Posts
144
Joined
5/18/2010
Location
Brick, NJ, USA
Edited Date/Time
3/27/2013 5:02pm
Are you for or against online sales tax?
I've owned my own retail business for almost ten years and I for one, support it. I admit, I haven't really done any in depth research on the matter, but from my side, I'm 100% for it. I'm sure some of the respones here will shed some light my way on the other side of it.
As the owner of a small brick and motar motorcycle shop that does roughly 1,000,000 per year, margins are TIGHT. A million sounds like a lot, but once you factor in payroll (2 to 6 employees, depending on the season) taxes, insurance, inventory, rent, utilities, ect, there's not a lot left. As a nameless poster, I will say I make more doing this than I ever did doing concrete or working as an employee at a shop. I don't see myself making over 70,000 per year anytime soon, but I do pretty good considering I work 50 to 60 hours per week for about 9 months out of the year. I sometimes wish for a regular 40 hour per week schedule and a set salary.
Back to the subject, I find it VERY difficult to compete with online stores sometimes. I like to think we make it by on customer service. But it would be nice if the big online guys had to add an extra 5% to 8% sales tax into thier price, like we do. Here's an example. If you buy a Dunlop MX51 110/90-19" or 110/80-19" from us, we pay, as a dealer with a pretty good discount, $80.00. That's our cost (rounded up to the nearest dollar). If I price it at $10.00 over cost, which is what we do, and add sales tax, we are MORE than what you can buy from Rocky Mtn or another online store. So that would be cost+$10.00 plus tax equals close to $96.00. If you pay with a credit card (or debit ran as a credit) it takes 2% to 4% off of that, so we make roughly $7.00 or so. This is what I sell them for and I still hear the occasional "You're too expensive", or "You're raping me on the tires BRO!".
If you put the exra tax on online, it would at least level the field somewhat, almost double my already weak margins. Another example is a set of wheels. Some of you won't believe it, but an extra 5% to 8% would help us out a ton. On a recent set of wheels I sold that matched the online price out the door, it was roughly $800 to the customer. After cost of product, shipping, and then lowering the price an extra $180 to match the already rediculous online price, I took off an extra $50 because I had to charge tax, but now I can offer it to the customer at the same as online price. The customer paid with a credit card (an additional 3%) I ended up with roughly $25 in profit on an $800 ticket. Lame. It could have been $75 if the online guys had to add tax.
Sorry if I sounded like a whiner, I have no reason to cry too loudly from my soap box. I've been doing it for close to 10 years, and I know that's the way the business world works sometimes. We've made it every year and will continue to do so in the future. Sometimes we do good, sometimes we dont'. And some of you against the tax might say I only want it because I'm a greedy business owner and I would use the money to go buy a new pair of Gaerne SG-10's and maybe a down payment on a new 450. Well, you are correct. hahaha
I've owned my own retail business for almost ten years and I for one, support it. I admit, I haven't really done any in depth research on the matter, but from my side, I'm 100% for it. I'm sure some of the respones here will shed some light my way on the other side of it.
As the owner of a small brick and motar motorcycle shop that does roughly 1,000,000 per year, margins are TIGHT. A million sounds like a lot, but once you factor in payroll (2 to 6 employees, depending on the season) taxes, insurance, inventory, rent, utilities, ect, there's not a lot left. As a nameless poster, I will say I make more doing this than I ever did doing concrete or working as an employee at a shop. I don't see myself making over 70,000 per year anytime soon, but I do pretty good considering I work 50 to 60 hours per week for about 9 months out of the year. I sometimes wish for a regular 40 hour per week schedule and a set salary.
Back to the subject, I find it VERY difficult to compete with online stores sometimes. I like to think we make it by on customer service. But it would be nice if the big online guys had to add an extra 5% to 8% sales tax into thier price, like we do. Here's an example. If you buy a Dunlop MX51 110/90-19" or 110/80-19" from us, we pay, as a dealer with a pretty good discount, $80.00. That's our cost (rounded up to the nearest dollar). If I price it at $10.00 over cost, which is what we do, and add sales tax, we are MORE than what you can buy from Rocky Mtn or another online store. So that would be cost+$10.00 plus tax equals close to $96.00. If you pay with a credit card (or debit ran as a credit) it takes 2% to 4% off of that, so we make roughly $7.00 or so. This is what I sell them for and I still hear the occasional "You're too expensive", or "You're raping me on the tires BRO!".
If you put the exra tax on online, it would at least level the field somewhat, almost double my already weak margins. Another example is a set of wheels. Some of you won't believe it, but an extra 5% to 8% would help us out a ton. On a recent set of wheels I sold that matched the online price out the door, it was roughly $800 to the customer. After cost of product, shipping, and then lowering the price an extra $180 to match the already rediculous online price, I took off an extra $50 because I had to charge tax, but now I can offer it to the customer at the same as online price. The customer paid with a credit card (an additional 3%) I ended up with roughly $25 in profit on an $800 ticket. Lame. It could have been $75 if the online guys had to add tax.
Sorry if I sounded like a whiner, I have no reason to cry too loudly from my soap box. I've been doing it for close to 10 years, and I know that's the way the business world works sometimes. We've made it every year and will continue to do so in the future. Sometimes we do good, sometimes we dont'. And some of you against the tax might say I only want it because I'm a greedy business owner and I would use the money to go buy a new pair of Gaerne SG-10's and maybe a down payment on a new 450. Well, you are correct. hahaha
I have opinions on a national tax for online sales but it has nothing to do with the reasons you mentioned.
