• The Los Angeles Times reports that Amazon's deal with the state of California to begin collecting sales taxes for online purchases there could actually result in the e-tailer adding millions of dollars to its bottom line. The reason? When Amazon negotiated the deal, it also agreed to open two fulfillment centers in the state, in San Bernardino and Patterson, each of which is expected to hire at least a thousand employees.
Well, it seems that those two communities are so thrilled with having been chosen by Amazon that they are on the verge of agreeing to give the e-tailer what is described as "the lion's share" of the state sales tax revenue that they are likely to get once it begins being collected, to the tune of $8 million a year.
The story notes that "critics worry that any deal would embolden other retailers to demand similar concessions at a time when California cities are scrambling to plug budget holes. Particularly grating, some said, is the idea that Amazon — whose business model long was based on selling merchandise without collecting taxes — could now profit from those levies."
Well, it seems that those two communities are so thrilled with having been chosen by Amazon that they are on the verge of agreeing to give the e-tailer what is described as "the lion's share" of the state sales tax revenue that they are likely to get once it begins being collected, to the tune of $8 million a year.
The story notes that "critics worry that any deal would embolden other retailers to demand similar concessions at a time when California cities are scrambling to plug budget holes. Particularly grating, some said, is the idea that Amazon — whose business model long was based on selling merchandise without collecting taxes — could now profit from those levies."
- KC's View:
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I keep saying it, and this is more evidence ... while so many other people are playing checkers, Jeff Bezos is playing chess. (By the way, keep an eye on our MNB TV series ... we have an upcoming segment that addresses the sales tax issue and how changes here are likely to affect Amazon's business.)
BTW...I'm aware that we have a lot of Amazon news this morning. There will be some folks who may complain about that, just as sometimes there are people who complain about too much Walmart coverage. But I believe that MNB has to be where the action is, and increasingly, Amazon is changing the rules of traditional retailing...
