Gaining a Supply Chain Edge
Jim Tompkins

Online Sales Tax Bill: How Does it Click with Amazon's Long-term Strategy?

Retailers, both online and brick-and-mortar, have been closely watching new legislation being debated in Congress.

Recently, the US Senate passed the Marketplace Fairness Act, which requires online retailers generating more than $1 million in “remote” sales to collect sales tax in the state where they ship their orders. The bill is gathering some rare bipartisan steam and will soon go to the US House of Representatives for a vote.

The bill is not perfect, of course, and is likely to be widely dissected and debated. A number of businesses contend that the costs of compliance will be overly burdensome. What are your thoughts on the proposed online sales tax? Will it affect your business?

The interesting thing, to me, is to view this development through the “Amazon Effect” and “Amazon Cure” lens. It’s really a step that CEO Jeff  Bezos has long anticipated. As another example of Amazon’s remarkable retail and business strategy, they began preparing for an online sales tax bill some time ago.

Amazon is now able to position itself so that its competitive advantage continues to be solid. Knowing that a national sales tax would be likely to exist in the future, Bezos made operational decisions to create local fulfillment centers near their customer bases. Same-day delivery is Amazon’s goal with these e-fulfillment centers, showing that they understand customer preferences.

Amazon does the four pillars of retail success right: They bring customers great prices, awesome selection, best-in-class convenience, and a great experience. Same-day delivery puts Amazon ahead of the game, and their long-term strategy, whether an online tax bill is passed this year or not, shows that things are falling into place for their continued success.

Amazon is everyone’s competitor, regards of your industry. Considering the long-term planning that Amazon has in place for now and in the future, do you have a strategy to compete? For more on how Amazon gets it right – succeeding with long-term thinking and supply chain strategies – watch this video.

TAGS: Supply Chain
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