CBA Industry Blog

Retailers oppose Amazon App Attack

Amazon’s predatory tactic to exploit brick-and-mortar stores as showrooms with an app that promises added discounts for buying from Amazon while in a store has drawn fire from the Retail Industry Leaders Assoc. and other retail associations.

Amazon’s “Price Check” app offers customers an additional 5% discount up to $5 off Amazon’s price on up to three qualifying products in eligible categories, including electronics, toys, music, sporting goods and DVDs. Amazon anticipates the Dec. 10 offer will be one of its biggest days of the year for Price Check.

Katherine Lugar, RILA’s executive VP of public affairs, said Amazon’s exploitation of a pre-Intenet tax loophole is resulting in a 6%-10% perceived price advantage over the competitors on Main Street.

“Amazon’s aggressive promotion of its Price Check App shows the lengths they are willing to go to exploit this tax loophole and is a stark reminder of why Congress needs to act to protect retailers on Main Street,” she said. “A failure to act is an implicit endorsement of a subsidy of Amazon, a subsidy that distorts the free market and puts jobs on Main Street at risk.”

CBA has joined RILA, ABA, and other associations in supporting bipartisan congressional legislation that would require Internet-only retailers like Amazon to collect and remit local sales and use taxes that brick-and-mortar retailers are forced to pay. The Main Street Fairness Act sets up a national system that streamlines collection and payment of local taxes.

See http://www.cbaonline.org/Advocacy/mainstreet.htm.

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Amazon targets brick-and-mortar in app attack

Amazon releases app that lets consumers check prices in physical retail stores in comparison with Amazon prices; offers $5 discount Dec. 10 as an incentive.

In a press release from yesterday, Dec. 6, Amazon announced their newPrice Check app and an incentive program on Dec. 10 meant to get consumers signed up and using the app.

According to the Amazon press release:

“Year-round, the Price Check by Amazon app allows shoppers to makesure a deal is really a deal. And on Dec. 10, the simple act of price checking while shopping in physical retail stores will get customers an additional 5% discount (up to $5) off Amazon’s price on up to three qualifying products in eligible categories, including electronics, toys, music, sporting goods and DVDs. Amazon anticipates December 10^thwill be one of the biggest days of the year for Price Check.

“ ‘The ability to check prices on your mobile phone when you’re in a physical retail store is changing the way people shop,’ said Sam Hall, director of Amazon Mobile. ‘Price transparency means that you can save money on the products you want and that’s a great thing for customers. Price Check in-store deals are another incentive to shop smart this holiday season.’

“In addition to these one day, in-store deals, shoppers can also start submitting in-store prices with the Price Check app, ensuring they are really getting a deal and allowing all Amazon customers to get the lowestprices year-round.

“ ‘We scour online and in-store advertisements from other retailers, every day, year-round. Now, we are enabling customers to use thePrice Check app to share in-store prices while they search for the best deals. This is a powerful opportunity for customers to get involved and ensures Amazon customers get the best possible prices,’ said Hall.

“The Price Check by Amazon app is available for iPhone and Android and can be downloaded for free from the Amazon Appstore, Android Market and App Store for iPhone. Price Check appusers can ‘price check’ using four input methods:

•  Scan a barcode: Amazon's barcode scanner will match an item and provide pricing from Amazon.com and other online merchants in seconds. One exclusive feature to the Android version of Price Check is the ability to scan in either portrait or landscape mode, making it faster and easier to find products.
• Snap a picture: Snap a photo and instantly match the picture to books, DVDs, CDs, video games and more.
• Say the product name: Speak the name of a product to return accurate product matches and pricing from Amazon.com and its other online merchants.
• Type your search: Type the product name to instantly find products and prices.”

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STL begins management buy-out from Biblica

A decision by STL Distribution’s six-member management team to buy out the company from its parent Biblica is a lot about mission as much as commercial success. President Glenn Bailey announced the decision during STL’s re-started Fall Invitational in Tennessee last weekend and several retailers voiced support for the action and ministry purpose.

Bailey said after 14 months of STL’s being up for sale and after an anticipated sale fell through recently at the last minute, Biblica leaders listened to the employee buy-out idea and asked for a proposal.

Bailey said nothing is set in stone at this point and there are no assurances the buy-out would be finalized, but an agreement is being crafted that could close by the end of the year.

“We have few illusions about operating profitably in the supply chain,” Bailey told some 50 independent retailers from about 30 companies. He said the leadership team is not naive about the difficult challenges that lay ahead for retailing, but indicated with a combined 150 years experience in the Christian supply chain the team is willing to move forward.

He pointed out an aviation adage that says you never fly with a pilot who doesn’t fear what could happen, because the fear drives preparation and protective measures.

“The management team has a healthy fear” about taking on the responsibility, Bailey said.

“We believe a healthy, competitive STL is good for the Christian supply chain,” he said. “We don’t think people want to live a world with only one large wholesale distributor.”

STL would not be a non-profit business with the change, but Bailey said the change would enable the wholesaler to be more aggressive in competition. However, he said mission is a powerful motivator and remains the company’s purpose.

