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Why Amazon Wants To Pay Sales Tax
Maximum Prophet writes "A while ago, Amazon caved on paying individual states sales taxes. Now we know why. Amazon is setting up same-day delivery warehouses everywhere. They will put most normal retailers out of business." If that's a bet, I'll take it.
Driving to brick-and-mortar stores is an expensive time-waster. The more online choices I have the better.
"This post is an artistic work of fiction and falsehood. Only a fool would take anything posted here as fact."
Still, if brick and mortar specialize then can still do well for themselves. Just give up the bulk order stuff Amazon handles in volume.
Sucks, if they threaten your meal ticket, but this whole trend has been going on since Sears & Roebucks sent out their first catatlog.
A feeling of having made the same mistake before: Deja Foobar
Local retailers (and apparently Walmart, too) were the leading forces in pushing such legislature through in many states. They obviously (and rightfully) fear that Amazon could completely destroy them. This legislation, they thought, would force Amazon to compete with them on an even playing field. Except the playing field was never even to begin with. Even if you force them to abide by the x% sales tax rule, they still completely dominate you in terms of convenience, selection, sheer operations efficiency and economies of scale. Only Walmart could really hold a candle to them. This is going to blow up in the brick-and-mortar retailers' faces and they'll have nobody to blame but themselves for their downfall.
Amazon bought Kiva Systems last year - a company that specializes in pick and pack robots. If I remember my dot.com history correctly it was the picking and packing aspect of the business that killed on-line grocery WebVan. (Which Amazon was an early investor in. I wonder f Amazon has any of the old WebVan stuff around.)
I have a prime membership with them. main app on my phone is the Amazon store and code scanner, go into Wal Mart see an item touch and play with it. if i like it then i check how much on Amazon and then buy it, it is then at my home with in 2days (1day on most things). My wife is disabled and can not drive, so Amazon has been a wonderful thing for us and our kid.
First manufacturing was destroyed, and the economy is still barely adjusting. Now retail is being threatened. Whats left for 300 million people to do? Interesting times indeed.
You could. Walmart has free shipping. Even to Alaska.
That's completely insane - they are undercutting local businesses by 20 - 40%. Don't know how long they're going to keep this up but watching it is entertaining.
Faster! Faster! Faster would be better!
Yeah, let's let Amazon get a monopoly so they can jack up prices. Or do you morons actually think they'll keep their prices so low after running out of business the alternatives?
You seem to think that once a business gets to the top of their space and starts acting stupid no one knocks them off. You seem oblivious that Sears used to be the retail giant with stores everywhere that couldn't be topped.
As long as Amazon is doing it better then I am all for them expanding.
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Robotic warehouses are not the nirvana that so many claim they are. The problem comes when demand falls off (all demand is cyclical) and your competition lets people go while your left with the same fixed costs. This is happening right now in the industry I work in, where the former leader is plunging out of control from large infrastructure costs, particularly their very sophisticated warehouses, that their competition doesn't have.
The strategy also seems to overlook that thing where, you know, people don't wanna' pay sales tax. Here in California that amounts to an almost 10% savings for those consumers who violate state sales and use tax laws (of course, I don't).
I once took an excursion to Reddit, and later HN. Unlimited up/down voting sucks when dealing with a hive-mind.
If there is a king of efficiency and lost cost in distribution and retail sales, it is Wal-Mart. You don't think they are just going to sit there and do nothing while Amazon moves in, do you?
Necron69
I wouldn't. Amazon as a system of getting goods makes sense, and if done right would cut down on gas consumption with everyone driving to the store separately. I happen to live in Seattle and have used AmazonFresh (grocery delivery) and have automatic monthly diaper delivery with AmazonMom and it's awesome. I look forward to a future where I don't need to drive anywhere to do my shopping, and can spend that time out hiking and having fun with my kid. Only thing that might be cool is an Amazon "try it" store where you can go check something out before getting it. Just drop the stuff off with my hose robot and it'll unpack, stock things in the fridge and elsewhere, and recycle the packaging, or better yet start using re-usable packaging and I'll just give it back in the AmazonFresh bins.
