Amazon.com, the Seattle-based internet retailer, has come up with a brand new way to destroy its traditional bricks-and-mortar competitors.
Its newly-released PriceCheck App enables mobile devices such as iPhones and Droids to scan product barcodes in stores and report the result to Amazon, which then responds with its price for the same item. The new application even allows the user to buy the product from Amazon on the spot.
Last Saturday, Amazon mounted a promotion which gave the consumer an additional $5 off on products so purchased.
Traditional retailers view this new Amazon initiative as nothing less than an unfair attack upon their businesses. The idea that a consumer can stand inside their stores, scanning the barcodes of their inventory, and buy from Amazon is anathema to them.
Rich Van Tassell, the co-owner of Bay Books in San Ramon, said “We won’t be in business long if Amazon turns us into a free showroom for their customers. People need to realize that Amazon’s objective is to put physical bookstores and other traditional retailers out of business, and claim the entire market for themselves.”
The price-checking application is not the only way in which Amazon tilts the playing field in its favor. For many years it has refused to collect California sales tax from buyers, relying upon a loophole in the law that exempted them because they have no warehouse or other physical presence within California.
To preserve that loophole, they put their warehouse in Fernley, Nevada, ten miles over the state line from California. Even when the California legislature finally passed a law which the Governor finally signed, requiring their collection of California sales taxes, they managed to weasel out of it for another year by cutting a deal with corrupt California administrators. So, during the year, they evidently intend to do all possible to destroy their competition by pressing their unfair sales tax and property tax advantages as long as they can.
It is not just California bookstores that endure this unfair competition from Amazon. Amazon sells a lot more than just books. Retailers of all kinds in this state must collect a sales tax that runs up to 10% and even more on every sale, depending on the locality. They also pay property taxes on their stores, and they hire California residents as workers, and they buy goods and services at other California businesses, generating even more sales and property tax revenue for the state and its political subdivisions.
Just as egregious as Amazon’s sales tax evasion is the Kindle.
Amazon sells their proprietary e-reader below their cost, in order to lock Kindle owners into buying all of their e-books from Amazon. No other e-reading device locks its owner into buying from only one source; not the Nook, not the Kobo, not the Sony, not the iPad, not the iPhone, and certainly not people’s home personal computers.
Diane Van Tassell, the co-owner of Bay Books, puts it this way: “Yes, we sell e-books in our store. We have put in the equipment to be a WiFi 'hotspot'. We partnered with Google to bring the entire e-book inventory into easy availability for our customers whie in our store, at usually the same prices charged by Amazon. Too often, though, we find that our customer has already purchased a Kindle, or been given one as a birthday or Christmas gift; and so, they are stuck with Amazon.”
Consumers must decide for themselves whether a transitory and temporary price advantage, obtained at the cost of bankrupting our state government, our local government, and our local retailers, is worth it. They must decide whether they can bear the guilt of becoming tax-evaders themselves, because buying from Amazon amounts to personal tax-evasion according to the California “Use-tax” law.