“The STL management team and I believe STL has a role to help you succeed … to help you fulfill the Great Commission,” he told the retailers. He said STL started as Send the Light in the United Kingdom as an offshoot of Operation Mobilisation under George Verwer. The ministry got its name from its tradition of giving a book to people who accepted Christ as part of outreach to help bring the light to new Christians.

STL caused concern among retailers in 2005 when it first came to the U.S. and located in Georgia. At the time STL also owned a chain of Christian stores, which has since spun off and many stores were closed. The company purchased Appalachian Distributors that year. In 2007, the company merged with the International Bible Society and two years later the named was changed to Biblica.

Over the past couple of years, STL has been upgrading distribution systems and moved into a new nearly 100,000 square-foot warehouse in Elizabethton, TN. It maintains a second warehouse in Sparks, NV, to keep it competitive with shipping times, offering next-day and two-service to most of the U.S.

In partnership with Snowfall Press and Dickinson Press, STL operates a state-of-the-art print-on-demand operation that is helping optimize long-tail sales with less or no inventory, same-day fulfillment of more than 200 foreign- and obscure-language Bible translations,  and also provide custom printing services for publishers, authors, and others.

Retailers at the meeting generally were supportive and agreed with Lisa Phillips of Dalton’s Christian Store, who said, “We’re behind you.”

As part of the announcement, STL presented a new “Loyalty Plus” program with various incentives ranging from waived surcharges, improved terms and discounts, rebates, and other benefits.

The Fall Invitational was postponed for a few years but re-started this year. The event brings top independent-retail customers to Tennessee for training, product viewing, and a recreation day.

 

Bureaucrats push unionization to small shops

If there is any question that the federal government is working to make it easier for people to depend on government and tougher for small businesses to succeed, its final ruling to notify and encourage employees to form unions is another example. The current administration wants to make the U.S. more like Europe (we see how great Europe is doing) and cut off individual bootstraps. So, the U.S. National Labor Relations Board is requiring all businesses to post notices by Nov. 14 that workers have the right to form a union.

The rule means any private-sector business (with specific exclusions for the U.S. Postal Service and the government) must comply with this added government invasion into your business affairs. If you sell less than $500,000 annually or have an annual “sales inflow or outflow” of at least $50,000 (such as ordering product from out-of-state vendors) you must post the pro-union notice.

It is common knowledge that anyone can form a union. This heavy-handed practice only encourages people to try to get something for nothing. And when you’re a small business, there isn’t something to get. These types of rules made by unaccountable bureaucrats will only suppress job creation, not encourage it. We need the stimulus of individual creativity and a strong work ethic, not enabling the cultural mandate to slide by on somebody else’s dollar.

Businesses need fewer regulations, not the uncertainty that more are coming to constrain business. 

Pick up the required poster at local NLRB offices or download it here.

Read the notification.

Read the Federal Register rule posting.

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Amazon tax deal may boost Main Street Fairness

The deal Amazon.com struck with California’s Legislature last week to postpone sales tax collection and payment for sales into the state through September 2012 could spark quicker acceptance of the proposed federal Main Street Fairness Act’s administrative solution. Under the deal with California, Seattle-based Amazon agreed to collect sales taxes after the 2012 deadline unless Congress approves action on Internet sales taxes before then.

The Main Street Fairness Act is in congressional finance committees for review (in the U.S. Senate: S 1452; U.S. House: HR 2701; Find current bill status at Thomas.gov).

The Streamline Sales Use Governing Board is the agency developing the administrative process for tax collection and distribution, and has been since the 1990s.

U.S. Sen. Dick Durbin (D-IL) introduced the latest Main Street Fairness Act in July saying the act would create national standards and consistent policies so Internet retailers could collect and pay sales taxes simply and efficiently – and not have to match 50 different sets of state and local sales tax laws. Durbin told reporters national legislation is the best solution to prevent state-by-state struggles like Amazon and other Internet retailers are facing.

California is reported to have conceded to the year-long delay in tax collection required by its law that went into effect in July because Amazon was not paying the taxes, which could amount to more than $200 million during the period.

Amazon even tried to use California’s citizen initiative process to encourage residents to overturn California’s law.

Amazon had fired its local affiliates in an effort to avoid nexus and challenge California’s rules under U.S. Supreme Court rulings that exempts state sales taxes if a company doesn’t have a local presence. New York State is fighting Amazon lawsuits over similar nexus legislation. The California deal means Amazon and other Internet-only retailers can bring back local affiliates who may operate without collecting sales taxes through September 2012. California Gov. Jerry Brown has until Oct. 9 to sign the state’s AB 155 before it would pass into law without his signature.

California hasn’t officially adopted the Streamlined Sales and Use Tax Agreement. However, it would have to implement provisions of the Main Street Fairness Act to establish its collection authority. The agreement and the act are intertwined as the agreement provides uniform definitions for products, tax filing requirements, and other rules. So far, 24 states have signed the agreement, including Arkansas, Georgia, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Washington, West Virginia, Wisconsin, and Wyoming.

The proposed act would exempt small retailers. “Small” is not defined but is expected to mean those that sell less than $500,000 in annual remote sales into a state.