On the topic of local distribution centers, I'm sure that this will not be a full selection of Amazon products available for same day deliver, just a selection of the most popular items, which will still be nice to get faster.
I'm a sucker for going to farmers markets, picking out produce which was harvested yesterday and usually picked when it's ripe, not a month ago when it was still "green". For canned or frozen goods something like delivery could make sense (though I'm usually pretty erratic in my schedule for delivery) but I still get a lot of those things at Trader Joe's because Joe's suppliers use far less chemicals in the making of their products (I really don't like looking at something like a burrito, which should be beans, cheese, flour, oil and water, but reads like The Brothers Karamazov.)
Course, it' doesn't rain 11 months out of the year where I live, either, so I don't mind being out and about and hitting farmers stands on the way home from work, like some manic pinball.
Amazon's strength was books, then consumer eletronics, then food, then eveything else. While they have free delivery (for over $25 spent on most items) there's a certain amount of waiting and if the item is DOA (like one cracked DVD I received) you have to exercise some patience. Meanwhile good ol' brick and mortar lets you have the goodies in your hot little hands now and often work out better on returns.
A feeling of having made the same mistake before: Deja Foobar
Perhaps what we need is for people to get back in the business of producing. Our family business maximizes vertical integration and just-in-time manufacturing to make it so we control our process, product and profits. We do work with retailers and they take about a 50% cut. To make it we have to make sure that we keep as much as possible of that other 50%. Unlike many businesses, our family actually does the work. We farm. We turn sunlight into food.
I fail to see how destroying competition by undercutting local shops is a good thing for the local economy in the long term. By the time you figure out what is going on, they will own the market, and the small shops will be long gone. You will have no option but to deal with a single merchant. Good luck with that. Be smart. Help the small guys, even if they are a bit more expensive. That will keep things in relative check.
I fail to see how destroying competition by undercutting local shops is a good thing for the local economy in the long term.
In order to meet a Same Day Delivery promise Amazon will have to be LOCAL. So there went your major point. Poof.
Workers walk out of one failing business model which requires customers to come to them, and walk into a better business model which puts the "shelves" right there in people's homes (on the computer or their phone), and offers same day delivery.
You seem to have a lot in common with THESE people. They didn't prevail either.
Don't try to convince us you have never shopped on line.
Sig Battery depleted. Reverting to safe mode.
it is worth pointing out that Amazon will start COLLECTING sales tax not PAYING sales tax. The consumer is the one who will PAY the tax.
It ain't what they call you. It's what you answer to. http://mylyceum.us/
By minimising choice you end up with fewer low paid jobs. Even if it turns out to be the same amount of jobs they'll be lowered paid. It's not a good thing. Given the US' history of bending over for corporations too leaving everything to dry up and only having, for example, Wal-Mart and Amazon, as your only choice will not be a good thing. Anyone who can't see that in the long term that killing off choice is a bad thing is nuts. It's not just about doing things the old way. I like online shopping but why not have the same level of competition but online rather than deciding it's better to just go with the two companies that do questionable things and treat their employees like low paid shit.
Not every product Amazon has will be available at these "same day warehouses". Only the popular ones, ones that are predicted to be sell well for the season (or a special day) will be stocked. Next time you fire up amazon.com, expect them to push products that available at the warehouse near you, and sell it to you with their next day delivery guarantee.
I think you mean mean workers walk out of one failing business model and are replaced by computers and robots in a better business model.
The luddite's were not wrong, they were just overly optimistic. or haven't you noticed that the middle class is vanishing?
No one has a right to their *own* opinion. They have a right to the TRUTH.
I love how the Americans always blame their government rather than the obvious flaws in their economic system
I'm not sure how you can believe your economic death spiral philosophy. It doesn't make any logical sense. How does your version of an economy get started in the first place? How did we get to here from a hunter gatherer society? Did some magic being create jobs which created growth which created jobs which created demand? Of course not.
The way an economy grows is simple. People first have to consume less than they produce. This is savings. Then they can spend time and energy building capital goods which increase productive. More productivity means destroying existing jobs and cheaper goods. This frees up labor for working where they can add the most value. This process continues and we get richer and more comfortable as we have to work less for things.
