Smaller merchants who sell products with Amazon, craving more leverage, are beginning to join the newly founded Online Merchants Guild. As the threat of states levying back taxes on past sales looms, merchants, likely to be easier targets than Amazon, are hoping that a group such as the Online Merchants Guild will give them the lobbying power they need to thwart such legislation.
Amazon has successfully lobbied against sales tax obligations for years, and states are beginning to focus their attention on merchants to, under proposed laws, report, collect, and remit taxes for sales in any jurisdiction. This becomes a concern with merchants who use Amazon’s own fulfillment network, which creates potential tax liability in a number of states since Amazon has control over where inventory is stored. Merchants, to date, have unsuccessfully argued that Amazon should bear the tax responsibility as a result. The tax burden may ultimately be too great for many smaller merchants to bear and the idea of the collective voice (and collective bargaining power) that the Online Merchants Guild offers should be attractive to many.
Organizing for greater power over Amazon is another goal. Though Amazon offers merchants an attractive one-two punch of an enormous customer base and a gigantic distribution network, as it stands, Amazon calls the shots with fees and terms with merchants because, well, they’re Amazon. Having a more prominent seat at the table may be the bargaining chip the smaller merchants need.
A platform such as this may ultimately empower Amazon merchants to execute their own direct-to-consumer initiatives. Many who don’t have the means or resources to do so can look across a new network such as the Online Merchants Guild to others in the same boat. It’s not inconceivable to imagine non-competitive merchants sharing the cost of a shared mailer, for instance.
These recent developments – both the threat of ecommerce sales tax report and the formation of the Online Merchants Guild – may have a very significant impact on ecommerce selling.
