Supreme Court Clears Way for Internet Sales Taxes

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Thomas Smet said:
Will people really go this far just to avoid paying sales tax?
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What's "far"? And you do still pay the sales tax, you just get an instant rebate applied to the purchase that covers it. You get their card to make your purchases on there, they pay your state their sales tax(which is a win for everyone) and you effectively do not pay the sales tax(by way of an instant rebate applied to your purchase equal to the amount of the sales tax). No fee to get or keep the card and as long as you understand that the card carries a rather large 29.99% interest rate, what's the big deal? Most cards for people even with great credit are upwards of 15% - 20% and higher. One of the reasons I never carry a balance.

If you are the type of person, like me, that pays your accounts off in-full every billing cycle, it's win-win. Your net purchase is minus the sales tax amount and your state still receives its sales tax. We pay 7% sales tax here, which is nothing to sneeze at on large purchases and some states are over 10%. Say you need to buy some new lights that total up $3K and you live in a state that has a 10% sales tax. That's $300. So would you rather pay $3300 total for those lights or would you rather pay $3000 total AND your state still gets that $300 in sales tax? What's the old saying, "A penny saved is a penny earned"?
 
Thomas Smet said:
Will people really go this far just to avoid paying sales tax?
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I wouldn't. I'll still buy from B&H just for convenience over driving to LA, dealing with traffic and parking to pay either the same price or higher plus sales tax. In a way, this is great as others posted, California gets it's pound of flesh, you never have to worry about being audited by the Franchise Tax board and getting stung for not paying your out of state sales tax and for those who have GAS and buy a lot of gear, they are actually getting a good deal although it's a trap for those who don't pay it off monthly.

I'm ratcheting down my own GAS, the only major purchase for 2019 so far is a monitor for my gimbal and that's simply because I can't see the XT-3 screen in bright daylight and have actually missed some good opportunities to get clear, well exposed and in focus shots on two different shoots. It won't make me any more money but it is necessary to be able to use gear I already have and get a result that is usable.
 
Run&Gun said:
...Say you need to buy some new lights that total up $3K and you live in a state that has a 10% sales tax. That's $300. So would you rather pay $3300 total for those lights or would you rather pay $3000 total AND your state still gets that $300 in sales tax? What's the old saying, "A penny saved is a penny earned"?
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But who pays for that $300? The dealer. That's a big chunk out of already small margins. How long is that sustainable? Seems to me that over time, if others follow suite, the cost of items will slowly creep up and we're be back to where we started.

"A penny saved is a penny earned, and then a penny spent"
 
I'm ratcheting down on the GAS too. Starting 2019 forward I don't plan on buying much else until it is necessary as in 8K. I plan on selling most of my possessions and getting a studio

I was trying to figure out how this works for B&H. They must figure that with the interest and fees associated with the payboo card that it will offset what is basically a discount to the buyer?
A $5000 purchase in my state will have $500 worth of tax once they start in July. That $500 is significant.
So if I have the payboo card I pay $5500 but instantly get the $500 back. If I pay my payboo bill without ever carrying a balance then they won't get any interest from me. So they only stand to gain whatever markup there is in the merchandise and whatever arrangement they have with Syncrony bank not forgetting transaction fee(s). Doesn't sound too great for B&H unless....
...if someone buys $5500 worth of gear and then pays it out over time at 29.99%.

So for me it would still be good to buy from them as the only thing I'd be losing is the rewards money I got from using my Visa in the past.
I imagine B&H anticipates losing a LOT of out of state online orders and this payboo card is an option to try to help their situation. Probably a ton of people all over the country buy from them and could stop or at least cut way back. What else can they do?
Just some thoughts...
 
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stoneinapond, believe me, you don't have to worry about B&H making the tax payment. They are still profiting from your purchase! So they don't make 20% from your deal, they make 13% (STILL BOTTOM LINE PROFIT)!!! So yes, they'll take a small hit to KEEP your business. I'll get the Payboo card to keep purchasing from B&H. I too (as other have stated) pay for my purchases in FULL each month!!!
 
stoneinapond said:
But who pays for that $300? The dealer. That's a big chunk out of already small margins. How long is that sustainable? Seems to me that over time, if others follow suite, the cost of items will slowly creep up and we're be back to where we started.

