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Santa Shopped Online This Year
An anonymous reader writes "ZDNet is reporting on another blockbuster year for online shopping. Online shopping was up almost 30 percent over last year." From the article: " Clothing was the top seller in terms of dollar amount, at $5.3 billion total, up 42 percent from last year's revenue, the report said. Computer hardware and peripherals showed the most growth, 126 percent, at $4.8 billion. Consumer electronics was the second fastest growing category, garnering $4.8 billion, up 109 percent. People spent $3 billion on books online, up 66 percent, and $2.3 billion on products in the toys/video games category of hardware and software, a drop of 9 percent from last year, the study found. "
before the gov't demands all those juicy sales taxes? You know its coming, especially after the huge growth in online sales every year.
I got nothing at all for christmas this year... :(
The summary doesn't seem to have it quite right: the $30b is an estimate of what was spent 31 Oct - 23 Dec. Which is 30% than same estimate last year. But, FTA, another company did a survey for a similar period and found total sales to be $18b, up 25% from the previous year. Which all goes to suggest there isn't an agreed measure of online spending ...
It seems odd that clothing would be the top seller online, given that it involves more to return/exchange items to an online store than a regular store if the clothes should happen to be the wrong size.
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I own 2 (and 1/2) retail stores in the Midwest US, and this will be our final year in retail.
Our inventory was better than or equal to more dotcoms. Our service was better (30 day DOA or defect replacement and lifetime labor). Our pricing was equal. Our hours were "better" since we were open 7 days a week.
What killed us? Sales tax. Our average sale in 2005 for about $230 (we sell paintball, skateboards and a ton of clothing). At 7%, we were consistently $16+ over per average sale than the dotcoms, even with instant acquisition.
2005 was our best year ever, so we're ending it at the top. Next year's outlook is bleak as many states want to raise sales tax and other fees. No thanks. In 2005 I paid more in sales tax than I did in payroll.
I'm not mad, actually -- the dotcoms are a great way to save money AND screw the state. I feel bad about my customers who loved our store, but I also know many bought online for the higher margin items that didn't need servicing (we were not competitive on those items as we had to price in future service and were always about 20% higher).
Local communities WILL suffer, though. Retail sales can be a big income base for the local community -- my mechanic performs almost 80% of his work for retail employees' cars. My dentist has almost 1/3rd of her patients working in retail. As retail suffers, these secondary markets will also suffer. But the positive is that the money we save in retail by shopping online should offer us more money to spend on other things.
It was a great 5 years, I did very well financially, and in the end, the state decided they didn't want me around -- otherwise they'd have ended the vile sales tax that is quickly ruining retail.
however, it's up to the individual to volunarily report all internet purchases on their state tax form, so it's a wonder why they even bothered to pass the law.
I wonder if online retailers would change their tune if there was a major crackdown on people evading paying their use taxes. When you buy something online, you are responsible to pay your state a tax equal to the difference between the local rate and the rate you paid (essentially the full sales tax for most online purchases). It isn't that hard to track violators. If ABC web shopping doesn't collect sales taxes AND a citizen of the state received a package from them AND said citizen filled in $0 for their use tax, one can deduce that said citizen underreported their use tax by at least that amount. A list of packages could be generated by forcing companies making local deliveries to report a list of all packages delivered (this would require a federal law as it falls under the Elastic Clause of the Constitution). If you cannot provide the receipts proving you accrued no more use tax than you declared, then you pay the tax with penalties and interest.
Personally, I feel it would be a lot easier and trample on far fewer liberties to just have the web retailer collect sales tax.
We don't have sales tax. Of course, the property tax is a killer, so you can then complain that online stores can be located in very inexpensive locations.
Santa would HAVE to shop on-line this year. It would be the only way that he could legally get the toys.
The old way of doing things, by having his elves make the toys, is now illegal. It constitutes "Intellectual Property theft". And WIPO, the RIAA and MPAA all joined forces to force Saint Nick to adhere to the New World Order.
Our now less jolly old Saint Nick has had to negotiate Patent Cross-licensing, Manufacturing, Trademark and Copyright agreements with all of the major corporate entities this year. This left little time to build toys; hence the need for Santa's web shopping spree.
Consequently, the Elves have had their prior work outsourced to the Elves in India, China, and elsewhere. Fortunately, they are still gainfully employed, as they have now become either high-powered Lawyers or PEB's (Pointy-eared bosses). This was a bit hard on the Elves, as they are normally good, by nature.
Santa's visits have also had to come to a stop. The delivery by flying Reindeer constituted illegal border crossings and smuggling, as well as breaking and entering via the Chimney. Now he has to use UPS.
The various State Attorneys General are also looking into the issue of whether Interstate taxes have to be paid, from previous years.
Somehow, I liked the old way of doing things (before this ad-hoc notion of "Intellectual Property" was created) much better.
The best way to predict the future is to create it. - Peter Drucker.
A lot of electrons are being thrown around about how sales tax is giving internet retailers an 'unfair advantage' compared to their brick and mortar counterparts. I ended up splitting my money roughly evenly between Amazon and their ilk, and their brick and mortar equivalents. Even with roughly equal prices, the internet stores allow the customer to avoid a major costly, time consuming, and stressful part of holiday shopping: the trip to the mall. If you figure the cost of car operation, and the time wasted driving, parking, walking past stores you won't patronize, and the aches and pains of shlepping all those packages around, sales tax barely registers. People are realizing that avoiding much of the hassle is valuable in itself.
On the other hand, when I finally broke down and went to the local Mega Mall and went into the Books a Million to get a few fill-in gifts, I was surprised by how much being able to scan a large number of titles in a very short time was helpful in selecting gifts for hard to buy for relatives. While Amazon has their suggestive selling algorithms to suggest related information, seeing a book out of the corner of my eye frequently had me saying K--- would like this or TR would like that. It just isn't possible to present that kind of information as completely online as it is in a brick and mortar environment.
kfg:
If you run a business today you are a tax collector in every sense of the word. You withhold payroll taxes, you charge sales taxes, you file 1099s on interest and dividends you issue to ensure that the recipients pay the tax.
Businesses are already the main collectors of tax. Many even wind up paying $10,000 a year or more for accountants and accounting software to make sure they don't screw the taxes up.
The Fair Tax just simplifies the process by making all the federal taxes one simple to compute percentage.
The only legitimate challenge to the fair tax I've ever heard was from the man soon to be governor of Virginia, Tim Kaine. He said that just as you would diversify your investments, the government should have a diversified tax base, and the Fair Tax puts all your eggs in one basket. I don't agree with this for various reasons, but that's the only challenge to the Fair Tax I've ever heard that is even valid.
I've had enough abrasive sigs. Kittens are cute and fuzzy.