Amazon Sales Tax Is Imminent

Tom Webb at the Pioneer Press reported that the Minnesota is reaching the end of an era when it comes to sales tax collection for online purchases. It was a good run, but it’s coming to an end July 1st, when the “Save Best Buy and Target from Amazon” bill becomes law.

I decided to look at my own exposure under this change to get a feel for how many meals my daughter is going to need to miss so I can maintain my Amazon habit. The state tax rate is 6.875%. How does that translate?

I looked up my recent purchases on Amazon. It turns out that I’ve spent $5,068 in the past 6 months on 180 transactions. When Carly says that it feels like an Amazon box arrives at our house every day, she’s actually understating the situation.

$5,068 * 6.875% = $348.42

Will I change my buying behavior over less than $1.90 per day? Am I going to start driving to Target to buy what I buy on Amazon today? No. Here’s why:

1. My actually tax exposure is far lower than that. Why? Because a lot of the stuff I buy on Amazon is tax exempt, such as baby diapers, baby food, baby clothes, adult food, adult clothes, and books.

2. Price competitiveness. The last hardware purchase I made on Amazon was for a kitchen faucet. Home Depot sells it for $349 with free shipping. Amazon sells the same faucet for $61.78 cheaper and ships it twice as fast for free. And, which site do you think provided better customer reviews to decide whether it was a faucet worth purchasing?

Best Buy doesn’t carry my favorite earbuds in their stores, but they do offer them online for 30% more than Amazon. Best buy takes 6-9 days to ship them (with no option to ship them faster) while Amazon ships in 2 days for free.

Richfield-based Best Buy has been particularly hurt by competition from online rivals, and this has led to layoffs and store closings. On Tuesday, CEO Hubert Joly noted that 50 percent of the U.S. population will soon live in states where Amazon’s no-sales-tax advantage will disappear.

This is a real-world example of sales tax not being the problem. Best Buy doesn’t carry what I’d like to buy, so they kick me out to a 3rd party site to buy what I want for 30% more than Amazon charges. I suppose this allows Best Buy to maintain the margins they’re aiming for while losing the sale.

Seriously, check this out:

Screen Shot 2013-05-22 at 10.40.41 PM

Screen Shot 2013-05-22 at 10.41.25 PM

Best Buy and Amazon are both selling the same product from Accessory Genie. Amazon charges $6 less and delivers in two days. Best Buy charges $6 more and delivers in 6-9 days. Even with sales tax, Amazon crushes Best Buy by $4.62 and 4-7 days on this product, and people can throw some Mac & Cheese into their shopping cart before checking out. Best Buy CEO Hubert Joly’s sale tax comments may temper a few frustrated shareholders but haven’t swayed this informed consumer.

3. Long tail. It turns out that I buy quite a few things on Amazon that aren’t stocked by big parking lot stores. For example, a 1lb bag of chamomile tea from Croatia.

Maybe I’m an outlier, but based on my purchase behavior I don’t think this new sales tax does much to level the playing field against a company that sells a ton of tax exempt products, has lower prices, faster free shipping, and a far larger inventory than our local big parking lot stores.

Perhaps that’s why Target’s year over year sales grew by 1% while Amazon’s grew by 22%?

As I see it, this may increase my costs by around $10/month, but the benefits of shopping Amazon over big parking lot stores are still obvious to me.

If Target or Best buy borrowed the Byerly’s online model, that might interest me. Byerly’s has online ordering with online payment and drive-up pickup. As in, you never have to enter the store. Just drive up and they’ll load your car up with what you purchased. That’s convenient. In fact, it’s more convenient than postal packaging. Moms with a carload of kids would love this. Under the status quo, Amazon will continue to chip away at Target and Best Buy with or without sales taxes.

Target CEO Gregg Steinhafel’s Continued Anti-Gay Funding

Target took a beating at their annual shareholder meeting from shareholders who think the big box retailer should focus on selling stuff rather than discriminating against gay people. Target’s CEO Gregg Steinhafel actually reached a white flag raising point of asking for questions on ANY issue other than the issue he brought onto himself last year when the company funded MN Forward in order to buy television ads in support of Tom Emmer, a documented gay rights bigot.

Now, one would think that if Gregg Steinhafel was truly sorry for his company’s choice to fund TV advertising for a bigoted candidate, his actions would align with his words. But, check this out:

Gregg Steinhafel's Bigoted Political Funding

That’s a Q1 2011 donation to Rep. Erik Paulsen. And, where does Erik Paulsen stand on gay rights issues? He’s had a chance to vote on one as a member of congress:

Erik Paulsen's Bigoted Vote

After the MN Forward blow-up, Erik Paulsen voted in favor of continued discrimination against gay members of the United States Military. Within months, Gregg Steinhafel chipped an additional $2,400 to Paulsen.