Think about an isolated hunter gatherer society. They spend all of their time trying to survive. They have to either ration food or spend extra time hunting to get enough food for them to have the time to plant crops or raise animals. Both these things require a lot of effort at first to build the tools and work the land. But after they get it done they can feed themselves using fewer people. Now some people can think about what else to do like build furniture or boats or something else they never could have done if they had to hunt.
I love Jesus, except for his foreign policy.
If I remember my dot.com history correctly it was the picking and packing aspect of the business that killed on-line grocery WebVan.
Kiva Systems was founded by a former WebVan exec. He saw that Webvan was very popular with customers, but they couldn't deliver the service at a low enough cost. If they could eliminate the people...
Webvan's real problem was botched expansion. They had 3% market share in 30 cities, when they needed 30% market share in 3 cities. Too much truck mileage per shipment.
Safeway does grocery delivery now, but not very well. They just use order pickers picking from retail store shelves. So their systems don't really know what's in stock. Most orders thus lack some items ordered. A more automated system knows what's in stock, so the customer gets to decide when ordering how to handle out-of-stock conditions. (Ordering a different brand or size or item is an option then. Safeway doesn't do that.)
Delivery uses less energy than shopping. There's some whining about the "thousand mile salad", but moving a 45,000 pound truckload of lettuce a thousand miles uses less energy per head of lettuce than the 5 mile trip in the 2 ton SUV that moves 20 pounds of groceries.
A few more years, and automatic driving will meet up with automated warehouses.
Your post has some serious problems.
For banking, for instance, tellers haven't gone away, and there's no charge to see them. If your bank does charge you, you need to find another bank; there's tons of smaller banks and credit unions that haven't instituted the ridiculous fees the big banks have.
As for cashiers, we only need so many minimum-wage jobs. In many places, before the economy turned to total shit, it was really hard to fill those jobs because there just weren't many people who wanted to work for so little.
For grocery stores, if you think shopping online is going to replace the local supermarket, you're insane and need psychiatric intervention. How are you going to buy ice cream online? Unless they do some really fast delivery, it'll be melted. How are you going to buy produce online? Just hope they pick something that isn't squashed? What do you do when they give you apples with giant bruises on them? Send them back? Finally, I don't know about you, but buying things online can be a bit of a chore, between slow websites and poorly-written websites. If I know exactly what I'm looking for, buying online is great. It's especially good when you're buying a manufactured product that's exactly the same, no matter where you buy it (the LG flat-screen TV model ABCDE is exactly the same whether I buy it from Amazon or Best Buy). This doesn't work with food; it varies a lot, especially produce. Seeing a stock photo on a website is no substitute for seeing it first-hand, knocking on it (for melons), etc. It's not uncommon to walk into a supermarket intending to buy some fruit, and while they have them in stock, they're all crap (usually picked too early and shipped from far away). How are you going to see that online? You're not. And what if you want to browse an aisle full of some type of food? I can browse much faster by walking and looking at shelves than by messing around with some website.
Grocery shopping online isn't a new concept. Netgrocer tried it ten years or more ago, and it never took off, unlike Amazon and Newegg.
Online shopping definitely has its advantages, and works extremely well for certain goods. Electronics are a prime example here; you get the exact same thing as at the local store, and you get better information online, since the local pimply-faced teenager doesn't know anything about what he's selling. Groceries are at the opposite end of the spectrum.
Finally, one thing people will never do online is go to restaurants. There's plenty of low-wage jobs there for all the cashiers that lost their jobs.
What a blind fool you are.
This process has been going on for generations. Just go upstairs out of your basement and ask your mom.
She remembers the little grocery stores on the corner edged out by the big chains. She remembers one shoe store in town, now long shuttered by the 3 or 4 stores in town.
And the product variety and quality has improved dramatically every step of the way. That corner store usually and no more than 4 round steaks to choose from. Not an entire meat counter full of various sizes. They had poor quality fruit, when it was in season. Not a fruit section with fruit from all over the world all year around.
Oh, and hey, they had flys.
That kind of variety and quality doesn't come from mom and pop stores. It comes from big corporations.
