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Fri Oct 21 2011 16:14:48

Amazon Tests International Surcharge and New Tax Codes Appear

By: Ina Steiner

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Amazon has begun displaying a table of tax codes that sellers must choose from in order to list products on the site. We've got a query in to Amazon.com to find out more - sellers said they weren't happy that this was sprung on them with no warning.

In addition, Amazon is testing a change to its shipping credit policy for qualifying international book shipments. Amazon will charge buyers an additional $6 for any book weighing one pound or more that is shipped internationally from the U.S. - and Amazon will credit the full $6 to the seller to help cover the costs of international shipping.

In an email to sellers, Amazon wrote, "We hope that this additional shipping credit will encourage sellers to make more books available to international buyers, and we will evaluate whether to extend this test based on both Seller and Buyer response."

Amazon gives Marketplace sellers only a part of the fees it collects from buyers for shipping costs, and because of the way it displays shipping fees, buyers are unaware that sellers are not receiving the full amount. (See this 2005 article to understand the convoluted fee structure.) Not only that - when postage prices rise, Amazon.com does not necessarily increase the reimbursement to sellers.

Some readers forwarded me the letter, and others are discussing on the Amazon boards.

The good news for sellers is that they will receive an additional $6 to cover their shipping costs on international orders.

The bad news is that buyers may either object to paying the extra fee, or worse, may blame sellers for the new fee. Sellers were hopeful that if they received negative buyer feedback as a result, they would be able to get Amazon to remove it.

One seller wrote of the decision, "Amazon has reached the point that no one making decisions like this has ever sold anything on Amazon." What do you think - good news for sellers or bad?




Comments (13) | Permalink

Readers Comments

Amazon Tests International Surcharge and New Tax Codes Appear   Amazon Tests International Surcharge and New Tax Codes Appear

by: Jim S

Fri Oct 21 18:45:03 2011

Sounds the eBay deja vu. Did JD secretly move to AZ?

Amazon Tests International Surcharge and New Tax Codes Appear   Amazon Tests International Surcharge and New Tax Codes Appear

This user has validated their user name. by: Ming the Merciless

Fri Oct 21 21:05:48 2011

Corporations make changes to benefit themselves.

If by chance the change also benefits their customers, so much the better. But most do not.

If the change harms one or more segments of their customer base (Amazon sellers are also Amazon customers -- a concept which seems nearly impossible for The Ho and Jeff Bezos to understand.), well, that's just business.

Tech corporations seem congenitally unable to adequately ciommunicate with their customers. I suspect the reason is that they tend to hire inexperienced smartass teenage MBAs instead of those with experience in retail sales.

It's ebafiafication of Amazon.

OCCUPY SAN JOSE EBAY.

Amazon Tests International Surcharge and New Tax Codes Appear   Amazon Tests International Surcharge and New Tax Codes Appear

by: ebazon

Sat Oct 22 05:47:40 2011

ebay imitating Amazon  
Amazon imitating ebay

Time to start shopping around for another site just in case everything turns into ebazon

Amazon Tests International Surcharge and New Tax Codes Appear   Amazon Tests International Surcharge and New Tax Codes Appear

by: anyone out there

Sat Oct 22 09:40:18 2011

I'm not sure if Amazon is trying to be like Fleecebay or Fleecebay is trying to be like Amazon.

Give it a few more quarters and the truth will probably be known.

Amazon and Fleecebay are under the covers together.

Amazon Tests International Surcharge and New Tax Codes Appear   Amazon Tests International Surcharge and New Tax Codes Appear

by: Rich

Sat Oct 22 16:31:37 2011

Selling on the internet is less and less profitable as more and more people sell more and more items.  Also not helping is government regulations and taxes.  In addition Ebay has gone downhill due to bad policy and now Amazon appears to be making the same mistake with this one.  As huge corporations pay less and less taxes, the middle class will get crushed harder and harder and this now is impacting internet sales.  Not just due to taxes but due to the jopining together of government with big business but not with small business

Amazon Tests International Surcharge and New Tax Codes Appear   Amazon Tests International Surcharge and New Tax Codes Appear

by: Red Ink Diary This user has validated their user name.
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Mon Oct 24 00:34:22 2011

Ming I think in this case you need to Occupy Seattle. Take a raincoat and umbrella, maybe Wellie boots too.

Is Amazon forcing sellers to sell internationally?

