One Web Site to Rule Them All...

Some months ago, I was taken completely by surprise when Amazon rather suddenly stopped battling with various states (including California) over the collection of sales tax, and instead started signing agreements to phase in sales tax collection.  I couldn't figure out what Amazon would voluntarily give up the enormous advantage they had over brick-and-mortar stores.

Now I know, thanks to this article.  Amazon realized they had another opportunity, and one that they didn't share with every other web store: they have achieved the scale (or at least, they believe they have) required to put the infrastructure in place to enable them to make same-day deliveries to most of their U.S. customers.

That makes for a very compelling online shopping experience.  While drinking your morning coffee at your kitchen table, you can browse Amazon's enormous “catalog” for something you need, order it, and have it delivered to your door in a few hours – or the next day at worst.  At the same time, you're going to get it at an excellent price, and you're going to get Amazon's famous customer service (including return privileges).  Why would you shop in a brick-and-mortar store, if that experience was available to you?  The reasons for doing so just got significantly fewer.

Then think about what Amazon did to its online competitors with this move.  First, by “capitulating” to the states with regard to sales tax collection, Amazon establishes a precedent that will make it enormously easier for the states to go after all the other web sites for sales tax collection – thus leveling the playing field for Amazon on the price front.  Second, damned few of Amazon's competitors – quite possibly none of them – have the ability to put up competitive delivery infrastructure.  The existing retail chains might be able to pull off a reorganization around that theme, but that will be very challenging even for them.  One could imagine someone cobbling together a consortium or cooperative effort – perhaps even something akin to an open source effort – but such will not be easy.  Amazon will be starting off with a huge, huge head start.

If Amazon manages to pull this off, it will be brilliant.  Simply brilliant...