STOCK TIP: Best Buy (BBY) (1 Viewer)

[DrJ]

It's also worth noting that the playing field is becoming increasingly uneven as many state and local governments look at sales taxes to reduce their deficits.

 

[sporthenry]

Reduced competition and limited consumer choice aren't always beneficial.

They're seldom beneficial. Of course, Best Buy is struggling because of increased competition and greater consumer choice, not because of reduced competition and limited consumer choice.

Some of their bigger competitors like Circuit City went out of business. Seems there's less people doing what they do today than say 5 years ago. But the main competition people are referencing here is subsidized by the government by being able to avoid charging sales taxes, which creates an uneven playing field.As that pushes Circuit Cities and Best Buys out of business, I don't see how that helps the consumer.

Well it helps the consumer now with lower prices but in the long run, it hurts them. I do agree that losing competitors will be bad especially since these lower costs provided by Wal-Mart or Amazon are only short term fixes especially once Amazon is forced to pay sales tax. But once this happens, the barriers to entry will be very high for companies like Best Buy to come back.

 

[DrJ]

Some of their bigger competitors like Circuit City went out of business. ... I don't see how that helps the consumer.

They went out of business because they were out-competed. I haven't studied the issue, but my unscientific observation is that the Internet has increased, not decreased, competition in the retail sector. (A good test for this would be whether margins have been increasing or decreasing lately. Increased competition generally means lower margins.) Staples, Walmart, Office Depot, Costco, Sears, et al. are still going strong (and even Best Buy's demise may be greatly exaggerated), but now they're joined by Amazon, Newegg, Overstock, Zappos, ThinkGeek, 1saleaday, and others.I think it would be very difficult to argue that the Internet has been bad for consumers.

I wouldn't and didn't say the Internet was bad for consumers. It's difficult to know how much different things would be without government subsidy shaping people's choices though.

 

[mr roboto]

Differentiation is good for consumers IMO. The question is, can an electronic retailer become a boutique, differentiated offering for a certain segment of the market. Coffee was basically a commodity for a long time. Starbucks created an experience around coffee. Many over saturated industries and commoditized product categories have had the me too businesses fail only to see different takes on the model thrive when businesses focused on different aspects of the service delivery.

 

[TLEF316]

Best buy throwing up a hail Mary by offering permanent price matching on everything from all their major competition (including all the big online sites) Probably something they should have done a long time ago. It's a good step to avoid "showrooming" on the larger stuff. Curious to see how generous they'll be in terms of documenting the lower price. Can I just walk in with my smartphone, scan the bar code and show the lowest price to the cashier?

 

[DrJ]

Up another .49 so far today. 17.36.

 

[DrJ]

Best buy throwing up a hail Mary by offering permanent price matching on everything from all their major competition (including all the big online sites) Probably something they should have done a long time ago. It's a good step to avoid "showrooming" on the larger stuff. Curious to see how generous they'll be in terms of documenting the lower price. Can I just walk in with my smartphone, scan the bar code and show the lowest price to the cashier?

I'm going to guess it needs to be a relatively big online site. Getting ABT Electronics to match Amazon or someone else big is cake. They start to balk when it's "Joe's TV Emporium" with a site that looks like it was designed in 1995 though.

 

[TLEF316]

They put out a list of the websites. I believe there are 19

 

[DrJ]

They put out a list of the websites. I believe there are 19

I'd guess it's probably about that easy as long as it's one of those 19 then. You can probably get them to do it without even walking into the store, either by phone or on their online chat. At least that's the way ABT works. After dealing with one sales guy that was clearly trying to job me for higher commission, I never step foot in the store until I have an agreement in place.

 

[mquinnjr]

Good move on the part of BBY here. If the state & local tax enforcement against online retailers like Amazon gains traction, I don't see how this isn't a good thing for BBY. Still taking on alot of risk in owning this stock, but at least we have an angle here for potential upwards movement.

 

[Drifter]

Good move on the part of BBY here. If the state & local tax enforcement against online retailers like Amazon gains traction, I don't see how this isn't a good thing for BBY. Still taking on alot of risk in owning this stock, but at least we have an angle here for potential upwards movement.

Amazon is actually in favor of a national sales tax and has made deals with many of the most populous states in the country to be sales tax eligible.

 

[xulf]

They put out a list of the websites. I believe there are 19

Who wants to be the first to create a website that shows all of their prices together for a looked up item.

 

[Kal El]

So, let me get this straight. Competition is good for consumers, unless some companies are better at it than others, in which case competition is bad for consumers. Is that it?

Competition should drive innovation, but some companies fail to do so, and some of the companies that fail may think that competition is bad, probably because they're sore losers.

 

[mquinnjr]

Good move on the part of BBY here. If the state & local tax enforcement against online retailers like Amazon gains traction, I don't see how this isn't a good thing for BBY. Still taking on alot of risk in owning this stock, but at least we have an angle here for potential upwards movement.

Amazon is actually in favor of a national sales tax and has made deals with many of the most populous states in the country to be sales tax eligible.

I'm sure it's just posturing the best deal for Amazon. If Amazon perceives sales tax to be a given going forward, they'll need to get best positioning possible, and I'm sure that's all this is. How they make up that margin that they didn't have to charge previously is another story. Knowing Amazon they'll figure something out, but if it means I can take advantage in a temporary bump in BBY, it's worth a look.

 

[Ignoratio Elenchi]

Good move on the part of BBY here. If the state & local tax enforcement against online retailers like Amazon gains traction, I don't see how this isn't a good thing for BBY. Still taking on alot of risk in owning this stock, but at least we have an angle here for potential upwards movement.

Amazon is actually in favor of a national sales tax and has made deals with many of the most populous states in the country to be sales tax eligible.

I'm sure it's just posturing the best deal for Amazon. If Amazon perceives sales tax to be a given going forward, they'll need to get best positioning possible, and I'm sure that's all this is. How they make up that margin that they didn't have to charge previously is another story. Knowing Amazon they'll figure something out, but if it means I can take advantage in a temporary bump in BBY, it's worth a look.

As I understand it, in order to take advantage of the tax laws, Amazon had to avoid having a physical presence in most states (e.g. they're allowed to not charge sales tax in NJ only if they don't have any physical presence in NJ). So it's sort of a good/bad thing for them. Obviously they benefit from offering sales-tax-free shopping to people and in a vacuum would prefer to continue offering sales-tax-free shopping, but they could also do great things (e.g. same-day shipping) by building out a physical distribution network throughout the country. So they see the writing on the wall re: state taxes but that comes with inherent benefits to their business model as well.

 

[DrJ]

Good move on the part of BBY here. If the state & local tax enforcement against online retailers like Amazon gains traction, I don't see how this isn't a good thing for BBY. Still taking on alot of risk in owning this stock, but at least we have an angle here for potential upwards movement.

Amazon is actually in favor of a national sales tax and has made deals with many of the most populous states in the country to be sales tax eligible.

I'm sure it's just posturing the best deal for Amazon. If Amazon perceives sales tax to be a given going forward, they'll need to get best positioning possible, and I'm sure that's all this is. How they make up that margin that they didn't have to charge previously is another story. Knowing Amazon they'll figure something out, but if it means I can take advantage in a temporary bump in BBY, it's worth a look.

As I understand it, in order to take advantage of the tax laws, Amazon had to avoid having a physical presence in most states (e.g. they're allowed to not charge sales tax in NJ only if they don't have any physical presence in NJ). So it's sort of a good/bad thing for them. Obviously they benefit from offering sales-tax-free shopping to people and in a vacuum would prefer to continue offering sales-tax-free shopping, but they could also do great things (e.g. same-day shipping) by building out a physical distribution network throughout the country. So they see the writing on the wall re: state taxes but that comes with inherent benefits to their business model as well.

So now that they've managed to milk the no sales tax thing to become as large as they are, they have other avenues to make up for it. And having someone else get to compete against them the way they made it is undesirable.

 

[sporthenry]

Good move on the part of BBY here. If the state & local tax enforcement against online retailers like Amazon gains traction, I don't see how this isn't a good thing for BBY. Still taking on alot of risk in owning this stock, but at least we have an angle here for potential upwards movement.

Amazon is actually in favor of a national sales tax and has made deals with many of the most populous states in the country to be sales tax eligible.

I'm sure it's just posturing the best deal for Amazon. If Amazon perceives sales tax to be a given going forward, they'll need to get best positioning possible, and I'm sure that's all this is. How they make up that margin that they didn't have to charge previously is another story. Knowing Amazon they'll figure something out, but if it means I can take advantage in a temporary bump in BBY, it's worth a look.

As I understand it, in order to take advantage of the tax laws, Amazon had to avoid having a physical presence in most states (e.g. they're allowed to not charge sales tax in NJ only if they don't have any physical presence in NJ). So it's sort of a good/bad thing for them. Obviously they benefit from offering sales-tax-free shopping to people and in a vacuum would prefer to continue offering sales-tax-free shopping, but they could also do great things (e.g. same-day shipping) by building out a physical distribution network throughout the country. So they see the writing on the wall re: state taxes but that comes with inherent benefits to their business model as well.

So now that they've managed to milk the no sales tax thing to become as large as they are, they have other avenues to make up for it. And having someone else get to compete against them the way they made it is undesirable.

Yet when all this first started, wouldn't Best Buy and Circuit City have had those advantages? They were bigger companies who already had distribution centers and were larger so they had more resources. These companies like Best Buy, Circuit City, Barnes and Noble or Borders only have themselves to blame. They missed the boat on the internet and paid or are paying dearly for it. What if these companies responded to the internet like Amazon did? Would we bemoan the fact that they had an unfair advantage and Amazon went bankrupt?

 

[DrJ]

Good move on the part of BBY here. If the state & local tax enforcement against online retailers like Amazon gains traction, I don't see how this isn't a good thing for BBY. Still taking on alot of risk in owning this stock, but at least we have an angle here for potential upwards movement.

Amazon is actually in favor of a national sales tax and has made deals with many of the most populous states in the country to be sales tax eligible.

I'm sure it's just posturing the best deal for Amazon. If Amazon perceives sales tax to be a given going forward, they'll need to get best positioning possible, and I'm sure that's all this is. How they make up that margin that they didn't have to charge previously is another story. Knowing Amazon they'll figure something out, but if it means I can take advantage in a temporary bump in BBY, it's worth a look.

As I understand it, in order to take advantage of the tax laws, Amazon had to avoid having a physical presence in most states (e.g. they're allowed to not charge sales tax in NJ only if they don't have any physical presence in NJ). So it's sort of a good/bad thing for them. Obviously they benefit from offering sales-tax-free shopping to people and in a vacuum would prefer to continue offering sales-tax-free shopping, but they could also do great things (e.g. same-day shipping) by building out a physical distribution network throughout the country. So they see the writing on the wall re: state taxes but that comes with inherent benefits to their business model as well.

So now that they've managed to milk the no sales tax thing to become as large as they are, they have other avenues to make up for it. And having someone else get to compete against them the way they made it is undesirable.

Yet when all this first started, wouldn't Best Buy and Circuit City have had those advantages? They were bigger companies who already had distribution centers and were larger so they had more resources. These companies like Best Buy, Circuit City, Barnes and Noble or Borders only have themselves to blame. They missed the boat on the internet and paid or are paying dearly for it. What if these companies responded to the internet like Amazon did? Would we bemoan the fact that they had an unfair advantage and Amazon went bankrupt?

Circuit City was founded in 1949, Borders 1971. Best Buy was founded in 1966 under a different name and became Best Buy in 1983. They were a billion dollar company with storefronts all over the country by 1992, before Amazon was founded. Barnes and Noble was started in 1873 as a printing company and opened their first book store in 1917.Amazon was founded in 1994 as an online book store and has avoided sales taxes by not having a local presence in most states. How were all of these companies with storefronts all over the country supposed to do the same thing exactly? They all added online ordering, but they have to charge sales taxes unless they want to shut down all of their stores.

 

[sporthenry]

Good move on the part of BBY here. If the state & local tax enforcement against online retailers like Amazon gains traction, I don't see how this isn't a good thing for BBY. Still taking on alot of risk in owning this stock, but at least we have an angle here for potential upwards movement.

Amazon is actually in favor of a national sales tax and has made deals with many of the most populous states in the country to be sales tax eligible.

I'm sure it's just posturing the best deal for Amazon. If Amazon perceives sales tax to be a given going forward, they'll need to get best positioning possible, and I'm sure that's all this is. How they make up that margin that they didn't have to charge previously is another story. Knowing Amazon they'll figure something out, but if it means I can take advantage in a temporary bump in BBY, it's worth a look.

As I understand it, in order to take advantage of the tax laws, Amazon had to avoid having a physical presence in most states (e.g. they're allowed to not charge sales tax in NJ only if they don't have any physical presence in NJ). So it's sort of a good/bad thing for them. Obviously they benefit from offering sales-tax-free shopping to people and in a vacuum would prefer to continue offering sales-tax-free shopping, but they could also do great things (e.g. same-day shipping) by building out a physical distribution network throughout the country. So they see the writing on the wall re: state taxes but that comes with inherent benefits to their business model as well.

So now that they've managed to milk the no sales tax thing to become as large as they are, they have other avenues to make up for it. And having someone else get to compete against them the way they made it is undesirable.

Yet when all this first started, wouldn't Best Buy and Circuit City have had those advantages? They were bigger companies who already had distribution centers and were larger so they had more resources. These companies like Best Buy, Circuit City, Barnes and Noble or Borders only have themselves to blame. They missed the boat on the internet and paid or are paying dearly for it. What if these companies responded to the internet like Amazon did? Would we bemoan the fact that they had an unfair advantage and Amazon went bankrupt?

Circuit City was founded in 1949, Borders 1971. Best Buy was founded in 1966 under a different name and became Best Buy in 1983. They were a billion dollar company with storefronts all over the country by 1992, before Amazon was founded. Barnes and Noble was started in 1873 as a printing company and opened their first book store in 1917.Amazon was founded in 1994 as an online book store and has avoided sales taxes by not having a local presence in most states. How were all of these companies with storefronts all over the country supposed to do the same thing exactly? They all added online ordering, but they have to charge sales taxes unless they want to shut down all of their stores.

Yes, but you make it out like the distribution centers that Amazon will now have are a huge advantage. If that was the case, then those companies should have counteracted some of the tax burden with this perceived advantage that Amazon now has by expanding its operations to more states. You seem to think taxes are the only issue which drove these companies out when they failed miserably at several points along the process. I don't think the tax issue was fair but that isn't the singular reason they failed and if Best Buy and others have such a great business model, then as sales tax is applied online, those companies should start to thrive again. Correct?

 

[Drifter]

Good move on the part of BBY here. If the state & local tax enforcement against online retailers like Amazon gains traction, I don't see how this isn't a good thing for BBY. Still taking on alot of risk in owning this stock, but at least we have an angle here for potential upwards movement.

Amazon is actually in favor of a national sales tax and has made deals with many of the most populous states in the country to be sales tax eligible.

I'm sure it's just posturing the best deal for Amazon. If Amazon perceives sales tax to be a given going forward, they'll need to get best positioning possible, and I'm sure that's all this is. How they make up that margin that they didn't have to charge previously is another story. Knowing Amazon they'll figure something out, but if it means I can take advantage in a temporary bump in BBY, it's worth a look.

As I understand it, in order to take advantage of the tax laws, Amazon had to avoid having a physical presence in most states (e.g. they're allowed to not charge sales tax in NJ only if they don't have any physical presence in NJ). So it's sort of a good/bad thing for them. Obviously they benefit from offering sales-tax-free shopping to people and in a vacuum would prefer to continue offering sales-tax-free shopping, but they could also do great things (e.g. same-day shipping) by building out a physical distribution network throughout the country. So they see the writing on the wall re: state taxes but that comes with inherent benefits to their business model as well.

So now that they've managed to milk the no sales tax thing to become as large as they are, they have other avenues to make up for it. And having someone else get to compete against them the way they made it is undesirable.

Yet when all this first started, wouldn't Best Buy and Circuit City have had those advantages? They were bigger companies who already had distribution centers and were larger so they had more resources. These companies like Best Buy, Circuit City, Barnes and Noble or Borders only have themselves to blame. They missed the boat on the internet and paid or are paying dearly for it. What if these companies responded to the internet like Amazon did? Would we bemoan the fact that they had an unfair advantage and Amazon went bankrupt?

Circuit City was founded in 1949, Borders 1971. Best Buy was founded in 1966 under a different name and became Best Buy in 1983. They were a billion dollar company with storefronts all over the country by 1992, before Amazon was founded. Barnes and Noble was started in 1873 as a printing company and opened their first book store in 1917.Amazon was founded in 1994 as an online book store and has avoided sales taxes by not having a local presence in most states. How were all of these companies with storefronts all over the country supposed to do the same thing exactly? They all added online ordering, but they have to charge sales taxes unless they want to shut down all of their stores.

Do you honestly think that the only reason Amazon has grown and is successful is because they haven't had to charge sales tax?

 

[DrJ]

Good move on the part of BBY here. If the state & local tax enforcement against online retailers like Amazon gains traction, I don't see how this isn't a good thing for BBY. Still taking on alot of risk in owning this stock, but at least we have an angle here for potential upwards movement.

Amazon is actually in favor of a national sales tax and has made deals with many of the most populous states in the country to be sales tax eligible.

I'm sure it's just posturing the best deal for Amazon. If Amazon perceives sales tax to be a given going forward, they'll need to get best positioning possible, and I'm sure that's all this is. How they make up that margin that they didn't have to charge previously is another story. Knowing Amazon they'll figure something out, but if it means I can take advantage in a temporary bump in BBY, it's worth a look.

As I understand it, in order to take advantage of the tax laws, Amazon had to avoid having a physical presence in most states (e.g. they're allowed to not charge sales tax in NJ only if they don't have any physical presence in NJ). So it's sort of a good/bad thing for them. Obviously they benefit from offering sales-tax-free shopping to people and in a vacuum would prefer to continue offering sales-tax-free shopping, but they could also do great things (e.g. same-day shipping) by building out a physical distribution network throughout the country. So they see the writing on the wall re: state taxes but that comes with inherent benefits to their business model as well.

So now that they've managed to milk the no sales tax thing to become as large as they are, they have other avenues to make up for it. And having someone else get to compete against them the way they made it is undesirable.

Yet when all this first started, wouldn't Best Buy and Circuit City have had those advantages? They were bigger companies who already had distribution centers and were larger so they had more resources. These companies like Best Buy, Circuit City, Barnes and Noble or Borders only have themselves to blame. They missed the boat on the internet and paid or are paying dearly for it. What if these companies responded to the internet like Amazon did? Would we bemoan the fact that they had an unfair advantage and Amazon went bankrupt?

Circuit City was founded in 1949, Borders 1971. Best Buy was founded in 1966 under a different name and became Best Buy in 1983. They were a billion dollar company with storefronts all over the country by 1992, before Amazon was founded. Barnes and Noble was started in 1873 as a printing company and opened their first book store in 1917.Amazon was founded in 1994 as an online book store and has avoided sales taxes by not having a local presence in most states. How were all of these companies with storefronts all over the country supposed to do the same thing exactly? They all added online ordering, but they have to charge sales taxes unless they want to shut down all of their stores.

Yes, but you make it out like the distribution centers that Amazon will now have are a huge advantage. If that was the case, then those companies should have counteracted some of the tax burden with this perceived advantage that Amazon now has by expanding its operations to more states. You seem to think taxes are the only issue which drove these companies out when they failed miserably at several points along the process. I don't think the tax issue was fair but that isn't the singular reason they failed and if Best Buy and others have such a great business model, then as sales tax is applied online, those companies should start to thrive again. Correct?

That's not what I said. Now that they have other options they are exploring which would force them to pay sales taxes and arguably offset that to some extent they're happy to have internet sales be taxable so other companies can't enjoy the advantages they have for so long. That would be undesirable to them. People are willing to wait an extra couple of days to get their stuff to save a few dollars, as demonstrated by Amazon. Obviously they'd prefer people didn't have the option to wait a couple days and get a better price than they're offering (what they were built on) as a result of them now having to charge sales taxes to get things to you sooner.I don't think that's the only issue, but it is a significant contributor to Amazon being what they are today. People were very leery of internet sales in those early days because of security and many people wouldn't even use a credit card online. Having a built in price advantage most definitely helped their cause greatly. I most definitely think it would help B&M companies be more competitive - especially those selling commodities where price is the #1 way to differentiate yourself.

 

[DrJ]

Good move on the part of BBY here. If the state & local tax enforcement against online retailers like Amazon gains traction, I don't see how this isn't a good thing for BBY. Still taking on alot of risk in owning this stock, but at least we have an angle here for potential upwards movement.

Amazon is actually in favor of a national sales tax and has made deals with many of the most populous states in the country to be sales tax eligible.

I'm sure it's just posturing the best deal for Amazon. If Amazon perceives sales tax to be a given going forward, they'll need to get best positioning possible, and I'm sure that's all this is. How they make up that margin that they didn't have to charge previously is another story. Knowing Amazon they'll figure something out, but if it means I can take advantage in a temporary bump in BBY, it's worth a look.

As I understand it, in order to take advantage of the tax laws, Amazon had to avoid having a physical presence in most states (e.g. they're allowed to not charge sales tax in NJ only if they don't have any physical presence in NJ). So it's sort of a good/bad thing for them. Obviously they benefit from offering sales-tax-free shopping to people and in a vacuum would prefer to continue offering sales-tax-free shopping, but they could also do great things (e.g. same-day shipping) by building out a physical distribution network throughout the country. So they see the writing on the wall re: state taxes but that comes with inherent benefits to their business model as well.

So now that they've managed to milk the no sales tax thing to become as large as they are, they have other avenues to make up for it. And having someone else get to compete against them the way they made it is undesirable.

Yet when all this first started, wouldn't Best Buy and Circuit City have had those advantages? They were bigger companies who already had distribution centers and were larger so they had more resources. These companies like Best Buy, Circuit City, Barnes and Noble or Borders only have themselves to blame. They missed the boat on the internet and paid or are paying dearly for it. What if these companies responded to the internet like Amazon did? Would we bemoan the fact that they had an unfair advantage and Amazon went bankrupt?

Circuit City was founded in 1949, Borders 1971. Best Buy was founded in 1966 under a different name and became Best Buy in 1983. They were a billion dollar company with storefronts all over the country by 1992, before Amazon was founded. Barnes and Noble was started in 1873 as a printing company and opened their first book store in 1917.Amazon was founded in 1994 as an online book store and has avoided sales taxes by not having a local presence in most states. How were all of these companies with storefronts all over the country supposed to do the same thing exactly? They all added online ordering, but they have to charge sales taxes unless they want to shut down all of their stores.

Do you honestly think that the only reason Amazon has grown and is successful is because they haven't had to charge sales tax?

No. Do you honestly think that it isn't a significant contributor?

 

[GoFishTN]

You realize Amazon has shipping costs, right? It's not free. B&M should have to start charging those too, so everything is fair.

 

[Drifter]

Good move on the part of BBY here. If the state & local tax enforcement against online retailers like Amazon gains traction, I don't see how this isn't a good thing for BBY. Still taking on alot of risk in owning this stock, but at least we have an angle here for potential upwards movement.

Amazon is actually in favor of a national sales tax and has made deals with many of the most populous states in the country to be sales tax eligible.

I'm sure it's just posturing the best deal for Amazon. If Amazon perceives sales tax to be a given going forward, they'll need to get best positioning possible, and I'm sure that's all this is. How they make up that margin that they didn't have to charge previously is another story. Knowing Amazon they'll figure something out, but if it means I can take advantage in a temporary bump in BBY, it's worth a look.

As I understand it, in order to take advantage of the tax laws, Amazon had to avoid having a physical presence in most states (e.g. they're allowed to not charge sales tax in NJ only if they don't have any physical presence in NJ). So it's sort of a good/bad thing for them. Obviously they benefit from offering sales-tax-free shopping to people and in a vacuum would prefer to continue offering sales-tax-free shopping, but they could also do great things (e.g. same-day shipping) by building out a physical distribution network throughout the country. So they see the writing on the wall re: state taxes but that comes with inherent benefits to their business model as well.

So now that they've managed to milk the no sales tax thing to become as large as they are, they have other avenues to make up for it. And having someone else get to compete against them the way they made it is undesirable.

Yet when all this first started, wouldn't Best Buy and Circuit City have had those advantages? They were bigger companies who already had distribution centers and were larger so they had more resources. These companies like Best Buy, Circuit City, Barnes and Noble or Borders only have themselves to blame. They missed the boat on the internet and paid or are paying dearly for it. What if these companies responded to the internet like Amazon did? Would we bemoan the fact that they had an unfair advantage and Amazon went bankrupt?

Circuit City was founded in 1949, Borders 1971. Best Buy was founded in 1966 under a different name and became Best Buy in 1983. They were a billion dollar company with storefronts all over the country by 1992, before Amazon was founded. Barnes and Noble was started in 1873 as a printing company and opened their first book store in 1917.Amazon was founded in 1994 as an online book store and has avoided sales taxes by not having a local presence in most states. How were all of these companies with storefronts all over the country supposed to do the same thing exactly? They all added online ordering, but they have to charge sales taxes unless they want to shut down all of their stores.

Do you honestly think that the only reason Amazon has grown and is successful is because they haven't had to charge sales tax?

No. Do you honestly think that it isn't a significant contributor?

It likely was at the very start but I don't think it's been a significant contributor in the last 5 years of growth and it certainly hasn't inhibited success in areas where they are paying tax.

 

[Drifter]

it certainly hasn't inhibited success in areas where they are paying tax.

It would be interesting to have access to internal numbers to see what their revenues were like pre and post charging sales tax in some of those states to see just how big of an affect it had. I live in Washington, so a lack of sales tax has never had a thing to do with why I shop at Amazon. It's cheap, really easy, and the company is awesome to deal with if anything goes wrong. Heck, they replaced a busted kindle for me that I bought secondhand.

Imagine that conversation with Best Buy.

 

[cstu]

Good move on the part of BBY here. If the state & local tax enforcement against online retailers like Amazon gains traction, I don't see how this isn't a good thing for BBY. Still taking on alot of risk in owning this stock, but at least we have an angle here for potential upwards movement.

Amazon is actually in favor of a national sales tax and has made deals with many of the most populous states in the country to be sales tax eligible.

I'm sure it's just posturing the best deal for Amazon. If Amazon perceives sales tax to be a given going forward, they'll need to get best positioning possible, and I'm sure that's all this is. How they make up that margin that they didn't have to charge previously is another story. Knowing Amazon they'll figure something out, but if it means I can take advantage in a temporary bump in BBY, it's worth a look.

As I understand it, in order to take advantage of the tax laws, Amazon had to avoid having a physical presence in most states (e.g. they're allowed to not charge sales tax in NJ only if they don't have any physical presence in NJ). So it's sort of a good/bad thing for them. Obviously they benefit from offering sales-tax-free shopping to people and in a vacuum would prefer to continue offering sales-tax-free shopping, but they could also do great things (e.g. same-day shipping) by building out a physical distribution network throughout the country. So they see the writing on the wall re: state taxes but that comes with inherent benefits to their business model as well.

So now that they've managed to milk the no sales tax thing to become as large as they are, they have other avenues to make up for it. And having someone else get to compete against them the way they made it is undesirable.

Yet when all this first started, wouldn't Best Buy and Circuit City have had those advantages? They were bigger companies who already had distribution centers and were larger so they had more resources. These companies like Best Buy, Circuit City, Barnes and Noble or Borders only have themselves to blame. They missed the boat on the internet and paid or are paying dearly for it. What if these companies responded to the internet like Amazon did? Would we bemoan the fact that they had an unfair advantage and Amazon went bankrupt?

Circuit City was founded in 1949, Borders 1971. Best Buy was founded in 1966 under a different name and became Best Buy in 1983. They were a billion dollar company with storefronts all over the country by 1992, before Amazon was founded. Barnes and Noble was started in 1873 as a printing company and opened their first book store in 1917.Amazon was founded in 1994 as an online book store and has avoided sales taxes by not having a local presence in most states. How were all of these companies with storefronts all over the country supposed to do the same thing exactly? They all added online ordering, but they have to charge sales taxes unless they want to shut down all of their stores.

Do you honestly think that the only reason Amazon has grown and is successful is because they haven't had to charge sales tax?

No. Do you honestly think that it isn't a significant contributor?

It likely was at the very start but I don't think it's been a significant contributor in the last 5 years of growth and it certainly hasn't inhibited success in areas where they are paying tax.

I've have drastically cut my Amazon purchases since I had to start paying tax.

 

[cstu]

You realize Amazon has shipping costs, right? It's not free. B&M should have to start charging those too, so everything is fair.

It also has much lower costs than B&M retailers to make up for the shipping.

 

[sporthenry]

it certainly hasn't inhibited success in areas where they are paying tax.

It would be interesting to have access to internal numbers to see what their revenues were like pre and post charging sales tax in some of those states to see just how big of an affect it had. I live in Washington, so a lack of sales tax has never had a thing to do with why I shop at Amazon. It's cheap, really easy, and the company is awesome to deal with if anything goes wrong. Heck, they replaced a busted kindle for me that I bought secondhand.

Agreed. Not that taxes don't have an issue but I doubt the consumer takes them into account that much. When you compare Best Buy's prices to Amazon's, the tax issue only comes up on the last screen. Heck, I guess I'm dumber than the average consumer b/c I've failed to take into account sales tax costs. But Amazon usually does have cheaper prices and more access to information. When you look online for a TV, those big retailers like Best Buy are rarely competitive even without taking sales tax into consideration.

 

[TenTimes]

Good move on the part of BBY here. If the state & local tax enforcement against online retailers like Amazon gains traction, I don't see how this isn't a good thing for BBY. Still taking on alot of risk in owning this stock, but at least we have an angle here for potential upwards movement.

Again, best buy has price matched for over a year now, and this new low price garuntee is actually a downgrade from the current standard.I didnt see it before but I'm starting to get it. They've somehow both limited their price match policy and created excitement about it at the same time. Impressive.

 

[Steve Tasker]

Good move on the part of BBY here. If the state & local tax enforcement against online retailers like Amazon gains traction, I don't see how this isn't a good thing for BBY. Still taking on alot of risk in owning this stock, but at least we have an angle here for potential upwards movement.

Amazon is actually in favor of a national sales tax and has made deals with many of the most populous states in the country to be sales tax eligible.

I'm sure it's just posturing the best deal for Amazon. If Amazon perceives sales tax to be a given going forward, they'll need to get best positioning possible, and I'm sure that's all this is. How they make up that margin that they didn't have to charge previously is another story. Knowing Amazon they'll figure something out, but if it means I can take advantage in a temporary bump in BBY, it's worth a look.

As I understand it, in order to take advantage of the tax laws, Amazon had to avoid having a physical presence in most states (e.g. they're allowed to not charge sales tax in NJ only if they don't have any physical presence in NJ). So it's sort of a good/bad thing for them. Obviously they benefit from offering sales-tax-free shopping to people and in a vacuum would prefer to continue offering sales-tax-free shopping, but they could also do great things (e.g. same-day shipping) by building out a physical distribution network throughout the country. So they see the writing on the wall re: state taxes but that comes with inherent benefits to their business model as well.

The issue of sales tax nexus is very convoluted and has a different definition depending on what states/local jurisdictions you're talking about. Some states have been very proactive on internet retail sales tax nexus legislation, and other states have lagged far behind. Physical presence is a determining factor, but things like mailing addresses, independent contractors, making shipments via common carrier vs. company-owned vehicles, and a myriad of other random business activities...all of those things could play a factor in determining whether a company has sales tax nexus.My personal belief is that Amazon will ultimately be on the losing end of most of their sales tax nexus arguments in the long run. They know this; the writing is on the wall, and I'm sure they've been planning for years. It's costly to continue to try to fight individual states, especially when you're inevitably probably going to lose the war. And like you said, there are certain advantages to having a presence in a state....if I'm Amazon and I think the economic advantages of being present in a state outweigh the lost sales due to having to charge sales tax, I'm conceding the sales tax argument in an instant.

 

[ScottNorwood]

MORE LIKE WORST BUY!!! LOOOOOOL

 

[TenTimes]

Do you guys who wish for the end of Best Buy not realize how many people would lose their jobs or not care? I'm actually curious.

I don't wish for their end as much as I've observed their slow motion demise over the past five years.

In what form? I wonder if the demise of best buy is exaggerated because its the fashionable thing to think. All I see every weekend is more customers than the store can handle and TVs/ computers/ tablets flying off the shelves like clockwork. There's no margain there though, its all in accessories and phones. Thats what will sink best buy if anything.

 

[Grahamburn]

I received a $25 gift card to Best Buy for Christmas.

Because I don't live close to a Best Buy store I've been on their website for the last couple hours shopping. Finally I see a thermostat that looks kind of interesting, so I go ahead and order it. Well, turns out the reviews for this thing are horrendous, so I cancel my order. Not Best Buy's fault, granted.

Now I have thermostats on my mind, so I decide to order a different one. Well, apparently this thermostat is on their website through a different company, therefore I can't use my giftcard. Huh? I'm on your website. Why can't I use your giftcard?!

No big deal. Since I've now decided I need a need a new thermostat I'll just swing in to Lowe's to pick one up on my way home.

Well, I'm already on Best Buy's website, so I figure I might as well use this damn giftcard. They have a $50 coffee pot on sale for half price right on the front page. Cool, I could use a new coffee pot. Why not? I order it and go to check out. Guess what, turns out Best Buy won't ship you the coffee pot. You have to pick it up at the ####### store! God dammit! The entire point of shopping online is so I don't have to go into the ####### store!! How does Best Buy not understand this simple concept?!

This is worse than having a gift card to the Olive Garden. Anybody want this thing?

Good luck with your stock purchases. I hope your trades pay off really well.

 

[mquinnjr]

Beat 4Q earnings and EPS estimates, up 3% so far this morning.

 

[Ignoratio Elenchi]

Still approximately at its all time low.

 

[mquinnjr]

Still approximately at its all time low.

Since 1985?

 

[Ignoratio Elenchi]

Still approximately at its all time low.

Since 1985?

Approximately.

 

[Abraham]

I received a $25 gift card to Best Buy for Christmas.

Because I don't live close to a Best Buy store I've been on their website for the last couple hours shopping. Finally I see a thermostat that looks kind of interesting, so I go ahead and order it. Well, turns out the reviews for this thing are horrendous, so I cancel my order. Not Best Buy's fault, granted.

Now I have thermostats on my mind, so I decide to order a different one. Well, apparently this thermostat is on their website through a different company, therefore I can't use my giftcard. Huh? I'm on your website. Why can't I use your giftcard?!

No big deal. Since I've now decided I need a need a new thermostat I'll just swing in to Lowe's to pick one up on my way home.

Well, I'm already on Best Buy's website, so I figure I might as well use this damn giftcard. They have a $50 coffee pot on sale for half price right on the front page. Cool, I could use a new coffee pot. Why not? I order it and go to check out. Guess what, turns out Best Buy won't ship you the coffee pot. You have to pick it up at the ####### store! God dammit! The entire point of shopping online is so I don't have to go into the ####### store!! How does Best Buy not understand this simple concept?!

This is worse than having a gift card to the Olive Garden. Anybody want this thing?

Good luck with your stock purchases. I hope your trades pay off really well.

If you are offering, I will take it. I love best buy the way my life loves Hobby Lobby.

 

[mquinnjr]

Still approximately at its all time low.

Since 1985?

Approximately.

Ok.

 

[phrozen]

Had a typical best buy experience last night. I was looking to replace my headphones and was looking for a nice pair $100 - $150 range. I see a pair in the store for $149.99 but online the price is 99.99. Okay that can make sense as maybe they have a large inventory in one of their warehouses and they are trying to get rid of them. While I was looking at them online, I saw I had the ability to pick them up at a local store at the $99 price. I walk over to one of the associates and explain the situation and she said that they can't take the $50 off of the price. I explained again, they are $99 online and I can pick them up for this very store at that price. No dice, they wouldn't budge. Just walked out because of the stupidity. Best Buy is the suck

 

[GroveDiesel]

Had a typical best buy experience last night. I was looking to replace my headphones and was looking for a nice pair $100 - $150 range. I see a pair in the store for $149.99 but online the price is 99.99. Okay that can make sense as maybe they have a large inventory in one of their warehouses and they are trying to get rid of them. While I was looking at them online, I saw I had the ability to pick them up at a local store at the $99 price. I walk over to one of the associates and explain the situation and she said that they can't take the $50 off of the price. I explained again, they are $99 online and I can pick them up for this very store at that price. No dice, they wouldn't budge. Just walked out because of the stupidity. Best Buy is the suck

Why didn't you walk over to one of their computers, make the purchase, then walk directly back to the same associate and tell them you were there to pick up your online order?And FWIW, sounds like they screwed up. Pretty sure they changed their policy a while ago to price match their own online store.

 

[Sarnoff]

Pretty sure they changed their policy a while ago to price match their own online store.

The fact that they needed to change their policy so they could price match their own website is telling

IIRC, there was a lawsuit/scam situation settlement a while back about this. Best Buy had a "fake" online store that the computers inside the B&M store would call up when a customer claimed "it's cheaper online". They'd go to something like 'best-buy.co', which was a mirror image of the online page, except all the prices reflected what stuff was marked in-store. The dude in the blue polo would then claim he's "matching our online price" while also "implying the customer's a lying idiot". Of course, it was a really stupid thing to do because the customer would just check again from home and catch on to the ruse.Once word got out on the intertubes, though, they had to change their policy.Edit: link

 

[Ned]

Pretty sure they changed their policy a while ago to price match their own online store.

The fact that they needed to change their policy so they could price match their own website is telling

 

[cstu]

Do you guys who wish for the end of Best Buy not realize how many people would lose their jobs or not care? I'm actually curious.

I don't wish for their end as much as I've observed their slow motion demise over the past five years.

In what form? I wonder if the demise of best buy is exaggerated because its the fashionable thing to think. All I see every weekend is more customers than the store can handle and TVs/ computers/ tablets flying off the shelves like clockwork. There's no margain there though, its all in accessories and phones. Thats what will sink best buy if anything.

Best Buy relies on the under-informed/impatient customer - as far as I can tell those people aren't going away.

 

[phrozen]

Had a typical best buy experience last night. I was looking to replace my headphones and was looking for a nice pair $100 - $150 range. I see a pair in the store for $149.99 but online the price is 99.99. Okay that can make sense as maybe they have a large inventory in one of their warehouses and they are trying to get rid of them. While I was looking at them online, I saw I had the ability to pick them up at a local store at the $99 price. I walk over to one of the associates and explain the situation and she said that they can't take the $50 off of the price. I explained again, they are $99 online and I can pick them up for this very store at that price. No dice, they wouldn't budge. Just walked out because of the stupidity. Best Buy is the suck

Why didn't you walk over to one of their computers, make the purchase, then walk directly back to the same associate and tell them you were there to pick up your online order?And FWIW, sounds like they screwed up. Pretty sure they changed their policy a while ago to price match their own online store.

The process to do in store pickup is no walk in the park. I used it a couple of months ago to purchase a microSD card for my tablet. Placed the order and went to the store 30 mins later to pick it up. Got to the counter and no one was there. Someone finally came over and took a look at my confirmation printout. Looked for the card and it was not there. They then went and picked up the card themselves and brought it to me.Pretty effective process there

 

[Tackling Dummies]

Here's what the new CEO, Hubert Joly, said Friday during the earnings conference call, via a transcript provided by Seeking Alpha.

"In fiscal '13, we permanently closed 49 large-format stores and expected to close an additional 5 to 10 large-format stores in fiscal 2014."

link to Best Buy article

Best Buy earning report/conf call

Not dead. Yet.

 

[gandalas]

I received a $25 gift card to Best Buy for Christmas.

Because I don't live close to a Best Buy store I've been on their website for the last couple hours shopping. Finally I see a thermostat that looks kind of interesting, so I go ahead and order it. Well, turns out the reviews for this thing are horrendous, so I cancel my order. Not Best Buy's fault, granted.

Now I have thermostats on my mind, so I decide to order a different one. Well, apparently this thermostat is on their website through a different company, therefore I can't use my giftcard. Huh? I'm on your website. Why can't I use your giftcard?!

No big deal. Since I've now decided I need a need a new thermostat I'll just swing in to Lowe's to pick one up on my way home.

Well, I'm already on Best Buy's website, so I figure I might as well use this damn giftcard. They have a $50 coffee pot on sale for half price right on the front page. Cool, I could use a new coffee pot. Why not? I order it and go to check out. Guess what, turns out Best Buy won't ship you the coffee pot. You have to pick it up at the ####### store! God dammit! The entire point of shopping online is so I don't have to go into the ####### store!! How does Best Buy not understand this simple concept?!

This is worse than having a gift card to the Olive Garden. Anybody want this thing?

Good luck with your stock purchases. I hope your trades pay off really well.

If you are offering, I will take it. I love best buy the way my life loves Hobby Lobby.

I will paypal you $15 for it?

 

[Grahamburn]

I ended up ordering a different coffee pot, but I'll never shop there (website or in store) again. If I happen to get another gift card I'll re-gift it.Suck it, Best Buy.

 

[Eminence]

How do you feel about Olive Garden futures?

This is worse than having a gift card to the Olive Garden. Anybody want this thing?

Seriously, why do you guys keep mentioning Olive Garden? I work there. Are you watching me?Best Buy stock is now sitting at: $18.75.

It was $15.29 when I started this thread and $11.57 when I first advising people to buy it.

 

[Gator Shawn]

How do you feel about Olive Garden futures?

This is worse than having a gift card to the Olive Garden. Anybody want this thing?

Seriously, why do you guys keep mentioning Olive Garden? I work there. Are you watching me?Best Buy stock is now sitting at: $18.75.

It was $15.29 when I started this thread and $11.57 when I first advising people to buy it.

Would it be safe to say it is still at an all time low?

Approximately.