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Dutchman

Taxes Charged by Reverb Slowing Sales

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I’ve noticed that my sales have dipped since Reverb started collecting taxes. I see many of my items in someones cart and sometimes 2 or more will have an the same item in their carts. I think they get to the final step and see the taxes charged and don’t finalize the sale because of the taxes. Anyone else noticing this?? 

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Posted (edited)

I don't know about that, but somehow I think that any listing that's announcing to the world that somebody's got that item in their shopping cart, and is potentially pending purchase, is just a 'come on' of sorts by Reverb to try to increase traffic or encourage an impulse buy.  Same thing for somebody making an offer on an item.  I'm not prone to wanting anyone knowing that I'm interested in something until after I've bought it.

Edited by crunchee
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Posted (edited)

I am pretty sure that there is some game playing. I will watch things I am moderately interested in. I have received several notices...."Buy now before you lose out. Someone else has it in their cart!" I dunno. May be the seller's buddy. And yet the item is still for sale 3 weeks later.

I did put one item in my cart a month or so ago. I am NOT in need of anything. There was something special and it was just beyond my self-imposed limit. Oh, WTH! Then I saw it would be $350 on top of that. Forget it! I am outta here!

I have nothing listed on Reverb, so I do not know from the SELLER's side. I WILL confess that there was something that looked like a good buy. I did see the extra couple hundred to be added and walked away. For better or worse, the seller was anxious enough to sell that he dropped the price 2 more times over the next week. At which point it was within my budget. Long term keeper? I dunno. If I decide to sell, you will see it here first. VERY nice semi-hollow......

Note that some folks list in multiple places. For example, TGP AND Reverb........With "A discount for my fellow TGPers".

Edited by django49
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1 hour ago, django49 said:

"Buy now before you lose out. Someone else has it in their cart!" I dunno. May be the seller's buddy. And yet the item is still for sale 3 weeks later.

I’ve been seeing more of this. Predicted to sell soon. It usually doesn’t mean squat. I’ve lowered prices to compensate for the taxes but that’s a death spiral. I think taxing internet sales was initiated because of places like Amazon taking away from the brick and mortar stores (that can’t afford to keep large inventories so they’ll surely order it for you... from Amazon)  It’s gonna kill the little guy tho... 

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Isn't funny how people don't want to be burdened by taxes but demand services ?  

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I bought a guitar just yesterday on Reverb and was a bit surprised when there was $140.00 added to my $1650.00 offer at checkout for Washington State sales tax. Ouch.

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9 hours ago, crunchee said:

any listing that's announcing to the world that somebody's got that item in their shopping cart, and is potentially pending purchase, is just a 'come on' of sorts by Reverb to try to increase traffic or encourage an impulse buy

 

9 hours ago, django49 said:

"Buy now before you lose out. Someone else has it in their cart!" I dunno. May be the seller's buddy. And yet the item is still for sale 3 weeks later.

 

7 hours ago, Dutchman said:

Predicted to sell soon.

I'm in the Customer Relationship Management business-software industry.  While I focus on b2b sales and service systems, the marketing, commerce, and customer profile management solutions are part of my solution set.

These examples are commerce and marketing software platforms running a variety of algorithms.  Abandoned cart notifications, people who bought this also bought that, discount codes, tell us more about your preferences, prices slowly dropping until you reach that "sure, it's worth it!" point, feedback surveys, past buying history...  businesses build up first-party (and buy 3rd party) predictable profiles of customer/consumer behaviors, interests, etc. and market to them.  If they push a percentage of buyers over the finish line on making a purchase decision, they increase revenues.  Expect more of it and businesses and systems getting better at it, e.g. not promoting something to you you've already purchased, but it's still just math and marketing.

Taxes are taxes; shipping fees are fees; selling fees are fees.  All affect the purchase price for the consumer, and as such will (and should) affect purchase decisions.  Kind of the same emotional let down as your first real paycheck.  Here you thought stacking and sacking those groceries had earned you $100, but after a litany of taxes you got $68.  Welcome to the world, kid- it's going to get worse.

Reverb did a great job of finding a niche, delivering a better service than the alternative markets (ebay, craigslist), did some great content marketing, has good apps, good marketing, seller/buyer policies I've never had to rely on, and has helped me move equipment more easily, quickly, and cost effectively than some other channels.  But I use them all- I love to buy here, Reverb, and Guitar Center used.  Craigslist?  Too much work to filter out the crazy, but once in a while.

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2 hours ago, Camstone said:

I bought a guitar just yesterday on Reverb and was a bit surprised when there was $140.00 added to my $1650.00 offer at checkout for Washington State sales tax. Ouch.

I think that is the exact reason sales have stopped for me. I sold $4700.00 of musical equipment in June. Taxes where imposed in July. July sales dipped to $200.00. I don’t think it was just a coincidence. 

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I think it's just an adjustment period like anything else.  Sweetwater charges tax and pretty soon all online retailers will, so probably after a few months, it'll level out.  I think the real deciding factor in Reverb will be how Etsy changes things. 

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10 hours ago, django49 said:

With "A discount for my fellow TGPers".

All two million of them :lol:

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3 hours ago, Toadroller said:

These examples are commerce and marketing software platforms running a variety of algorithms.  Abandoned cart notifications, people who bought this also bought that, discount codes, tell us more about your preferences, prices slowly dropping until you reach that "sure, it's worth it!" point, feedback surveys, past buying history...  businesses build up first-party (and buy 3rd party) predictable profiles of customer/consumer behaviors, interests, etc. and market to them.  If they push a percentage of buyers over the finish line on making a purchase decision, they increase revenues.  Expect more of it and businesses and systems getting better at it, e.g. not promoting something to you you've already purchased, but it's still just math and marketing.

