It’s no secret that SMB’s (small to-mid size businesses) have a tough time competing with larger Internet retailers. Larger merchants generally enjoy perks that smaller retailers don’t, such as massive shipping discounts and higher tax thresholds. However, eBay is trying to level the playing field. On the 14th annual US of eBay Advocacy Day, 24 eBay sellers convened with over 60 members of Congress to shed light on some important issues. Joined by CEO Devin Wenig, this group of eBay sellers urged the Government to “work on” four specific policies that currently negatively affect SMB’s.
The Four Policies eBay is Urging the Government to Work On
The eBay sellers who met with Congress highlighted how government policies on trade and USPS directly affect their businesses. Here are the four specific policies that these eBay sellers are urging the Government’s to look at:
Fair Access to USPS Services
First and foremost, SMB’s need to have fair access to USPS services. Recently, President Trump’s Postal Task Force has suggested the Government split USPS products into two categories: essential and non-essential. Under this suggestion, all eCommerce shipments would be non-essential because of their commercial nature. As a result, the price of shipping these kinds of items with the Postal Service would skyrocket. Who would get hurt the most from those shipping price increases? Small to mid-size Internet retailers, such as this group of eBay sellers leading the lobby.
The Wayfair vs. South Dakota Online Sales Tax Ruling
Secondly, the eBay sellers argued that small businesses need a better tax and trade policy. CEO Devin Wenig came to their aid on this particular issue. Wenig proposed that instead of upholding the Wayfair vs. South Dakota ruling, the United States needs either a nationwide Internet sales tax or a small business tax exemption. He argued that without either of those, small domestic sellers will continue to struggle.
In case you weren’t aware, Wayfair vs. South Dakota was a US Supreme Court case in which the court ruled that states can charge taxes on purchases made from out-of-state sellers, even if the seller doesn’t have a physical presence in the taxing state. As small business owners, it’s obvious why Internet retailers’ bottom lines suffer because of this decision; they get taxed by any state they’re selling to!
A Higher de minimis Threshold
Ever heard of a de minimis threshold? That’s what we thought. Basically, a de minimis threshold marks the point in the price of goods after which taxes are applied. The higher the threshold, the higher value of goods a seller can export overseas before he or she gets taxed.
As it stands, the threshold for American goods exported overseas is low enough to the point of discouraging some SMB’s from selling in foreign markets. If the US Government negotiated with our international trade partners to set a higher de minimis threshold, SMB’s could benefit from selling in foreign markets without getting hit with ridiculous taxes.
Broadband Internet Expansion to Rural Areas
The fourth and final issue that eBay sellers urged Government to look at is the fact that rural areas have such limited access to broadband Internet connection. The truth is, not everyone living in rural parts of America enjoys high-speed Internet. Roughly 6 million eBay sellers live in rural areas, and 33% of those sellers suffer from a weak broadband connection!
Accessible broadband Internet connection is absolutely necessary to run a business that operates online. More than anything else, providing broadband Internet is also one of the keys to unlocking the selling potential of rural America. There’s a lot of financial power waiting to be unleashed in rural America, and who knows how much it could help the economy if we unlock it.