"A penny saved is a penny earned, and then a penny spent"
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I wouldn't worry about B&H one bit. This wasn't something concocted and thrown together in an afternoon by a few low-level employees. The prevailing thoughts are that B&H isn't paying the normal transaction/merchant fees(or at least as much) with this card and that Synchrony is covering 10%, like a "rewards card". The money is coming from the same place that it does with most other cards: INTEREST. Maybe not from someone like me who pays a card off every month, but there are enough people who carry balances and pay interest that it's worthwhile to the bank and merchant(had this talk with a dealer yesterday who says it's usually like 70% of people carry a balance). Even if it did cost B&H a few percentage points of profit, it's probably MUCH better than what they stand to lose(or have lost) since the sales tax collection started.

A lot of people across the internet seem to be really freaking out over this and not in the way that you would think. If it ends up not being sustainable long-term, it'll go away and we'll be back to where we were two days ago, so not really out anything. So take advantage of it while it's here. As long as the customer understands the terms, no one involved is being hurt.(the state gets their money and you can believe that B&H isn't doing it for a loss).
 
firehawk said:
I'm ratcheting down on the GAS too. Starting 2019 forward I don't plan on buying much else until it is necessary as in 8K. I plan on selling most of my possessions and getting a studio...
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So many questions.

1. Do you really think 8K will ever become necessary?
2. Necessary for your own GAS or necessary because you think you'll have clients will either want or demand that you acquire in 8K? When do you think that may happen?
Will they pay the premium for the all of the extrapolated support that goes with shooting such a unnecessary, ridiculous sized raster? I mean besides camera, you have increased costs and hassle media, storage and archival media, faster editing system, high resolution monitors, better hair, makeup, props, sets, production design? Most importantly, time. I already get way bogged down just when shooting 4K DCI Cinema RAW Light for clients who need to take possession of media during the shoot. I can only imagine how long it would take to download 8K RAW or even lightly compressed footage?
3. You're going to sell most of your possessions to buy a studio? What kind of studio? To what end? Is your plan sound from a business perspective? What are you selling? Like cars, real estate, stocks or just a bunch of stuff laying around? Production gear or other type stuff?

Inquiring minds want to know! ;-)
 
I hope 8k doesn't become necessary. I like shooting 4K for 1080 delivery but that's as high as I wish to go. But when/if clients start requiring more then I'll have to supply. Otherwise I'd like to stick with my current gear as long as I can. I've had some big GAS spells in the past but got it under control now (isn't that what addicts say, too? :laugh:)
I've decided that the more stuff you have the more hassle it causes and everything falls apart and eventually goes back to dirt anyway. So for the last stretch of my life I want to get rid of everything that can't be used for my business and ministries such as real estate, vehicles and anything else.
Had a simple studio before my crooked ex business partner stole my money and lost it.
Last big purchase will be another one. Need a chroma set, space for group meetings, safe parking for production van etc.

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Regarding this payboo situation: Unless other online retailers implement something similar I can see B&H having an advantage in future online sales. If a consumer can save ~6-10% buying from B&H over others that is pretty good incentive to buy from there. That is assuming the consumer knows about B&H in the 1st place. If they don't then they may now be more inclined to buy locally than online, if there is a local store. Or if the hassle of going to the local store outweighs buying online.
 
They can't just drop their margins by ~6-10% and continue "business as usual", they just wouldn't survive (not that I care a lot, apart from the fact that they have the best online site and I visit it very often to check technical specs like the filter size of a lens or the weight of a camera).
Either enough people carry balances and pay interest to make the operation self-sustainable, or they'll increase prices in general, which means there's a cross subsidy from people who don't use the card to people who use it. And in any case, among people using the card, there's already a cross subsidy from people having to pay low sales-tax rates to people having to pay high sales-tax rates. BH just became more attractive to some people, and less attractive to others. I'm already buying elsewhere for the most part, anyway...

