Monday, July 1, 2013

Amazon and You

Use Amazon?  Most likely you do, at least at some point.  According to a recent not I saw in Business Week, roughly 36% of all consumer purchases in America intersect with Amazon at some point.  Either you start out looking at a product on Amazon, do some research on it on Amazon or buy it on Amazon, but at some point, if you buy a product in the US, your path moves through Amazon just over a third of the time.  That's a pretty amazing figure

Not so much so, though, when you consider that Amazon's total sales equal that of the next 4 largest online retailers combined. (Amazon's total sales only reach about 10% of Wal-mart's total, so the online retailer has quite a distance to go to catch Wal-mart).  In order to increase its sales and have a chance of eventually overtaking Wal-mart, Amazon had decided to start same day delivery on products other than digital ones.  You would order a product in the morning, and, by the afternoon, it would arrive at your door. In fact, it has introduced this in a few large cities.  

 In order to put the process in place, Amazon will have to drastically expand its distribution network and expose itself to collecting more sales taxes, a major reason why the retailer has thrown  its weight behind the Marketplace Fairness Act.  The company figures that, since expanding its physical presence into more markets will obligate it to collect sales tax in them, requiring all online retailers to collect sales taxes takes away another competitive advantage those retailers would retain over Amazon.

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