End The Subsidy

On July 5, 2011, in HRExaminer, John Sumser, by John Sumser

What's the impact of Amazon's recent affiliate change in California on employer branding?
Just as I hit the pothole in front of the shuttered Borders, the Radio newsflash says that Amazon is canceling the associates program in California. Over 10,000 people curated Amazon stores to offer their friends and readers goods through Amazon in exchange for a small slice of the transaction. The notice was abrupt and instantaneous.

Amazon terminated their program in order to avoid paying California sales tax. Under a recently passed law, any retailer with an observable physical footprint in the state is required to collect sales tax. Rather than acting like a good corpoate citizen, Amazon huffed off the playing field leaving disappointed customers and associates.

What the behavior makes clear is that Amazon is not able to compete with the likes of WalMart and Target based on economic performance. The internet giant is so dependent on the implicit subsidy that it has to weasel its way out of the legal requirement for doing business in California.

It’s sort of what you come to expect. Subsidies are never temporary, are they? Any time you try to cause a subsidized group to come up to par with the rest of its peers, you get a lot of guff and a ton more bad behavior.

Apparently, the freedom from collecting sales tax is an entitlement. Amazon is huge and no longer requires the subsidy. These are hard economic times and the tools necessary to get something started just aren’t going to work the same in this environment.

So, I’m going to find Amazon alternatives. I want to do business with companies that honor and respect the communities they serve. It’s a harsh environment and my community needs it’s members to help out. By refusing to participate, Amazon is telling the world exactly where their priorities are.

File this under employment branding.




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