AIB Hosts Roundtable on Engaging Suppliers in Supporting Indies

For suppliers and manufacturers, independent retailers deliver an essential value. There’s clear evidence that it’s independents that introduce new products, induce customer demand, and maintain competition in the marketplace.

For the Advocates for Independent Business’s fourth roundtable discussion, coalition members exchanged experiences and tips across their industries on how to talk with suppliers about this value. During the one-hour conversation, members discussed the ways that suppliers already recognize it, ideas for further education, and other strategies trade associations can use to recruit suppliers as allies in supporting indies and preserving a diverse marketplace.

Some of the highlights from the discussion were:

  • Oren Teicher discussed how a Federal Trade Commission advisory opinion opened the door for the American Booksellers Association to negotiate with publishers on behalf of its members.
  • Fred Clements shared strategies that the National Bicycle Dealers Association uses to educate suppliers. These include a widely-distributed white paper on why specialty brands need specialty retailers, and a supplier scorecard that allows retailers to both influence the marketplace and see what their peers think about different brands when making their buying decisions.
  • Michael Morris covered how TriMega Purchasing Association negotiates with suppliers on terms like minimum order sizes, and works with them to create differentiation for independent retailers in the marketplace, such as by developing a national private label brand that’s only found at indies.
  • Parker Karnan talked about how the Independent Running Retailers Association is working with vendors to create programs that provide more value for them, such as drop-shipping from the vendor to the retailer, or omni-channel options that allow the customer to shop online from the brand, and pick-up the purchase in-store. “The vendors do see the value in having specialty stores,” Karnan said, “and know that the only way they can get product trial is through the running retail stores.”
  • Justin Koranda discussed how Fat Brain Toys, which is both a retailer and a manufacturer, has adopted policies that make a commitment to specialty toy retailers. As a manufacturer, Fat Brain Toys has a MAP pricing policy, and as a retailer, the company looks for manufacturers that employ wholesale policies that are similar to its own.

After brief presentations from these speakers, coalition members asked and answered questions about the details of these ideas, and talked about suppliers’ growing awareness of the importance of the independent retailers in their sectors.

At U.S. Supreme Court, an Invitation to Reconsider Internet Sales Tax Ruling

Photo: U.S. Supreme Court.

Photo of the U.S. Supreme Court by Pete Jordan, via Flickr.

After years of fighting for a federal fix for the online sales tax loophole, this week, advocates for e-fairness gained a new ally: U.S. Supreme Court Justice Anthony M. Kennedy.

On Tuesday, the Supreme Court decided a question over which court—state or federal—has the jurisdiction to hear a case about Colorado’s internet sales tax law. The issue was minor, and without weighing in on the legal challenge to the law, the Court decided it unanimously.

At the same time, it signaled a readiness to review a much more important case about how we tax internet sales.

In 1992, the Court ruled, in Quill Corporation v. North Dakota, that unless Congress passed legislation granting them the authority to do so, states could not require out-of-state companies (e.g., mail order and online retailers) to collect sales taxes. In the 22 years since, internet commerce has boomed, and states have had to bend over backwards to try to create a more fair tax system on their own.

On Tuesday, in a solo concurrence to the court’s opinion, Justice Kennedy wrote that the Quill decision inflicts “extreme harm,” and is long past due for review.

“It is unwise to delay any longer a reconsideration of the court’s holding in Quill,” Kennedy wrote. “A case questionable even when decided, Quill now harms states to a degree far greater than could have been anticipated earlier.”

“When the court decided Quill, mail-order sales in the United States totaled $180 billion,” Kennedy continued. “But in 1992, the Internet was in its infancy. By 2008, e-commerce sales alone totaled $3.16 trillion per year in the United States.”

“The result,” Kennedy wrote, “has been a startling revenue shortfall in many states, with concomitant unfairness to local retailers and their customers who do pay taxes at the register.”

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2015 Independent Business Survey: Buoyed by Public Support, Independent Businesses Report Strong Sales Growth

Cover: 2015 Independent Business Survey reportLocal businesses beat the holiday performance of many national chains, but continue to experience difficulties with policies tilted in favor of large companies

FOR IMMEDIATE RELEASE

MINNEAPOLIS, MN (Feb. 11, 2015) – Independent businesses saw strong sales growth in 2014 as more consumers embraced the “buy local” movement and ditched big companies in favor of supporting local retailers and small-scale producers, according to a large national survey released today.

The survey, which is now in its 8th year and was conducted by the Institute for Local Self-Reliance in partnership with the Advocates for Independent Business, gathered data from over 3,000 locally owned businesses. The respondents reported brisk sales in 2014, with revenue growing 8.1% on average in 2014, up from 5.3% the previous year. Among independent retailers, which comprised about half the sample, revenue increased 5.1% in 2014, versus 2.3% in 2013. Holiday sales at local stores grew too, by an average of 4.8%, beating the performance of many national chains and coming in well ahead of the 0.9% decline in December retail sales reported by the U.S. Department of Commerce.