Erik Paulsen has also received the support of religious bigot, James Dobson, who’s a big fan of Erik Paulsen’s anti-marriage equity stance:

[Dobson] continues, “For another, Erik Paulsen believes that the institution of marriage is worth protecting, and he helped lead the effort in the legislature to pass a constitutional amendment to preserve marriage as the union of one man and one woman.”

I’ve gotta give Gregg Steinhafel credit. Not many people are willing to claim to be neutral on civil rights for gay people while simultaneously giving thousands of dollars to elected officials who are actively working to take away rights from gay people. That’s a level of hypocrisy that few people can tolerate while sleeping at night.

Do Target Stores Tax Our Law Enforcement Resources?

John Farrell left an interesting comment on my post over at MinnPost about Target and shoplifting:

On May 10, 2011, John Farrell says:
Ed,

Target isn’t better at catching shoplifters. The reason they have so many marks on the police report is that Target calls police and prosecutes every single shoplifting incident, at enormous public expense. Furthermore, they have more shoplifters because they are simply the largest retail presence in Longfellow.

You might want to read some of the material from my colleague Stacy Mitchell on the cost of big box retailers. Their use of police for every minor crime serves their bottom line, but often not the community’s best interest.

Interesting perspective. I picked up a copy of Stacy Mitchell’s book, Big-Box Swindle, (on Kindle to my phone via Amazon, which may be a “big server” rather than “big box” situation) and plan to read it on vacation.

To me, it seems likely that Target actually would be better at catching shoplifters than other stores due to their superior technology and economies of scale on security. And, can I blame a store for prosecuting those who shoplift?

More once I’ve read Mitchell’s book.

NPR on Target’s Urban Stores

Last night, NPR ran a piece about Target and WalMart’s new store layouts used in some urban locations. One mentioned is in the Uptown area of Chicago, which appears to be similar to the downtown Minneapolis store’s layout (2-story with parking underneath, corner entrance).

Regarding a Target with a more traditional layout in the Columbia Heights neighborhood of Chicago, a Target customer shared this thought:

“I love Target; I’m not going to lie,” she says.” I’m in there every week. But they’re soul stealers from communities like these. … I mean, look at this. Does this have any spin, any flavor, any style by any criteria?”

If WalMart is the retailer people love to hate, is Target the retailer people hate to love?

@HRC, @Target, @BestBuy, @MNForward & @TomEmmer

HRC, the damn fine group that works to provide equal rights for lesbian, gay, bisexual and transgender folks, has found itself dragged into the Minnesota political scene due to Target and Best Buy’s choice to donate money to MN Forward, who’s using Target and Best Buy’s money to fund political ads in support of the non-GLBT-friendly, Tom Emmer.

Earlier this week, Target and Best Buy both put out press releases defending their support of their donations to MN Forward by saying it’s just business. Just business to support an anti-GLBT candidate. The head scratcher, of course, was that the same two companies boasted about their perfect 100 scores from Human Rights Campaign.

The Awl’s Abe Sauer seemed to think it was rather odd that a company could simultaneously boast of being perfect on HRC’s inclusiveness scale, while contributing hundreds of thousands of dollars indirectly (though clearly targeted) to a candidate who stands for the opposite set of values.

As Sauer explains it, HRC’s scorecard hasn’t taken the political contributions of corporations into account when grading businesses. This is one heck of a loophole:

Worse than shooting itself in the foot though, HRC has mired itself in PR relationship quicksand that threatens the good work it actually does. Target and Best Buy rely on HRC to legitimize them and in return they repeatedly cite HRC’s endorsement, thus legitimizing its rankings in the national media.

As I understand it, the issue here appears to be that HRC hasn’t caught up with the changes coming out of the Citizens United Supreme Court Ruling. Now that companies like Target can financially influence elections through ad buys, HRC is going to need to adjust their criteria.

This appears to have caught HRC off guard. However, they are getting around to reacting to it. Take a look at HRC’s homepage today:

HRC.org's Website Explaining Target Best Buy

Yes, that’s a big fat alert overlay welcoming visitors to HRC.org. Suddenly, Target and Best Buy’s political donations have become the most important issue on the HRC’s plate.

It’s great to see the HRC adjusting to the new corporate funded political climate of 2010. People who care about GLBT issues trust that the HRC will give them good information on which companies are great workplaces, and great places to shop. Figuring that out has become more complex, but HRC will surely be up to the challenge of helping their 750,000 members and supporters make the best choices they can based their interests.

Target Target’s a Breastfeeding Mother

The whole “Target target’s” thing was ripped straight from the first 10 seconds of the story out of Detroit:

I dig that FOX went with the breastfeeding shots in their story.

