Under the current taxation rules, your opponent doesn't need to do anything to undercut you. If he sells the same quality product, at the same price, his product will cost the consumer ~3-8% less than yours, simply because he is out of state and you are not.
When government gets involved....it becomes SNAFU. When you open the door and welcome taxes, be sure more than you expect will follow. Along with taxes comes regulation. Of course, don't expect your competition to sit idly by and watch you destroy him.......he is going to lobby to raise taxes and regulation against YOU.
You're right. Excelt that government is ALREADY involved. The taxation rules already set by the government give out of state merchants an advantage. Taxing internet purchases may not be a free market solution, but leaving the current system in place may not be a free market solution either.
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Under the current taxation rules, your opponent doesn’t need to do anything to undercut you. If he sells the same quality product, at the same price, his product will cost the consumer ~3-8% less than yours, simply because he is out of state and you are not.
Everyone is out of state for most of their customers. Who is going to reimburse the online seller for the massive headache of collecting the sales tax and filing quarterly with every state in the union when they may have no or little tax from most of those states?