It’s Prime time

Who would have thought Amazon, an American company, the largest internet retailer in the world and the eighth largest employer in the US, would be a hot button issue for the leader of the party of free market capitalists?

Amazon, like most e-commerce companies, uses the USPS as their delivery boy because that’s literally the job of the Postal Service. They deliver packages that ‘last mile’ to people’s doors. Should the Postal Service be charging more for parcel delivery? Yes, according to the person who campaigned on the economic anxiety of the American worker. However, like the tariffs on steel and aluminum the increased cost will ultimately be passed on to the consumer. So, in addition to paying more for that can of soup you will also have to pay more to ship that can of soup. Hopefully you were one of the lucky 4 million Americans who received a $1,000 bonus from the tax cut bill and can offset the additional cost.

You know who really benefited from the tax cut bill? Amazon. Thanks to the Republicans and their generosity to corporate America, Amazon netted $789M¹ when the corporate tax rate was lowered at the end of last year. Amazon collects sales tax (in all states that levy them) on products they sell directly to consumers. However, Amazon has millions of third-party sellers, most of which only collect sales tax in the states they have a physical presence².

Who are these third-party sellers who have drawn the ire of the President? The majority of them are small business owners, like independent retailers. Some may think that traditional retailers and Amazon would be unlikely bedfellows, however retailers who are willing to adapt to changing consumer needs have been able to leverage Amazon and their services to grow their customer base beyond their brick-and-mortar locations and create a national presence online.

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