Amazon beat brick and mortar retail, but it was not a fair fight. Here's how they did it: 1. They didn't charge sales tax while brick and mortar retail did. Amazon argued that they were not the responsible party for the collection of sales tax. Stupid government, perhaps,
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distracted by the fulfillment centers Amazon was building in their states, agreed. This was colossally stupid. It makes zero sense to ask small business 3rd party merchants on Amazon to collect and remit sales tax to 40+ different states. It's an accounting nightmare from hell.
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Meanwhile Amazon was charging sales tax on the subset of their goods. They could've easily collected and remitted sales tax on behalf of 3rd party sellers as they do now (Supreme Court basically agrees with me here). This whole time brick and mortar retail was paying sales tax.
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This made products sold on Amazon artificially cheap. It caused states, during a huge revenue and pension crisis to get shafted out of tons of revenue. They brought it on themselves, the idiots. 2. Intellectual property. This is a problem that our government still has yet to fix
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. Amazon has a huge advantage in this regard. Amazon, by again saying its not their responsiblity, lets billions of dollars of IP infringing merchandise flow through their platform. They get away with this because "they don't own the inventory" sellers (mostly in China) do.
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Meanwhile, brick and mortar retail cannot sell ip-infringing merchandise because they own the inventory adn there's a vetting process that is many times more diffiuclt thatn what 3rd party sellers go through to sell on Amazon.
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3. This is the most disgusting one. Product liability. When you buy something on Amazon jfrom a 3rd party seller and that something blows up in yoru face or causes you to lose an eye or whatever, you get fucked, but amazon doesn't. If you were to buy the same product from walmart
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you'd get a nice thick check from the insurance company which insured the goods. Not so on Amazon! Pardon my french, but that's fucked up. So yes, did Amazon spank retail's ass? Of course, but did they play fair? No. That's why Amazon is the master of the legal but unethical.
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So, sorry to break to you, it wasn't just "prime" or Bezos being a genius. Yes, he's super smart and strategic (as you can see here!), but there's a lot of bullshit going on behind the scenes that makes it easy for Amazon to beat the brick and mortar competition (for whom I have
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no love lost). Walmart and Amazon both get teh same subsidies from government to open stores (or FC's) and they boht lobby. They play teh same games. Walmart sent manufacturing jobs to China. Amazon did the same and then added insult to injury by moving wholesalers and brands to
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China. It's staggering how deaf our government has been to these nagging problems that not only hurt brands, hurt consumers, but also deny them of the gov't tax revenues that they so desperately need. /end
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