The Story With amazon.com

Amazon just reported earnings for Q3 2014. They missed on both the top and the bottom lines. My 2 cents on Amazon are as follows. Whatever happens with their cloud and server business, which they largely pioneered to their great credit, the end of the road is in sight for Amazon and their million x revenues and zillion x profits run in the markets. First, I noticed just the other day after purchasing an eBook for my kindle, that I had been charged Minnesota sales tax on the purchase!!!!!!!! Wtf? This is likely to change my purchasing behavior substantially, especially as this was charged at the full rate on something as ethereal as an eBook. Note that an eBook does not avail itself of any services for roads or delivery or anything else by the state of Minnesota. They literally have no nexus with the state as a merchant at all in any way. Why then am I being charged sales tax? Well Minnesota is one of the most tax greedy states around for one thing. I mean the income tax is an astounding 10% on income over $249,000. Entrepreneurs going to be setting up shop in Minnesota? Methinks not. Under the moron Mark Dayton and his fellow moron democrats (by definition), Minnesota has just priced itself out of business for the business savvy. Good work if you can get it. Watch for the state to slide down most other rankings in future years.

In addition to the whole sales tax thing, which I think by itself will be the harbinger of the end for Amazon, they also have stopped making large numbers of eBooks available through the Kindle Lending Library. The Kindle Lending Library was one of the best things around. I would “borrow” an eBook written usually by an independent author in the sci-fi genre at the allowed rate of one a month. You could then borrow another on the 1st of the next month. This was part of the Prime service for which I pay now $99 a year (used to be $79). If I got into a great series I would then buy the others in the series at a rate of non-taxable $2.99 or $3.99 per book. All in I probably spent $8 or $9 per month and got to read 3 or 4 books, just about right.

Now, Amazon is trying to get everyone to not only stump up the $99 for the Prime service but an additional $9.99 per month for Kindle Unlimited. Lots of the books I liked are available under the Kindle Unlimited banner. But I do not like it. First of all, do I have to pay sales tax on that $9.99? If so forget it. I do not want to give another dime to the bloodsucking government. Second of all, it means to get my money’s worth I HAVE to read as many books as possible. It used to be I could languish and read my one free book plus as many others as I wished at the normal cheap prices for independent authors. Now I would have to just read all the time. I do not like the pressure.

The point is that the subjugation of amazon.com to sales tax by the parasites in government is going to lessen the advantage they have and cause them to become more grabby for my dollars which is likely to mean I use them LESS. Why government could not come up with a lesser rate for companies who do not otherwise use their services, creating a two tier sales tax structure (after all the online merchants do not avail themselves of as many state services as a brick and mortar shop) I do not know. Probably because they are greedy little morons all. As result, I think the multiples enjoyed by amazon to sales and to earnings are going to decline steadily from now onward. That means their shares will not be worth as much. And their shares are their currency for acquisitions and Bezos’ clout in the real world for his other dreams like life extension and space travel. So expect less of those and more and more Jeff Bezos and Amazon to be seen as mortal and vincible.

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