Watch my talk on Work/Life Balance
Glad to report that the team at Affiliate Summit West has posted a video of my closing keynote talk on work/life balance from the show, held January 2011.
Here it is, embedded:
This is the proverbial talk years in the making, so I'd love feedback positive or negative.
Best Buy Mobile: Another win for Best Buy
Local buzz here in Colorado is that consumer electronics retailer Ultimate Electronics (no link: the site's already permanently offline) has filed for bankruptcy and will be liquidating its inventory in the very near future. Fact is, it's darn hard to sell consumer electronics in an age of Amazon.com, Newegg.com, Buy.com and even eBay.
There are a few companies that have figured out the CE marketplace, including a company notably missing from the Colorado landscape, Fry's Electronics.
There's no smarter CE retailer, however, than Best Buy. From its successful retail outlets to its popular Web site, Best Buy has figured out a formula that keeps it at the very top of the game. A company well worth studying for anyone who says retail is dead.
That's why it was a delightful surprise when I was at Cherry Creek Mall earlier today and bumped into this Best Buy Mobile storefront:
A little digging reveals that the first Best Buy Mobile shop was opened back in 2007 and that it's been growing steadily as a part of Best Buy's overall business. There were zero Colorado-based Best Buy Mobile stores listed in the Best Buy 2010 Annual Report, so it must be brand new!
Best Buy's 2010 Annual Report offers insight about how things unfolded: "In fiscal 2007, we also developed the Best Buy Mobile concept through a management consulting agreement with UK-based The Carphone Warehouse Group Plc. Best Buy Mobile provides a comprehensive assortment of mobile phones, accessories and related services using experienced sales personnel, now in all U.S. Best Buy stores, as well as stand-alone stores."
Makes sense. Why build a small retail footprint store aimed just at mobile when you can acquire a company that's already mastered the concept, particularly in a key international market.
A bit more digging reveals that at the beginning of fiscal 2008 there were 9 stores, the company closed three and added 32 in fiscal 2009 and opened 36 more during 2010, for a total of 72 stores domestically. On that trajectory we should see 100 of these small shops by the end of fiscal 2011.
Back to the store, though. Check out the interior:
Unlike the Sprint store that's adjacent, the Best Buy Mobile store carries phones from multiple carriers to offer a far more neutral and agnostic environment within which customers can pick the best phone and carrier for their own needs.
It's all incredibly smart and a surprise that it's take this long to appear. My prediction? The single-carrier store in the mall just got a pink slip.
How to Implement a National / Internet Sales Tax
This is a subject I've talked about before, but this time I want to dig into possible solutions and posit a solution that might actually work. The problem, of course, is that municipalities, cities and states are missing out on billions in tax revenue because of online stores that don't charge sales tax because they don't have what's called a "nexus" in the biz, a physical brick-and-mortar location in that particular state.
It's insidious: if I can buy a book for $20 at the local independent bookstore, I'd also be contributing (for lack of a better word) 8.31% sales tax, $1.66, split across the city, county and state. Multiply that by millions of transactions every day and it's a huge amount of money. If I instead used the handy Amazon.com app on my phone and bought the book online, that $1.66 wouldn't make it into the city coffers, etc.
Just focusing on Colorado, our state sales tax rate is 2.9%, and "in addition to its own sales tax, the state collects sales taxes for many Colorado cities and counties and several special districts." There's also an existing Consumer Use Tax that's intended for when a regular sales tax isn't collected (like those online purchases). The state consumer use tax rate is the same as the sales tax rate: 2.9%.
There are approximately 43,000 zip codes in the US, so let's assume that each zip code has a different taxation rate (I'm sure it's easier than that, though) and that each zip code uniquely describes a unified sales tax zone, factoring in cities, counties, special taxation districts, and all the other complexities of taxation.
Sounds like a lot. 43,000 tax zones. But that's why we have computers, right? So here's what I suggest for fairly calculating and distributing an Internet-based sales tax:
Internet sales tax should be calculated at 5.00% of aggregate transaction value, based on billing zip code.
That 5.00% would be split 50/50 between regional and Federal coffers, so if I buy a $2000 HDTV from Amazon.com, I'd be charged a 5% online sales tax by the merchant, and they would then make monthly payments to a federal Internet sales tax agency. That agency would analyze and divide out the money and issue payment to each state proportional to the number of aggregated billing zip transactions for that time period. Each state would then split out its payment to each of the specific zip code regions.
In the case of my mythic HDTV, that $2000 purchase would have $100 tax added on, all of which would be sent to the Feds. They would keep half ($50) and send the other half to the State of Colorado, which would probably split it again in half, sending $25 to the department of revenue in my community and keeping $25 for the State budget.
Easy enough and we could then do away with the goofy "consumer use tax" which I suspect a tiny percentage of people are even aware of, let alone pay diligently each year.
By pushing the burden onto the merchant, it also frees up audits and dramatically increases the percentage of transactions overall that actually produce tax revenue when they file their taxes with turbotax for free.
Can it work? Let's dig into it a bit with some sales data that a local online merchant shared with me, aggregate sales data by transaction amount and zip code...
The data has 11,962 records, representing 6,652 unique zip codes and an aggregate transaction amount of 118,167.75. That means we're talking about lost Online Sales Tax revenue of $5,908.39, or $2,954.19 in Federal sales tax. If we assume that those 6,652 zip code zones represent an uneven split of 40 states, that means that, roughly, each state also missed out on about $75 in revenue from this individual merchant.
Not a lot of money, I grant you, but multiply it by a few thousand -- or more -- and you start to see how much of an impact this simple proposal could have on city, state and Federal budgets. It really could be the difference between city centers collapsing from lack of retail sales tax to cover infrastructure costs and cities doing well.
It also levels the playing field between brick-and-mortar (the lifeblood of every economy worldwide) and the upstart online sites, an important factor to consider as we move further into the 21st Century.
There's no going back. I'm not rallying for a return to an offline world as we had in the 1950s, or even further back before Sears Roebuck changed the dynamics of an expanding West by introducing catalog shopping. On the other hand, like it or not, sales tax and usage taxes are the grease on the machine of our economy and form of government. Watching it dry up is just creating a greater economic disparity between the "haves" and the "have nots" and crippling our infrastructure services like firefighters, police, street maintenance, and parks and recreation.
But that's just my view, and my proposal. What's your take on this, dear reader?
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