Amazon Case Study Analysis

It also shows the justification for creating an online platform for an organization. It further shows how online shopping tax influences efficiency among the Australian retailers and the total surplus. At the end, the paper illustrates the short-run and long-run effects of the tax policy on domestic retailers in Australia. Summary of the Article Beginning July 1, 2018, the online retail giant Amazon focused on forcing Australian shoppers to utilize local website. The change was aimed at responding to the Turnbull government’s new online Goods and Services Tax (GST) regulations. Many consumers in Australia revealed that numerous items marketed by third-party sellers are more costly when bought through the Australian site. This shows that the cost of buying Amazon goods from the United States and paying for its shipping to Australia was lower than using the local Australian website.

The block made on July 1, 2018, will make it slightly challenging and more costly to purchase items from Amazon international. However, it is hoped that there is an opportunity that the block will be more improved than presenting increased prices through the Australian site. Chung (2018) notes that to avoid the increased prices which might be incurred through the use of the Australian website, the users will need to use a virtual private network (VPN) and switch it to the U. The article focuses on elaborating on how the Australian government rules and regulations may trigger adverse impacts on Amazon’s operations in the Australian market. This serves a vital role because it assists in presenting the main market of the article. This shows the dilemma faced by Amazon in its Australian activities.

The dilemma is that Amazon has to comply with the Australian government regulations as well as ensure that the online shoppers do not suffer or feel disadvantaged relative to other shoppers worldwide. This way, Chung (2018) presents the article to show the economic as well as financial implications of the government regulations on Amazon’s sales, revenues, and profits and the overall impact on the online shoppers. This argument is based on the element that if the consumers want to beat the Australian system of purchasing the online items, they have to incur additional costs. For instance, as suggested in the article, consumers may end up deciding to use the virtual private network to conceal their identity when making the online purchases.

This is disadvantageous because the consumers end up spending more than they should have paid in the absence of such taxes. Bearing in mind that most of the VPN range between $10-20 a month, this is an additional cost to the consumers in Australian which is not incurred by another consumer outside the Australian region (Chung, 2018). It would also deny the Australian online shoppers experiences offered to other consumers in different countries. As supported by the social choice theory (Fishburn, 2015). The reason is that the online retailers may feel that the tariffs are unfavorable and therefore, reduce their supplies to the Australian market. It would make the consumers lack multiple alternatives to select from, unlike their counterparts worldwide. Under the tariff theory, this assertion is also based on the perspective that tariffs are a barrier to international trade (Beshkar et al.

Having increased the cost of the online purchases, the online shopping tax system would make Amazon inform the online shoppers the need to utilize its local website. As supported by Valcke et al. (2015), media pluralism also entails the presence of multiple coexistences of diverse or different forms of media support. In the presence of media pluralism as a result of the creation of online platforms, consumers benefit from media pluralism, and they can exchange diverse opinions about consumption concerns and possible issues. The rationale for creating an online platform is that it may outgrow the current platform. Different companies deploying e-commerce solutions and application of online platforms may find themselves making the shift to enterprise approaches which provide the user experiences which clients expect.

Online platforms enhance market efficiency because they rapidly change how products are purchased and sold. They serve as crucial marketplaces for facilitating the match between demand and supply. This exists because an online platform ensures that there is the smooth flow of information between the sellers and clients. The clients can obtain details about prices and products with ease. The Internet retailers can see and compare the price techniques used by other retailers, and this ensures that there is transparency sharing of information. In this perspective, it is crucial to understand that tax incidence attempts to recognize the market participant who bears the cost of tax (Stiglitz & Rosengard, 2015). The imposition of tax on the online commodities valued under $1,000 shifts the supply curve up and to the left.

If the online shoppers have multiple alternatives to certain products which are subjected to the Turnbull government’s online shopping tax, they may tend to respond to a rise in price by buying other goods from different retailers. This shows that they may not be willing to accept higher prices on the products supplied by the online shoppers valued under $1,000. On the other hand, if the online retailers can switch to production of other commodities, or if they can respond to a small reduction in payments by going out of business, then it shows that they will not accept a much lower price (Rugman & Eden, 2017). The PS denotes the producer surplus which shows the difference between the lowest price that the producer (in this case, the online retailer) will accept for the products and the market price for the commodity (Zhang et al.

The sum of the producer surplus and consumer surplus provide the consumer surplus. Short-run and long-run consequences of the tax policy domestic-retailers If the multinational companies are not compelled to make payment for their portion of tax, they may end up having an unfair competitive advantage relative to the Australian retailers. They will also have added competitive advantage over the retailers in the Australian streets and major shopping centers (Chung, 2018). Hence, the tax policy will have both short-run and long-run outcomes on the domestic retailers in Australia. If the commodities take a great percentage of the consumer’s disposable income, they will make huge changes to their lifestyles. This shows that in the long-run, the high price of imported commodities under the value of $1,000 may encourage the consumers to find alternatives.