I have lost some big sales in other states because of ‘Amazon Laws’ in the past few years.
Its an amazing thing that happens when your cost of doing business in a state goes up by 10%. (Michigan will be 6%) You lose customers, they pay more, or you eat the costs. The first option is of course the worst of the three, but when profit margins range between 15-20%, 10 points represents at least HALF the profits, and can be discouraging to even attempting to sell.
California has some of the most used shipping ports, so its natural that many warehouses are located there. It also has quite a large population. Our business has historically sold more to California customers, than those in Michigan. But a few years ago, I was notified by one of my suppliers who drop ships for me in that state, that unless they had an exemption form on file for the customers, they would have to charge an additional 10% for the product to cover THEIR tax liability; CA Sales tax being 8% and an additional 25% tax for assumed mark-up.
I had a choice. I could in some cases ship product all the way here, then ship all the way back, and salvage a few pennies, OR I could simply find a supplier for similar product in other state warehouses willing to ship to California. The unnatural commerce that had to evolve (and quickly), wound up raising the cost of doing business. It raised the cost and in some cases slowed service for the customers in California who were STILL expected to report their ‘USE tax.’
(23)Nuh Uh.
(2)
