Amazon: Inventory Costs vs. Sales Tax
But why did Amazon prefer to translate the sales tax to their customers? Wouldn’t this additional cost affect its competitiveness and make Amazon lose market share to brick-and-mortar retailers?
The answer is NO, Amazon started collecting the sales tax in California on September of 2012 and the impact hasn’t been significant. A study from Wingo points out that one of the factors for not seeing an impact is because one third of Amazon’s total sales come from third-party sales which not all of them collect California’s sales tax
What weights more over Amazon’s strategy, having their inventory as close as possible to their clients or reducing the final price of the products through fewer taxes?
Is this Amazon’s strategy of bringing distribution centers closer to customers one which the company will also try to follow as it increases its global approach? Or in a global perspective and while doing business abroad other factors must be considered?