Since this story was about a mother, the comments immediately degraded into the typical hell hole mothering debate. An anonymous commenter fired the first shot with:

I am a mother myself and this is ridiculous! Take the 5 minutes and go to the restroom….stop trying to get a lawsuit.

And they were off to the races, with a response 6 minutes later from a commenter named Chrissy:

Take 5 minutes and go to the restroom? Would you eat your lunch in a room filled with toilets full of stuff people shat out? She was feeding a baby, plain & simple. There should be no shame in that.

And on and on and on they go. 626 comments so far.

Review: On Target: How the World’s Hottest Retailer Hit a Bull’s-Eye

I’ve started reading the 2003 book, On Target, which takes a glowing look at how Minnesota’s favorite big box chain retailer came to be what it is today.

Clearly, a book with the subtitle, “How the World’s Hottest Retailer Hit a Bull’s-Eye” is going to present the company favorably at every opportunity.

So far, the writing has come across as elitist and mean to me. For example,

“Wal-Mart, which is the nation’s largest seller of apparel, may have Target in its crosshairs, but for the down-home discounter to actually compete on Target’s turf would take a cultural and image revolution – one that would risk alienating its traditional customers, who are far more interested in saving hard-earned money on toilet paper and snack food than seeking a Mossimo tee to pair with Armani slacks, or a Michael Graves toaster to complement a stainless steel Sub-Zero refrigerator.”

The author does seem to capture the Target culture with that spin.

In my opinion, Target’s specialty is their ability run up women’s Target credit cards by convincing them to measure their self-worth based on whether their napkins are in season, or what their can opener says about them as a person, rather than focusing on saving a few bucks on household staples.

Target’s iPhone Application Solves Problems

Target's iPhone Application

I don’t know about you, but I’ve found that the best way to buy gifts is to pull random ideas out of a hat. Be sure to think about what to buy before you think about who you’re going to give it to. Or, something like that.

Which makes me excited to see Target’s new iPhone application that lets you shuffle through random gift ideas from the big box retailer.

Give it a shake to see some Targetized snow globe action followed by a gift idea that you can click to buy right from your iPhone. Impulse buying random crap while stuck in traffic has never been easier.

via Cariann

Weekend Highlights

Here are two of the funniest local blog posts I’ve read this weekend:

Doodledee points out that – you can’t make this up – Target ran an ad saying “eat well. pay less.” (no caps ’cause they’re trend forward or something). In this ad, they feature what kind of “eat well” products?

– Ice cream
– Chocolate Sauce
– Pizza
– Potato Chips
– Bottled Water

Thanks for the cheap diabetes, Target.

Bill from Lazy Lightning decided to NOT throw his newly arrived yellow pages at the company that delivered it (it was a Burnsville, Lakeville, Apple Valley Verizon Yellow Pages so that would be my “friends” at Idearc Media in Eagan). Instead, he took an even more radical step: He opened it!

And what did he find? Ridiculously outdated business listings. Restaurants that haven’t existed for more than a year. So it’s not even valuable for people who decide to use it. Pathetic.

Target’s New Editorial Role at the StarTribune

If Target is powerful enough to get the largest newspaper in the state to pull comments on a story about their return policy, should I expect a knock on my door from red-shirted, khaki wearing enforcers?

Brian Lambert outlines the mystery of the disappearing Target comments on Nick Coleman’s column yesterday:

So what happened Thursday (yesterday) after Nick wrote a column about a 79 year-old Irish lady getting brusque treatment at a Plymouth Target? Well, by mid-morning something like 350-400 comments had piled up. Some were the usual suspects, accusing Nick of orally gratifying commie pedophiles, but a lot of the others were voicing their complaints about Target and its return policy. (The elderly Irish woman was returning a couple shirts and wanted $30 back … in cash.)

Some kind of nerve had been touched, which in the old days was a sign a columnist had done a good day’s work.

But then … poof … gone … all comments on Coleman’s Target column disappeared.

Target (aka. Walmart of the Midwest) used to pay kids to say nice things about them. And now we’re seeing “disappearing” critical comments on a StarTribune column.

Accentuate the positive?

Decentuate the negative?

Workin’ it from both ends.

What’s not clear is whether Target was directly involved in the StarTribune’s decision to pull comments regarding Target’s return policies or whether the StarTribune took it upon themselves to make their master proud. Regardless, The Deets is much less dependent on Target advertising revenue so don’t expect to see the StarTribuning of The Deets anytime soon.

Target Rounders is Dead

For what it’s worth, Target Rounders program died a quiet death two weeks ago:

Target Rounders is Dead

Maybe the dialing down of their misguided “Accentuate the Positive” strategy is what’s causing the new focus on decentuating the negative?