I feel that is a very good idea to impose a higher tax on online retailers. Although ironically i am one of the people who buy on line !
How can you afford to give your customers top notch service with such slim margins?
You need to make a fair profit so you can support yourself and your employees.
Look at the areas with reasonable profit potential.
Might just be labor and last minute items like oil, battery's handlebars, chains and sprockets.
Stock a few popular sizes of tires and tubes.
There may be a potential for impulse items like plastic and graphic kits.
Charge full retail. don't budge.
Encourage your customers to buy thing like wheels tire etc online.
Explain to them that you are actually losing money on those items (given your above example you are) and that you don't begrudge them for purchasing items online.
Some will understand and some will not.
I know you didn't ask for all this but as someone who has been there, this is your only hope.
The Shop
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I don't know if this same philosophy would work in a bike shop or not but it sounds like maybe it's not worth it to knuckle under to the cheapskates.
Old Fart's arguement is rather amusing considering some stuff going on down here in the Carolinas.
The state was pursuing Amazon to build a distribution center so they floated the idea of a sales tax exemption. However it was never a firm commitment.
Amazon started construction.
Then a "grassroots" organization started running ads opposing the exemption.
Amazon stopped construction and threatened to pull out.
The state backed off and commited to the exemption.
All is well.
Then it comes out that the "grassroots" organization was actually formed and funded by WALMART.
If margins are so thin that Walmart is scared of a competitor getting un unfair exemption, how can a small business owner possibly compete?
I'm a business owner so I know how difficult it can be. The most difficult aspect for me is not being able to shut off my mind. I'm thinking, analyzing and planning almost every waking hour of the day whether I'm at work or not. There are always the fires that need to be put out too. My wife and I took a vacation to Hawaii and a major work problem arises on the way to the airport. I spent the first two days of our vacation in our hotel room working. My wife was breathing fire but there was nothing I could do about it. There’s no such thing as "time off".
The most expensive part of running a business is employees, period. It sounds like the online shops have an advantage of low employee overhead. That’s tough to compete with although it’s not the end of the world. You have the advantage of customer service which is something they can’t compete with.
Stick with it. Ten years is a great accomplishment.
Talk about something whizzing right over somebody's head.
If Walmart, with their reputation for low overhead and thin margins, has to fight a competitor getting a tax exemption is that not a solid indication that it is not just a matter of doing it better/cheaper/faster?
It is not a level playing field.
You are correct that it should be about better/cheaper/faster., not about cutting the best deal with government at the expense of small business owners.
About the sales tax. That's gets mixed reviews from me, no easy answer. I always try to buy local first. As a business owner, I understand the importance of it and never complain about paying a reasonable amount more to do so. But there are things such as poor quality service, lack of inventory and refusal to get what I want( see the poor service comment) that often times blow it for the local guy. Some businesses just don't give a shit and it shows.
I bought something locally a few years back that was going to end up with a large amount of sales tax on it. Considering what it was, I felt that was an inappropriate amount of tax to pay for a small item regardless what it sold for. Kind of like expecting a rich person to pay 500 times more income tax than an individual who makes a small portion of what he does.
There are a lot of tax laws that could be considered unfair. There are industries that get special tax breaks which other businesses (such as mine) do not. My girlfriend is the accounting manager at a fire prevention company. I don't know exactly how much of their operations is financed by the taxpayer, but I do know a portion of it is not. However, they're classified as a government business, and because of that, they pay zero taxes. Not sure what the requirements are to be considered a government business, which might be worth looking into. I do know some of the things they do compete directly with private business, so they have what I'd consider an unfair advantage.
I'm of the mindset to level the playing field, but not by increasing taxes. Personally, I'd rather do the opposite...decrease them for everyone. Unfortunately, our society is of the mindset to ask the government to do more instead of less, so the costs roll downhill and hurt private sector business.
You make my arguement for me with "Everybody has to pay to play".
Pit Row
F Walmart! In 10 or 15 years they will leave a huge worthless crappy vacant building, the town will be stuck with it. F Walmart!
It's the second-to-last number on the invoice.
"nonexistent"-try not paying it.
Way better meats and the employees are actually friendly.
Here is why I am totally for sales tax on mail order things. Customer walks in looking for a pair of boots. The boots cost $400.
Your price is roughly $440 with sales tax. On line price $400 not hard to get free shipping on $400. The only service involved is either seller getting the right size, color, and delivered in a reasonable manor. It is not fair to you to have to compete like this just cause they can't figure out how to collect the tax or who gets it.
He doesn't want to be made to feel guilty that he goes into a B&M store, checks out a product and then goes home to order it online to save the sales tax. We all think you're guilty oldfart. You aint gettin away with it.
And for the guy above talking about "showcasing" (where a person walks into a store to check prices, then goes home and orders online), what's wrong with that? Hell I do it all the time. And consumers are crazy if they don't.
What the F is wrong with covering your ass before making a purchase? Am I to spend extra and "buy local" out of pity?
Holy shit. You bed wetting punters are out of your minds.
this is what our country has become....
"Here are a bunch of made up numbers that I can use to claim that I know what I'm talking about, even though I neither understand the subject nor have the capacity to read and understand anyone else's point.
Bueller? "
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