Amazon Tests International Surcharge and New Tax Codes Appear   Amazon Tests International Surcharge and New Tax Codes Appear

by: Jonathan

Mon Oct 24 10:35:55 2011

Switched from eBay to Amazon 3 years ago... over the past year Amazon seems to want to be like eBay... more and more glitches and poor seller customer service.  India customer support is wrong half the time....

Amazon Tests International Surcharge and New Tax Codes Appear   Amazon Tests International Surcharge and New Tax Codes Appear

by: johngermaine

Mon Oct 24 11:01:18 2011

Amazon is starting to sound a lot like evilBay. When they start telling YOU how YOU have to run YOUR business, then it is no longer YOUR business and it's time to leave. I run my store, and outside of selling illegal items, it's NONE of their business who I sell to and where I sell to or how I get paid! People need to stand their ground and say NO, or they will run over you just like evilBay did. Leaving IS an option, there are lots of places to sell your wares these days, just look around and you will find them.

Amazon Tests International Surcharge and New Tax Codes Appear   Amazon Tests International Surcharge and New Tax Codes Appear

by: Independent Seller
Web Site

Mon Oct 24 13:56:00 2011

Nothing Amazon does these days suprises me anymore. Sales have been miserable in the last few months, and Amazon makes a big noise but there is little to see. When Amazon starts selling books for me I'll be happy. Otherwise, it's all part of the show. I stopped posting links to anywhere else on my site. If people still want to shop on Amazon they are welcome to do so, but they'll just have to copy down the titles and search like everybody else. I'm not helping my competitors out anymore. I would suggest that others do the same.

Amazon Tests International Surcharge and New Tax Codes Appear   Amazon Tests International Surcharge and New Tax Codes Appear

by: mindelec This user has validated their user name.

Mon Oct 24 19:55:07 2011

well it's a start, still doesn't really cover any book over a pound and a half, unless that book will fit in a flatrate envelope.  the problem is when some international buyer orders a heavy art book and expects it to ship for that price.

i might try it, but don't think i will be too interested in selling internationally on amazon until they give me the ability to reject those purchases without penalty to my account.

Amazon Tests International Surcharge and New Tax Codes Appear   Amazon Tests International Surcharge and New Tax Codes Appear

This user has validated their user name. by: Tula

Tue Oct 25 12:43:49 2011

@Ming says: "Corporations make changes to benefit themselves."

Well, duh! Of course they do! They're in business to make money. If their expenses go up, those expenses are passed along to the consumer. Same with corporate taxes. It's all part of "cost of goods sold", so the buyers are the ones eventually footing the bill for all of it. That's why I always shake my head when I see people clamoring to raise taxes on companies, since all that does is raise prices for the rest of us.

An article I read recently indicated some concern about how thin Amazon's margins are, so I'm not surprised at any moves they make to increase revenue. Of course I don't necessarily like that as a buyer or a 3rd party merchant, but that's how business works. It's the same as with any other selling venue. If you can't make a profit when you sell on a venue, then either you're not managing your business properly or the venue is the wrong place to sell that item. No business will last long if they sell items for less than their total cost.

Amazon Tests International Surcharge and New Tax Codes Appear   Amazon Tests International Surcharge and New Tax Codes Appear

This user has validated their user name. by: Tula

Tue Oct 25 17:04:14 2011

Heh. Given today's Amazon financials, looks like that article was right to question Amazon's margins. The analysts on CNBC are blaming it on slower sales in the higher-margin categories and higher shipping costs (hey, someone has to pay for free shipping).

Amazon Tests International Surcharge and New Tax Codes Appear   Amazon Tests International Surcharge and New Tax Codes Appear

by: TB

Wed Oct 26 18:42:26 2011

The big news to me is that Amazon will now provide a mechanism to collect sales tax. I'm guessing most people are not paying their share of sales taxes on this, because I've never really seen any kind of outcry about this subject. If you get audited by your state, you WILL pay back taxes plus penalties plus interest.

But Amazon screwed it all up. It should have been a mandatory feature. If I'm selling Widget A in California, and my competitor is selling Widget A in California, what advantage would I have in signing up for this (and PAYING extra for the "privilege"!)? I would instantly lose ALL of my sales. If it were mandatory (as it should be... it's the law), the playing field would be slightly more leveled.

I know exactly what will happen. NOBODY will sign up for this, and Amazon will go "See? We tried it and nobody wanted it?".

I hate to say this, but this is one thing that E-Bay got right over Amazon.

Oh by the way, I know everyone would not like to pay sales taxes. But the law is on the books. If you don't like it, get the laws changed. Simple as that.



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