ER 013: More sales taxes, Email capture, Amazon going into pharma
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South Carolina vs. Amazon for Sales Tax
Show Notes
This is The Ecommerce Roundup, Podcast 13, today is August 18, 2017, I’m your host Bryan, and here’s the ecommerce news roundup for this week –
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- I’m on vacation next week, so there won’t be a podcast episode next week.
- Sales taxes – the discussion continues
- Collecting email addresses on your website
- Wall Street Segment
I’ve got a short podcast for you today. To be honest, I didn’t hear many noteworthy things this week in the world of ecommerce. Maybe it’s because it’s August? I don’t know. So let’s make this happen and then all have a good weekend.
Sales Taxes
There’s more news on the sales tax front. I think this issue is critical because it affects all ecommerce sellers.
I’m a believer in following the law and doing the right thing, however, there is just no clarity on this issue right now because technology is outpacing politics and our lawmakers haven’t clarified this issue yet. They need to, because ecommerce is big and only getting bigger. As ecommerce sellers we need to know what to do in order to follow the law.
So I saw an article this week on CNBC, which I’ll link to in the show notes, https://www.cnbc.com/2017/08/15/amazon-faces-a-tax-fight-in-south-carolina-that-could-change-how-online-sellers-do-business.html, and I’m happy I found it because it’s bringing this issue to the forefront.
Last week I spoke about this sales tax amnesty program, which basically put the entire responsibility of collecting and paying taxes for products sold on Amazon by marketplace sellers on the shoulders of marketplace sellers.
Obviously there are many interests at play here. States want their tax money. Amazon doesn’t want prices to be higher for their customers so they don’t want taxes. Sellers also don’t want higher prices for their customers so they also don’t want taxes. But through this Amazon seems to have said to 3rd party sellers, tough, you deal with it, which I think is surprising since 3rd party sellers sell over half of the volume on Amazon, and I would think Amazon would be incentivised to make selling on their platform as easy as possible for 3rd party sellers so that they fend off potential competitors like Walmart from taking 3rd party sellers away from Amazon. Amazon already takes care of all the payments for 3rd party sellers, why can’t they also just layer on a tax service for 3rd party sellers on top of that? Amazon already collects taxes for products they sell through their vendor programs. At the same time, I understand Amazon’s argument, that they’re just a fulfillment provider for third party sellers, and not the actual owner of the merchandise since they didn’t buy it, and so therefore they shouldn’t be responsible for collecting taxes.
So here’s what’s happening.
South Carolina is claiming that Amazon is responsible for collecting taxes on products sold on Amazon by third party sellers. South Carolina is saying, no it’s not third party sellers’ responsibility to collect and pay taxes, it’s you Amazon.
And this puts the whole idea of the sales tax amnesty program into question. Because if it becomes law that Amazon is responsible for collecting sales taxes, then there’s no point for the sales tax amnesty.
Obviously Amazon is fighting back hard.
Another complexity here is that different states have different laws. But, in any event, since this case is happening it seems as though we’ll have a resolution in the future regarding who is responsible for collecting and remitting taxes.
I’ll keep you posted as I learn more about this.
Collecting email addresses on your store
So we’ve been using the spinner pop up on shopify stores to collect email addresses and the thing continues to work really well.
Some store owners I spoke with continued to be skeptical about it but I’m telling you the thing works like crazy in terms of getting email sign ups like nothing I’ve seen before.
If you’re still on the fence, I suggest you just try it out for a month. You can always take it down. But again I’m telling you to give it a shot because I don’t think you’ll be disappointed with the results.
If you have a Shopify store, go to the app store and search for spin or spinner to find some options you can use for your store.
Wall Street Segment
I saw a report this week that Amazon is getting into the pharmacy business, which is no surprise.
Just as Amazon wants to promote brands on their marketplace by cutting out middlemen and other retailers, Amazon wants to get rid of the middlemen in the pharmaceutical industry. That being said, this is a complex industry with many powerful players and entrenched interests jockeying for position. Of course long term my money is on Amazon, but it will be interesting to see how this plays out. For now the current companies in pharma are expressing what they call low level paranoia about Amazon. If I were them, I’d elevate that paranoia to full blown.
Amazon’s stock is almost $100 lower than its recent peak. Why? I’m not sure. Trump has been tweeting about Amazon not paying taxes and that could affect it. Or, it’s just the movement of the market with people taking profits and selling.
Shopify stock has settled in the mid 90s and has stalled from it’s insane climb this year.
And bitcoin continues to climb although now we’re seeing some volatility this week. By the way bitcoin has nearly doubled in price this past month alone, while the number 2 crypto Ethereum is up about 50%. Since the prices are running up so much recently now I’m seeing crypto currencies in the news everywhere. What can you say, everyone wants to make money.
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So that’s it for today. Thanks for listing.
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