSTORE

You have a worthy project AND you’ve identified a prospect with means. How do you connect the two in a way that produces a sizable gift? Jerold Panas, America’s premier fundraiser, shows you exactly how in How to Make a Case Your Donors Will Love. Making a Case Your Donors Will Love

You have a worthy project AND you’ve identified a prospect with means. How do you connect the two in a way that produces a sizable gift? Jerold Panas, America’s premier fundraiser, shows you exactly how in How to Make a Case Your Donors Will Love....

ORDER NOW

You know you need to gather donor data. But why? And more 
importantly, how? And even more importantly, what do you do with it once
 you've gathered it? Are you gathering too much? Or the wrong kind?
	This new 
	FundRaising Success
	webinar brings the case-study format of our popular Engage conference 
to an extended, value-added webinar that will dig deep and give 
nonprofits guidance on the best ways to gather and use donor information
 — as well as take the mystery and trepidation out of the whole issue.
	Featuring:
	Page Bullington, Target Analytics; Mazarine Treyz, "The Wild Woman of 
Fundraising and Social Media"; and Roger Hiyama, Russ Reid
	Duration: 75 minutes
	Cost: $19.95AVAILABLE ON-DEMAND UNTIL 9/9/14
	Click here to view this webinar today! Engage Virtual Workshop: Driving Donations with Data

You know you need to gather donor data. But why? And more importantly, how? And even more importantly, what do you do with it once you've gathered it? Are you gathering too much? Or the wrong kind? This new FundRaising Success webinar brings the case-study format of our popular...

ORDER NOW

 

COMMENTS

Click here to leave a comment...
Comment *
Most Recent Comments: