retail news in context, analysis with attitude

by Kevin Coupe

Interesting couple of stories that shed some light on Amazon's continuing evolution…

• The Wall Street Journal reports that as of last Friday, there were more customers in the US eligible to pay sales tax on Amazon purchases than not. It happened when new laws compelling the collection of state sales taxes by Amazon went into affect in Connecticut, Massachusetts and Wisconsin, meaning that "163 million Americans in 16 states will have to pay tax on their diapers, books and other goods on Amazon."

According to the story, "Amazon continues to fight sales taxes, but its position has softened. The company supports a bill that would apply an online sales tax nationwide, in order to level the playing field with e-commerce rivals who don’t have affiliates.

"But Amazon is challenging the rules in New York, where it has collected the levies since 2008, and hopes to have its case heard before the U.S. Supreme Court. In Minnesota and Missouri, it recently cut off local partners who may have triggered a sales tax under new ordinances."

• The Seattle Times reports that Amazon "disclosed Friday that it ships more than twice as many items to members who use its Prime subscription service in the United States than to those shoppers who opt for free shipping."

The story notes that Amazon usually is "opaque" about prime, which guarantees two-day delivery to customers who pay a $79 annual fee.

According to the piece,"To be sure, it’s not particularly precise data point, since the company would only say the units, not dollar amounts, shipped using Prime are twice the number as those sent via its free shipping offer. What’s more, Amazon racks up plenty of sales of items for which consumers opt to pay for shipping. Still, the detail about how much more Prime members shop offers insight into Amazon’s strategy to add more features to boost enrollment in the program."

It strikes me as an interesting confluence of stories … and, I think, it speaks to Amazon's broader strategic objectives. In the end, while Amazon deals with things like having to collect sales taxes and raise the minimum purchase for free two day delivery (as reported here recently), the e-tailer continually pushes to add value where it can, especially through its highly effective Prime program that rewards best customers. Which is something that all retailers ought to be doing.

It's an Eye-Opener.
KC's View: