I recently came across a staggering article around what is deemed today as Marketplace Fairness. The 2012 International Council Of Shopping Centers had a promotional infographic regarding the following question . . . How Much Does Your Community Benefit From You Spending $100? What they found is that a local retailer was able to retain about $68 within your community. If A National Retailer moved in they were able to retain $43 within your community. However, the most silent killer of all was the online retailer who retained $0 within your community. In fact, the article went on to demonstrate that for every $1 million dollars of sales, a local retailer was able to create 4 jobs whereas an online retailer was only able to create 1 additional job. It's likely that one job isn't in your community.
Sometimes a bargain isn't always what it seems. Since online merchants aren't currently required to charge sales tax, local retailers can be at a distinct disadvantage because they do have to charge sales tax. Consequently, the price of an item (even the same item) can actually be cheaper on line (minus any shipping costs). Last year in November, the Marketplace Fairness Act was introduced into the senate by Mike Enzi, Lamar Alexander, Dick Durbin, and seven other bi-partisan Senators. These and other competing bills exist to seek to grant states the authority to mandate out-of-state sellers to collect sales tax on sales to in state customers. This is regardless of whether such remote sellers have sales tax nexus to the state. (source: salestaxsupport.com) All of this is designed to make the playing field more level. According to 21stCenturyRetail.org, there is in the nature of $23,000,000,000 of uncollected sales tax from online retailers as it stands today.
Lots of personal finance blogs exist for the sole reason of helping educate you the consumer on how to get the best price or deal on whatever you buy. How many of you remember the summer jobs you had from the ages of 14 through 17. Were they with an online retailer? Were they will a national retailer? Or, was it with a local business on main street in your town with an owner your family has known for years that took care of your kid with a summer position? The local small business is the one who sponsors the local soccer and softball teams, not the major online or national retailers. Those owners also invest in donations to the school systems so the kids can have fall festivals and spring dances.
Smart money moves come in all shapes and sizes. We know that as a country, job growth is one of the key initiatives that will bring us back to prosperity. If it costs you a few extra bucks, it just might be a good idea to make that next purchase on main street in your town rather than making it after a quick Google search. Your community is worth it!
Written by:
Ted Jenkin, CFP®, AAMS®, AWMA®, CRPC®, CMFC®, CRPS®
Co-CEO and Founder of oXYGen Financial, Inc - The Leaders in Gen X & Y Financial Advice and Services
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