Amazon (AMZN), the world’s largest online retailer, has garnered huge profits by meeting shoppers’ demands for low costs, fast deliveries, and tax-free shopping. Recent legislation, however, is changing that, and consumers in certain states now have to pay sales tax on their Amazon purchases. One equity research analyst turned to SurveyMonkey Audience to understand how Amazon shoppers would react to this change. After using SurveyMonkey Audience to create a high-quality survey, he targeted people living in California (one of the states that enacted the new sales tax law) to find the insights he needed.
Will shoppers decrease their spending on Amazon now that they need to pay sales tax? 61% of shoppers said they would not change their spending on Amazon due to the new sales tax, while 36% said they would spend less.
The analyst also wanted to see what exactly would motivate dedicated shoppers to keep spending on Amazon in spite of the sales tax. Shoppers remarked that convenience and cheap prices were two of the main reasons they would continue to shop on Amazon.
Despite the introduction of sales tax, shoppers in California will continue to buy all types of products from the online retailer. Even though a small proportion will likely decrease their spending, the majority will continue to spend as much or even a little more on Amazon. While Amazon lost the fight against having to pay sales tax in California, investors can maintain a positive outlook that Amazon shoppers will continue to be loyal customers and that spending will likely not decrease significantly for the online retailer.