That's just great...my own virtual used car salesman!  You don't happen to work for Cyberdyne Systems or Skynet, do you?

 

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Posted (edited)

I've listed 14 guitars over the last 17 days.

5 sold in the 1st week.

5 sold over the last week.

The states Reverb is taxing are Alabama, Arizona, Connecticut, Iowa, Minnesota, New Jersey, Oklahoma, Pennsylvania, South Carolina, South Dakota, Washington, and Wyoming.

Even if taxes are to blame across those 12 states, if you can't find anyone in the remaining 38 states to buy your shit, you're either selling the wrong shit or charging the wrong price.

FTR: 3 of my 14 sales (21%) went to states being taxed which is pretty close to the percentage of states being taxed (24%).

Edited by cynic

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Posted (edited)
7 hours ago, Camstone said:

I bought a guitar just yesterday on Reverb and was a bit surprised when there was $140.00 added to my $1650.00 offer at checkout for Washington State sales tax. Ouch.

Washington State has no State income tax (which you probably know), so sales tax weighs in at aroun 10%. Traffic fines are higher, too.

Edited by JohnnyB
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Seems to me that we’re just seeing that marginally higher prices (as experienced by the buyer) are resulting in marginally fewer sales.  Completely predictable.

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Posted (edited)
6 hours ago, cynic said:

I've listed 14 guitars over the last 17 days.

5 sold in the 1st week.

5 sold over the last week.

The states Reverb is taxing are Alabama, Arizona, Connecticut, Iowa, Minnesota, New Jersey, Oklahoma, Pennsylvania, South Carolina, South Dakota, Washington, and Wyoming.

Even if taxes are to blame across those 12 states, if you can't find anyone in the remaining 38 states to buy your shit, you're either selling the wrong shit or charging the wrong price.

FTR: 3 of my 14 sales (21%) went to states being taxed which is pretty close to the percentage of states being taxed (24%).

I don’t think that’s it. I always check the other sellers prices and start at less than other sellers. I accept any offer within 20% of the asking price. It’s all great gear. Guitars sell faster than Professional Audio equipment. Fully aware of that. I’ve got many return buyers. Maybe it was just a shitty month?? Every buyer no matter where they are pay the tax fee from my site. 

Edited by Dutchman

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41 minutes ago, Dutchman said:

Every buyer no matter where they are pay the tax fee from my site. 

Did you manually set it up that way?  If you're charging taxes to states that Reverb otherwise wouldn't I can see why you may be affected disproportionately.

This is all Reverb does on their own.

Screen Shot 2019-08-10 at 8.55.36 PM.png

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Posted (edited)
18 minutes ago, cynic said:

Did you manually set it up that way?  If you're charging taxes to states that Reverb otherwise wouldn't I can see why you may be affected disproportionately.

This is all Reverb does on their own.

Screen Shot 2019-08-10 at 8.55.36 PM.png

South Dakota now collects sales tax on every sales transaction done on the net from or to the state of South Dakota. It’s a new law that went into affect July 1. If I’m buying I pay sales tax... if I’m selling the buyer pays sales tax. I think I’m going to shut things down after I’ve liquidated my inventory. My margin on buying and selling was not much more than the two way tax being charged. We do not have an state income tax and property taxes are higher than other states but lower than New York, I do know we pay 4 times as much as Tennessee just cuz my son lives there.   1/3 of the state is reservation and pay no taxes whatsoever. They are sovereign nations/nationals. They’re Great people tho. If you ever get a chance to see a Pow Wow I’d highly recommend it!!

Edited by Dutchman
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7 hours ago, JohnnyB said:

Washington State has no State income tax (which you probably know), so sales tax weighs in at aroun 10%. Traffic fines are higher, too.

NH, next door, where I spent my youth and where Grandma and Grandpa Toadroller reside, has neither income nor sales tax, but I understand property taxes are higher.  Dunno about traffic fines, but you're sure to see a lot more cops on the road in NH than Maine.  Then again, NH is a much smaller state.  

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So, when SD collects tax on an item you sell to Michigan, are they sending the money to Michigan?  Same question for Minnesota...does SD and Reverb both collect a tax on that item?  I know Reverb sends it to Minnesota, but does SD?

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2 hours ago, cynic said:

So, when SD collects tax on an item you sell to Michigan, are they sending the money to Michigan?  Same question for Minnesota...does SD and Reverb both collect a tax on that item?  I know Reverb sends it to Minnesota, but does SD?

From what little I understand about it SD keeps all the tax. Reverb sends it to SD. I really need to educate myself on these new tax laws. They kinda said they taxing Amazon and a short time later they used that legislation to tax all internet sales.

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Posted (edited)

I have found items in my cart from Reverb that I believe were "pocket carted" , "butt carted", or whatever you want to call it.  This has just started happening recently.  As far as the taxes go, my state requires me to self report my taxes when online retailers do not collect them.  While I acknowledge that my state needs all the help it can get, I rarely self penalize me.  I have no issue with any online retailer collecting taxes.  That said, Reverb and Ebay are a last resort for me now, buying or selling, not because of the taxes, but because of the fees.

Edited by bigolsparky
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