(now that I think about it, it feels like they stopped sending me that huge and heavy catalog! maybe not cutting all those trees made room in their margins and made this whole operation possible... XD)
 
Samuel H said:
They can't just drop their margins by ~6-10% and continue "business as usual" ...
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Yes, they can. You know why? VOLUME, VOLUME, VOLUME! (had to have lived in the US in the 70's and the 80's).

Seriously, the individual margins don't matter compared to the total profit. There are retailers in the US - such as Brandsmart, a name local to South Florida - who are known as discounters. While they can't advertise lower than the MAP prices in their TV/radio/print ads, they can add their personal "eligible for an up to $$$ rebate" type of a disclaimer. And then it becomes a nudge-nudge arrangement between them and a manufacturer.

It all depends on the price elasticity of demand and in the field of consumer electronics, it's quite high below the MAP and quite low above it. And, for a retailer, it's nothing but a box. They don't actually sell TV's/stereos/refrigerators, they just move these refrigerators, they've got to move these color TV's.
 
Just to be clear, do you think BH can double its volume thanks to this? Because, with an initial 12-20% margin, anything short of that would mean they make less money... And for fast-moving stuff I don't think their margins are that high to begin with. Plus, moving twice as much stuff is not free, it probably means you need bigger warehouses and more workers.

Maybe they're losing their battle against amazon and decided to go for lower average margins, shaped in a weird way that would get them a lot of publicity. If that's the case, well, at least the publicity side worked great.
 
Margins fall with the prices but in non-linear ways. IOW, a $3,000 camera may have a 35% profit margin but a $1,000 camera a 25%. Plus, there are manufacturer rebates, which is why you see the current price drops on a bunch of models that were supposed to be the big hits of the season but are not. Plus, there are volume discounts - sell a hundred $3,000 cameras and your cost is $2,000; sell two hundred and it's $1,900; sell three hundred and it's $1,800, etc.

I assume there's been significant number crunching done and the costs of the program are probably shared by the several entities.

PS On top of that, B&H is primarily a photo-video retailer and their numbers are getting crushed along with other photo-video retailers and manufacturers. The decline and the eventual demise of the entire industry means next to nothing to Best Buy, less than nothing to Amazon; it means everything to B&H.
 
To be clear.....there are no big margins to slash on cameras/video cameras/cinema cameras.....its very tight to begin with when you start with the manufacturer's MAP pricing vs the cost we dealers pay.
 
Jim Martin said:
To be clear.....there are no big margins to slash on cameras/video cameras/cinema cameras.....its very tight to begin with when you start with the manufacturer's MAP pricing vs the cost we dealers pay.
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I worked in retail electronics for most of the 80s, what Jim says is 100% true. The highest margins in consumer electronics were always car stereo, followed by audio, then personal electronics, followed by video, then white goods (appliances, washers/dryers, etc.)
The margins on consumer TV/video back then were only 8-12% and a huge portion of the overall video mix was sold at a considerable loss for loss leaders in newspaper (remember those?) ads. In the 90s, I moved more into broadcast industrial video and film gear
and the overall margins were healthier but this was the era of video gear costing a bloody fortune, $100k+ cameras and even Beta SP and then DigiBeta decks cost $50k-$75k each and you needed at least two or three of them.

After the digital revolution, most pro video gear now sells for what higher end consumer gear used to sell for pre-revolution so I have to imagine that margins are roughly akin to high end consumer video margins, which ain't a lot.
I'm sure Arris and REDs have at least some decent margins but as a retailer, how often are you selling Alexa Minis and Monstros? Not very often I would imagine?

I always found it amusing what consumers think dealers pay for any electronics and especially cars, even after factory incentives. Most consumers think retailers are working at 50% margins which is so far from reality it's not even funny.
Accessories save the day but even those margins aren't that great these days and you have to sell a lot if you only sell a few high end cine/video cameras per month.
 
You worked for Circuit City, Dan? That place was great. A lot of the sales people knew their stuff there unlike Best Buy, where knowledgeable staff seems to be in the minority...
 
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