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Amazon (NASDAQ:AMZN) and the Coming Onslaught

You may not guess it by looking at the chart, but Amazon (NASDAQ:AMZN) is in a tough spot.

Its disciples are fully convinced the company is able to continue growing as other stronger players in retail sit idly by and watch it happen.

Even with the incredible growth Amazon has enjoyed, the truth of the matter is that its operate on razor-thin margins, and a large portion of sales come from other smaller retailers that use Amazon as a marketing platform.

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Many small companies believe as a result of Amazon collecting sales tax in more states, including just recently in California, its businesses will grow or, at a minimum, will not continue falling apart because of an uneven playing field against online merchants.

I wish these smaller companies luck because it's not enough.

People buy products online for many reasons, and sales tax is only a small part. People don't care if they pay sales tax and/or shipping charges. People are smart enough to compare the total cost of a product from a website to its cost at a retail store. For most products, adding in sales tax is not going to level the playing field and put pricing from bricks on par with pricing from clicks.

That said, some items are best-suited for sales in the online world, and some products are best-suited for retail stores. The differences can be seen with a couple of recent purchases my family made.

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