I rail against the incompetence of the big publicly traded companies as loudly as anyone, however, I have to scratch my head at the notion that small, mom and pop owned businesses are inherently superior, or somehow critical to our continued existence. Some small businesses offer a better value proposition than the big guys – many don't. It seems to me that, sooner or later, big or small, the business offering the most for the money prevails and the rest fall by the wayside.
So along comes Amazon with 'Price Check' and I have a very hard time understanding just how it can be anything but good. Price Check basically enables a shopper to instantly compare the price someone is asking for something with the price Amazon and their third party sellers are asking. That knowledge, apparently, will be the end of local retailing as we know it. It seems to me that, if mom and pop's business model depends on making sure their customers don't know they can find a better deal elsewhere, mom and pop are pretty much doomed.
There is nothing too shocking about two-faced politicians, but it strikes me as hoot-worthy to read Senator Olympia Snowe describe 'Price Check' as "an attack on Main Street businesses that employ workers in our communities." Just a few weeks ago she was touting the Small Business Innovation Research Program, waxing about how innovation creates jobs. Apparently the size of the company doing the innovating has a lot to do with it. Little guys who innovate should get government funding, while big guys who innovate should feel the full wrath of the U.S. Senate … figure that one out. In the foreword to a book called 'Saving Energy Growing Jobs' the good Senator wrote, "The key to helping business thrive and nurturing a healthy environment is innovation, which has been the bedrock of this nation's growth since its inception." Innovation at Amazon is somehow exempt from that lofty principal it would seem.
The objections of the 'Main Street Retailers' seem to follow two lines. First they claim Amazon is using them as the showroom for folks who will waste their time looking at stuff, then run home and make the purchase on line. Seems just as likely to me that people will use the web as the research lab to check stuff out, then run out to the local store to buy what they want. As fast as on line shopping is growing, in store purchasing still dominates.
The real gripe has nothing to do with Price Check and that is the exemption on line purchases have from sales tax – and the local retailers see Amazon as the greatest ogre in that battle. Maybe Amazon customers ought to pay sales tax and maybe not. Interestingly (and inconsistently) enough Senator Snowe co-sponsored the Permanent Internet Tax Freedom Act of 2007 before she declared Amazon to be so abusive of Main Street mom and pop retailing.
Rather than whine about Amazon and urge higher sales taxes on their competitors (and as a result, their customers), mom and pop might want to learn from Ron and Steve Fusek. Ron runs Fusek's True Value Hardware – as mom and pop as it gets. His boy Steve runs spinoff Ron's Home and Hardware – an Amazon seller. Turns out the Fusek boys don't too much care if you want to use the store as a showroom and buy on line, or if you want to do the research on line and buy in the showroom. Want to avoid the sales tax by ordering on line? OK by them. Don't mind paying it and want to avoid shipping costs and get it yourself? OK by them as well. In fact, the Fuseks will sell you hardware any way you want to buy it.
Opposition to Amazon's 'Price Check' is ridiculous. No one can make a case for keeping customers in the dark. The more information buyers have the better for all concerned – all concerned except for sellers offering a lousy deal. The honorable Senator, it would seem, is foursquare in favor of innovation and against Internet sales taxes, unless it threatens a bunch of 'stuck in the past' retailers in Maine, then she is a born-again Main Street advocate.
The mom and pop retailers – as well as the mom and pop manufacturers, restaurants, farmers and service providers – who want to preserve lousy value propositions through legislation and PR campaigns to tug on heart strings will sooner or later fail. It is usually an indictment of lousy prices, service, quality and convenience when people would rather do business on line or with big bureacratic national chains than them. They are whistling past the graveyard if they think people would rather pay shipping costs and wait days to get things for the sole purpose of saving a few percent on sales tax.
The good mom and pop's needn't worry about Price Check – it will merely confirm that they are the right place to make the purchase.
Mark Graban says
Amen. Not sure which is worse – companies (big or small) who run to the government for help instead of being competitive and innovative… or politicians who pander for votes by claiming to “protect jobs” or “create jobs.”
Andy Wagner says
On a Saturday afternoon when I discover last minute that I am missing something I need for a project around the house, I don’t order online and wait for next week. I don’t drive 30-minutes each way to Home Depot or Lowes. I go to my neighborhood hardware store. I know they cost a little more–a little, but I also know that they have specialize stuff the big guys don’t and that they are close and helpful.
Sometimes it pays to pay more.
Dan Markovitz says
When I worked at Asics, we had to deal with channel conflicts between running stores and mail-order. (This was before the interweb.) Many of the brick & mortar stores complained that they couldn’t compete with a mail-order company that cut prices $5 below MSRP.
Our feeling was that if a local retailer couldn’t add $5 of value to the customer when interacting with them in the flesh, they probably weren’t very good at meeting customer needs. And in fact, the complainers went out of business, and those that didn’t because they provided real value, thrived.
You simply can’t slow down mobile technology and the consumer empowerment that has resulted from it. The market is exploding with free mobile consumer apps for scanning UPC barcodes and researching products while you shop.
It won’t be long before someone develops a Google Maps app that allows you to key in or scan a UPC barcode and it identifies all stores (across multiple retailers) in the vicinty of the consumer’s location that have the item in stock and the price for the item.
On line retailers collect the same sales tax as local retailers – they collect the state and local sales tax where they are located. If the local retailers want “fairness” then they should have to reques the zip code of every customer and send in tax forms and payments to the customers home state and city. Thats what they expect Amazon to do – so why not them?