Amazons Projected Move to Same Day Shipping and its Impact on Local Retailers
Amazon, the mega online retailer, already has the upper hand on many local stores, in their ability to (more often than not) offer lower prices than their competitors. They also have perks, like taking advantage of the 1992 Supreme Court Ruling, that they are able to offer sales tax free purchases to their customers, so long as they do not live in a state where Amazon has a physical presence.
The tax-free sales status has drawn the ire of many state governments, my home of North Carolina included, causing more than a few issues. It seems, however, as if Amazon has relented, and is slated to start collecting tax as early as this September. Why the sudden change of heart?
A recent article at Slate goes into detail regarding Amazon’s new ambitious venture. Since they have decided to yield to state pressures and begin charging sales tax, they now plan to push distribution centers in many, many more states. Per Slate, they are planning centers in New Jersey, two in Virginia, two in California, another in Tennessee, and Indiana for right now. Their motive appears to be free single day, if not same day shipping to their already rabid customer base.
What does this mean for your local retailer? Well I can't see how this is good news. Brick and mortar stores have been losing business for years to the online marketplace, be it Ebay, Amazon, or Overstock, or the smaller specialty online marketplaces. The big advantage your local stores have held has been that you can walk in with an idea of a product that you want, and walk out with that product in hand, no shipping time or cost. Amazon has already tackled both time and cost of shipping, offering free two day shipping to its over 5 million Amazon Prime members. If Amazon is really able to offer same day shipping either free or for a small fee, I don’t see how many of the already struggling brick and mortars will survive.Continued on the next page