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  • it_all_goood it_all_goood Feb 20, 2013 9:35 PM Flag

    Sales Tax impact on Amazon

    Interesting article. Assumes that Amazon has a 75% share of online retail in CA. With CA collecting $89 million in taxes it suggests that sales are about 7.5% of Amazon sales. Even though CA has 11% of US wealth. The article suggests that sales tax is having an impact in CA.

    I think he is wrong, because I still shop on Amazon. I still worry more about shipping charges over sales tax.

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    • "I think he is wrong, because I still shop on Amazon. I still worry more about shipping charges over sales tax.

      Ok, where is your analysis, just based on your experience he is wrong?

      All these issues, bby, TGT, WMT price matching, sales taxes finally getting implamanted are having huge impacts on AMZN as we speak. AMZN is already making losses and these losses will increase, but all longs and the analysts are staring into the headlights.

      • 2 Replies to kenji100
      • Just based on personal opinion. I use amazon because it has great selection. Most alternative sources have less selection. Brick and mortar stores definitely have less selection and other online merchants have a smaller selection and will still charge sales tax as well. So Amazon still wins.
        However I see a slowing growth trend which could hurt the share price. But from my view of the chart the support level is 220 assuming it breaks through 240 relatively fast. At 220 this stock is more reasonably priced. I am not a holder, just waiting.

      • Absolutely more and more headwinds on an up on air stock. The ultimate fall could be hard. However, I covered my recent shorts including one from when this went green today. I certainly didn't get greedy covering at 264.30 but pocketing a nice chunk of change in a few days is not too bad either. I'll be back in soon enough on the short side.

    • The underlying economics depend upon the value density. Tax has a much bigger impact on large ticket items than low value items. Shipping has a much bigger impact on low value density items. Wait until calpers gets active here and forces Amazon to collect on FBA as well...

      Lots more Prime members now. Despite mental midget analysts treating Prime as such, it isn't equivalent to costco's membership stream which has no incremental cost and a well designed and effective selection bias. This will prove to be much more of an achilles heel than anyone understands today...

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