It's really anyone's guess how Trump's presidency will impact eCommerce, but here are a few ideas.
With Trump in power and a federal administration in place, the state of eCommerce as we know it could change, but as of now, no one is quite sure how.
Some say Trump being a Republican could mean great things for eCommerce. This is particularly because Republicans are known to be business-friendly with their policies. Something that Rachel Honoway, president of the board of directors at the Performance Marketing Association, believes.
“Republican politicians tend to be more business-friendly, developing fewer and sometimes even reducing regulations and taxes for businesses,” she says. “Based on Mr. Trump's campaign promises, we believe we'll see him follow in that tradition. This can create positive new opportunities for online retailers to capitalize on. Lower taxes, for example, gives e-commerce advertisers and publishers more money to invest back into their businesses.” via internetretailer.com
However, some online retailers don't share the same sentiments.
Online Sales Tax
The idea of an online sales tax has been in discussions for years now.
With the new federal administration in place, some states are exploring the idea even further. They are looking to use affiliate marketers’ locations to create nexus for an out-of-state e-retailer. To have nexus in a state would imply that a retailer has a physical presence in the state. Having a physical presence in the state would mean a retailer has to collect sales tax in that state.
“His administration is looking at forcing all e-commerce companies to pay state sales taxes based on where the delivery is not where this e-commerce business is based,” says Phil Rooke, CEO of online custom apparel retailer Spreadshirt Inc., referring to legislation proposed by House Judiciary Chairman Robert Goodlatte, R-Va. “Personally if this is done well it could be a good thing but if done in a popularity way it will cause a lot of damage.” via internetretailer.com
45% Tariff on goods manufactured from specific countries
Towards November's hotly contested Presidential election, Trump appealed to small business owners by making it clear that he would enact policies to benefit American businesses. One particularly popular one was his pledge to implement a 45% tariff on Chinese imports, but if implemented, it may hurt e-tailers and the general eCommerce industry way more than we can imagine.
You see, the eCommerce industry contributes a lot to America's retail growth. “Well, according to the U.S. Commerce Department, online product sales now account for a third of America’s retail growth. Last year, eCommerce sales hit an unprecedented $341.7 billion — representing a 14.6 percent year-over-year increase, ” stated Nash Riggins of smallbiztrends.com.
The spike in eCommerce activity can be attributed to the global expansion of streamlined distribution services like Fulfillment by Amazon. However, many of those small businesses using FBA are increasingly sourcing those products from overseas manufacturers in China and elsewhere to keep costs low.
According to Arizona-based business law firm Keller/Warner, Trump's planned increase in tariffs would lead to the increase of prices for products sourced from China, making it harder for small eCommerce businesses to see a profit. The increase in prices would also hurt the consumer.
Move jobs back to the U.S.
Trump's grand plan with all his trade policies is to bring more jobs back to the U.S. But if the trade policies are going to hurt a nascent eCommerce economy, then it's all more theoretical than practical.
Another way to look at it is to consider that Trump's policies may hinder some foreign sellers from marketing to U.S. online consumers, especially sellers through online marketplaces operated by Amazon.com Inc. and eBay Inc.
These marketplaces allow non-U.S. merchants to sell directly to U.S. consumers, usually at prices that U.S. sellers find really hard to beat.
So perhaps Trump's policies might actually allow U.S. sellers to sell to their target markets at comfortable prices that allow them to see profits – without worrying about dumping foreign e-tailers.
Partnership with Alibaba
Apart from trade policies, Trump is looking at strategic partnerships to make it easier for small to medium-sized businesses to do international business.
The President recently met with Alibaba's Jack Ma to discuss ways in which they could work together so that small to medium-sized businesses in the United States can more easily sell goods to Chinese online consumers.
Let's Discuss: In what other ways do you think Trump's presidency will impact the eCommerce industry? Share your thoughts in the comments section below.