But hey its a free country. You want those filthy little corner stores with limited selection, just drive 100 miles across the Mexican border. They still have them there. And the Flys too. No selection, very few products to sell. Go further down in central America, South America, Peru, Ecuador, Argentina and it gets worse still.
The one thing you notice when you return to the US/Canada after traveling overseas is the Grocery Stores. My god the quality, the prices, the variety, the freshness, the helpful staff.
Don't talk to me about self harming cheerleaders. You don't have the first clue how good you have it.
Sig Battery depleted. Reverting to safe mode.
I'll explain our current situation. After y2k and 9/11 those in power were scared we were going into recession. They were right we were. It is to be expected when you are facing an unknown threat. The correct course would have been for people to reduce debt and start saving to prepare for the worse. This naturally shifts production from long term capital goods to near term consumer goods. But the Federal Reserve wouldn't allow it. They pumped out the money like no tomorrow. This sends a false signal that people are thinking long term and it's time to build capacity. When businesses calculate if a long term project it worthwhile a major factor is what is the interest rate and expected inflation. At first both rates are low. Hence the housing boom and outsourcing to ramp up capacity. Now eventually prices rise due to all of this new money floating around chasing the same amount of resources Oil, Gold, Housing, ect. As prices rise all of those inflation numbers that people used in their calculations eat away the justification for increasing capacity. Then you get the crash as all of this projects are abandoned and the misallocation of resources and labor are exposed. The only solution is to let it work itself out. The market had a signal for a long time that more houses were needed because people were paying record amounts for them. If the easy credit wasn't there it would have been a good signal. But as it turns out all of the labor and material put into housing was a waste. Now you have to let the price of houses crash to where the market will support. All of those people that were employed by housing construction have to find new productive lines of work.
Let me know if this is making sense and I'll keep writing.
I love Jesus, except for his foreign policy.
after a long while, i've come to agree. small stores that are worth going to for whatever reason (friendliness; reliability; or even just an interesting gimmick) tend to make it, though not always. the reason so few do, is that they really have nothing going for them.
on the other hand, i went to an art and art supply store and after i complained about the price of his poster hooks, he showed me the books; he was paying more, wholesale, than wal*mart was charging retail. that was an amazing insight into economies of scale. he still made it by reputation and selling a diverse array of weird stuff (e.g. tubs of dmso; essential oils; and vintage softcore pornography).
"They were pure niggers." – Noam Chomsky
It's not for my lack of understanding why it doesn't make sense. It doesn't make sense because your argument is based on a very subjective and factually inaccurate view of recent history. One of the tenets of Keynesian economics that is sound is not to adopt austerity measures in the face of recession or depression. The time for austerity is when the economy is strong, and there are the tax receipts and free-flow of capital to pay down the debt assumed to spend your way out of a recession (and that's the only way out of a recession; it's what Clinton did to get us out of the recession of 1990-94, and then used the late 90's boom to pay down debt and balance the budget). The reason we've gone into double-dip now is because of this misplaced (and frankly mind-boggling) belief that after a decade of deficit spending while consistently reducing income, we can some how entice those who hold a record amount of capital back into spending by not priming the pump through government incentives. When the private sector is not spending, and people are out of work and not spending, who else is going to spend? The economy we've built is dependent upon consistent expansion and growth. When you have neither, you have nothing. This is not complicated math here. The fact there there seems to be a large segment of the population willingly suspending disbelief about conservative economic initiatives and principles is clear indication why we're going down in flames. If you're a student of history, you can why we are where we are now because a Republican-controlled congress made the same kind of demands on FDR, and if it weren't for the eventual wartime debt and spending, would have plunged us into a second great depression. Yet when you have a propaganda machine pumping out misinformation about what is really happening in the market place, it's going to remain this way until it either collapses or people finally question why we've built a corporate welfare state that pays to ensure it's participants can continue to game the system.
Explain to me using your logical model of economics why it made good economic sense for Barclays to manipulate LIBOR?
They also get good tax breaks from local governments who naively think they're going to attract jobs and thus a larger tax base. Or else if the local government doesn't play ball then Walmart builds the store just outside their jurisdiction (counties generally tax less than cities in most places). Walmart stores are always build large, they never start small and then expand if business picks up. They already know business will pick up as soon as the competition goes bankrupt. So they're willing to build the stores at a loss, even offering to pay for all city infrastructure improvements. This is not a free market.