The survey results suggest that the strength of the independent sector is owed partly to an improving economy and partly to the spread of the “buy local” movement. Businesses located in cities with active Local First campaigns reported sales growth of 9.3%, compared to 4.9% for those elsewhere. They cited a wide range of direct benefits from these campaigns, with half saying the initiatives had generated new customers and 45% saying they had resulted in more awareness and support among city officials.

Despite these gains, independent businesses reported that they still face a decidedly uneven playing field. Nearly three-quarters of the local retailers surveyed said that the fact that many online retailers are not required to collect sales tax had negatively impacted their sales, with 39% describing the level of impact as significant. “As a local business owner with a brick-and-mortar location, we are automatically at a 8.1 percent price disparity because we are required to collect local sales tax,” commented a business owner in Arizona. With Congress failing to pass an e-fairness bill last year, the survey found that a large majority of independent retailers are now backing state legislation to level the playing field.

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AIB Submits Comments on New Rule to Require Governments to Disclose Tax Breaks for Economic Development

AIB-letter-imageAIB has submitted comments in support of an important proposal to change the accounting rules that local and state governments follow. The change would require governments to disclose the tax breaks and incentives they provide to companies for economic development purposes.

The new rule has been proposed by the Government Accounting Standards Board (GASB), which is a professional association that establishes standards of accounting and financial reporting for state and local governments. (Although GASB has no legal authority, the vast majority of states and localities follow its rules, in part because doing so is necessary for those that want to sell bonds.)

Local and state governments spend an estimated $70 billion a year on economic development subsidies given to private developers and companies. Most of this spending is in the form of foregone revenue (i.e., tax breaks) rather than direct outlays. Governments are not currently required to disclose these expenditures under GASB’s rules, making it difficult to know how much a city, county, or state is spending on tax incentives for companies and to evaluate the whether these expenditures are worthwhile.

In its letter, AIB, a network of 14 organizations that represent about 150,000 independent businesses, wrote:

We have a deep interest in this proposed policy, because the tax expenditures that local and state governments make for economic development directly affect the competitive landscape in which our members operate.

Many cities, for example, have provided tax abatements to new big-box retail projects that compete directly with the Main Street businesses that we represent, sometimes leading to business closures and job losses. There is evidence that the public may not be getting their money’s worth from some of these expenditures. For example, a 2011 study produced for the East-West Gateway Council of Governments found that cities and counties in the St. Louis metro area had diverted more than $5.8 billion in public tax dollars to finance private development, with more than 80 percent of these funds supporting retail projects. Yet the region saw virtually no economic growth. “The number of retail jobs has increased only slightly and, in real dollars, retail sales per capita have not increased,” the study found. According to the study, more than 600 small retailers closed in the St. Louis metro area during the period, producing job losses that apparently offset the new jobs created by the subsidized development.

In its letter, AIB expressed its support for the proposed rule, but urged the board to modify two aspects of its draft. Continue reading

Why Small Business Needs Congress to Close the Online Sales Tax Loophole

Photo - #efairnessnow supporter.

Courtney at Holdfast Printworks in North Carolina.

In the next few weeks, Congress has the opportunity to fix a tax loophole that’s been hurting small, independent retailers for years.

While big online retailers get out of collecting sales taxes, small, brick-and-mortar stores have to charge customers prices that can be as much as 12 percent higher in some cities. Last year, the Senate passed a bill, the Marketplace Fairness Act, that would finally level the playing field for small businesses, by a bipartisan vote of 69 to 27. But if the House doesn’t act before Congress’s current lame duck session ends, the bill will die, and local business owners and supporters will have to start over.

There’s a fierce debate in the House about whether to take up this issue.  Help us convince Congress to act by joining our campaign for E-Fairness Now. Continue reading

Local: A Better Way to Shop

Graphic: Local: A Better Way to Shop (detail)

If you are shopping online today, we hope you are doing so with independent businesses! An analysis by the Institute for Local Self-Reliance found that, for every $10 million in sales, independent retailers create 57 jobs, while Amazon creates just 14.

For more great facts on shopping locally, check out AIB’s Shopping Local for the Holidays infographic.

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Shopping Local for the Holidays: AIB’s Infographic Has the Facts to Know

Infographic: Holiday Shopping LocallyWhile analysts are already chattering about which big-box stores will open on Thanksgiving Day this year, the resurgence of independent business is the holiday shopping story that’s more important to many Americans.

Six in 10 customers say they go out of their way to shop at locally owned stores, and their support is fueling brick-and-mortar merchants, like the more than 50,000 independent businesses that are part of Local First alliances across the country.

This season, events like Neighborhood Toy Store Day, Back to Black Friday, Indies First, Shift Your Shopping, and Small Business Saturday will draw tens of thousands of people into independent retail stores.

For the key facts about shopping locally this holiday season, check out this infographic, put together by the Advocates for Independent Business. Click on the image to view and save a larger version, and see below for thumbnails of three smaller images that are easily shareable on social media. Click these to enlarge and download.

For more information, download the AIB’s press release about shopping local for the holidays, below.

AIB-Shopping Local-Press Release

 

Infogrpahic: Growing Popularity.

 

 

 

 

 

Infographic: Economic Returns.

 

 

 

 

 

Infographic: Expanding in Numbers