Monday, September 5, 2011

Response to O'Reilly's Opinion on Internet Sales Tax

Article here:

My first company was an internet retail business, so I feel I have an experienced eye on the industry from the "little guy's" perspective.  Here are my $0.02.

1) O'Reilly seemingly has no experience in administering AR (Accounts Receivable) for an online retail.  Even on a small scale organizing finances for sales tax by county for only a single state is a monumental task with a ton of oversight required, especially for a public company.  It's all well and good to say "these guys have built scalable processes for handling mundane tasks before, they can just do it again", but in practice it's an entirely different story.

And more importantly...

2) Even if amazon could pull it off with a huge multi-million dollar investment in software and ongoing recurring expenses beefing up human resources, the smaller vendors won't be able to.  These are the same "local" businesses that O'Reilly is hoping to shield from the big, bad, Amazon.  These same local businesses are the people setting up online stores with larger reaches than when they started, and the national sales tax would shut them down before they can get off the ground.  If anything it would extend the barrier to entry of small market retailers hoping to set up an online presence vs already entrenched and well capitalized businesses, like Walmart and Amazon, who may be able to withstand the bloated HR depts and clunky enterprise software the tax would require everyone to use.

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