Historically monopolies have formed and thrived when governments did not stop them. The free market forces do not prevent monopolies from forming.
So why doesn't he buy his hooks at Walmart?
Why can't local farmers use Amazon to sell their produce online, picked that morning, delivered that afternoon?
A fool throws a stone into a well and a thousand sages can not remove it.
Think about an isolated hunter gatherer society. They spend all of their time trying to survive.
Huh? Modern (e.g. 1950s) hunter-gatherers, living in lands unsuitable for agriculture, spent around 20 hours per week gathering food. How else would they have had time to develop art, culture & language while colonizing the globe? Agriculture was a huge step down, requiring ~100 hours a week until very recently. Quality of life suffered dramatically, but farming supports far greater populations, so it became dominate through military might (and drunkenness). Here, and here are some interesting articles on the topic.
Severe economic booms and busts have existed almost nonstop since the fed was created in 1913. They inflated to get us into WWI. Then they kept it up. Ever hear of the roaring 20's? That was the inflation of the bubble which has to inevitable burst which was the depression. WWII only got us out of the depression if you consider sending millions of unemployed men overseas to fight and die a good way to cure unemployment. If you look at the people in the US during the war they were still living like they were in the depression. Everything was rationed and it was horrible. The economy didn't get better until after the war ended and millions of soldiers were fired by the military.
The 90's boom was similar. The cold war ended and Clinton rightfully gut the military since we didn't need to fight the soviets. That released lots of labor to work on things people actually want. But in addition Greenspan inflated like crazy. We had this thing called the dot com bubble which is where all of the malinvestment went in the 90's and burst in 2000.
As for Barclays and the rest of the bankers should be tried and put in prison as far as I'm concerned. Fiat money, fractional reseve banking, FDIC, and legal tender laws are tools the bankers use to suck the wealth out of the producers in society.
I love Jesus, except for his foreign policy.
From the Wikipedia article you linked to:
"The Luddites were a social movement of 19th-century English textile artisans who protested ... replaced ... with less-skilled, low-wage labour, leaving them without work and changing their way of life (See "Dickens, Charles" for what life without work was like in 19th Century England)
Battles between Luddites and the military occurred at Burton's Mill in Middleton, and at Westhoughton Mill, both in Lancashire. It was rumoured at the time that agents provocateurs employed by the magistrates were involved in provoking the attacks. (Sound familiar?) ...and the present action had to be seen in the context of the hardships suffered by the working class during the Napoleonic Wars.
"Machine breaking" (industrial sabotage) was subsequently made a capital crime (Breaking a loom meriting a death sentence?!) by the Frame Breaking Act, 52 Geo. 3, c. 16[9] and the Malicious Damage Act of 1812, 52 Geo. 3, c. 130[10] – legislation which was opposed by Lord Byron, one of the few prominent defenders of the Luddites – and 17 men were executed after an 1813 trial in York. Many others were transported as prisoners to Australia. At one time, there were more British soldiers fighting the Luddites than Napoleon I on the Iberian Peninsula.
Hmm, a social movement protesting societal changes which left many to starve in the streets. This movement was met with ridiculously Draconian responses including executions and exile to Australia, and repressed with the use of more military troops against their own civilian population than were devoted to stopping Napoleon. The Draconian legal responses seem to have been specifically drafted to please wealthy company owners.
You know, I think you've got it exactly right. I think the Luddites have a lot to teach us about the times we live in.
He put his boots up on the table and made a face. "The sig," he smirked. "You can waste your life in search of the sig."
And the product variety and quality has improved dramatically every step of the way. That corner store usually and no more than 4 round steaks to choose from. Not an entire meat counter full of various sizes. They had poor quality fruit, when it was in season. Not a fruit section with fruit from all over the world all year around.
Oh, and hey, they had flys.
That kind of variety and quality doesn't come from mom and pop stores. It comes from big corporations.
But hey its a free country. You want those filthy little corner stores with limited selection, just drive 100 miles across the Mexican border. They still have them there. And the Flys too. No selection, very few products to sell. Go further down in central America, South America, Peru, Ecuador, Argentina and it gets worse still.
I don't have any experience with Central/South America, but I've spent a fair bit of time in Asia. And I'll agree with you regarding the ever-present flies, but not on any other point. The diversity of the small vendors was outstanding; while each individual vendor might have a tiny selection, there were literally hundreds of them in a market, each jostling for a niche (and somehow, my grandmother knew exactly who to go to, for the best quality stuff at any given time).
If you walked in with set ideas about what you wanted to buy at that moment, then yes -- you might not be able to find that exact thing if it was was out of season. In the street markets, if you were willing to be flexible, you'd find unusual heirloom varieties of things that might be grown only in a single village (but might have been grown there for centuries), or you'd find entire species of fruits and vegetables you never even knew existed. That's for stuff you can eat -- if you wanted gadgets and electronics, it was just as good, as long as you were near a major city (most of it's produced there now, anyway). If you knew where to look, you could find vendors in a little stall in the corner somewhere that could do custom-modded laptops builds for you right there, on the spot (and slap on an emblem for whatever brand you wanted it to "be").
In comparison, the quality of fruits of vegetables you can get in the typical US suburban supermarket is really sad. Americans do not consume enough vegetables compared to the folks over there, and I can understand why. Everything has been bred to look shiny and hygienic and perfect -- but you don't taste with just your eyes. A lot of people don't understand how much has been lost because they've never had a decent example to compare against what they're getting. And, once you discount the dozen brands of each item, the true amount of variety is really small -- for instance, all our vegetables seem to be based around maybe two dozen species that have sufficient scales of production and distribution to make them economical. Over there, it's hundreds.
If you've never had a good experience with a street market, maybe you haven't been to a healthy, vibrant one. Time's running out though -- and I can understand why. It takes time and expertise to shop in that kind of environment, and your legs get a strenuous workout in the process (maybe the change is part of why asians are getting fatter now). And yes, there's noise and flies and dirt everywhere, and the little vendors don't have the economy of scale big operations can offer. As a result, in some places the multinationals big-box stores are gradually pushing the street markets out of business (they hang on for a while, but in their declining years it can be pretty sad. Maybe that's the kind of market you've seen?)
For grocery stores, if you think shopping online is going to replace the local supermarket, you're insane and need psychiatric intervention. How are you going to buy ice cream online? Unless they do some really fast delivery, it'll be melted.
I don't know about where you live, but all of the major supermarkets in the UK provide local delivery, including Asda (Walmart). And, yes, you can order icecream and it works fine. They ship everything in vans that have a freezer compartment and the frozen items arrive significantly colder than if you'd taken them home in a car. I've done pretty much all of my supermarket shopping online for the last 5 years or so, and I know a lot of other people who do as well. The delivery charges are as low as £3, which may be slightly more expensive than driving to the shop and back, but it isn't if you value your time: you can do the entire shop online in less time than it takes most people to get to the supermarket.
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I think rather than GM or any of the other ghosts you are trying to conjure about modern food production, let us consider the tomato. That round, red, delicious looking, but tasteless, monument to food. It turns out that many years ago, through much cross-breeding (yep, good old cross-breeding), it was found a particular trait could be had with a high frequency. The trait: uniform red color even near the stem. Unfortunately, the genetics were such that it also hosed the taste. The reason was chlorophyll in the tomato. The genetics that got bred out made for lots of the stuff which turned into tasty sugars or caused them to be produced (memory fails a bit here) in the tomato. The tomato when not ripe should be nice deep green, now it is a sickly light green due to the lack of chlorophyll.
This was only recently discovered. And let's observe precisely why this inferior blob of an excuse for a tomato sold better than the one not bred for such uniform red color: the consumer. Turns out the consumer would always buy the blob rather than the real tomato even though he/she could easily taste the difference.
The lesson we observe here: GM and plain pumping for growth are not always the problem, and I very much doubt the former is at all given the studies. And the consumer is about as smart as a sack of wet mice (thank you, Foghorn Leghorn) when it comes to choosing food.