Ollieboy wrote:
Please explain how using PayBoo avoids taxes. They are paid by BH and not the buyer. The State still gets their pound of flesh.
...and the customer pays the tax... It is simply buried into the price.
Whenever you see "free," it means the "free" thing or feature is included with everything else. The PRICE is all-inclusive. The vendor is not paying your tax (or shipping, if that's "free") out of their profits. They are discounting the price of the item to the point where what you're paying for the item and the normal add-on is the same as you would pay elsewhere. It makes it easy to see what you're getting. YOU think you're getting a bargain, THEY make a sale, and the state still gets paid their taxes and a shipper still charges for shipping. Everyone is happy.
"Free shipping?" That's a discount so you won't have to worry about a cost difference between the price in your local store and the cost of ordering on line, on the phone, or through the mail.
"We pay the tax?" They're just letting you think you're getting away with something you used to, while giving you a legal discount by paying the tax for you. The tax still comes from your wallet.
Businesses that deal in enough volume are able to have a lower margin on each item they sell and still make a profit. Another way they give you a break is to include a bunch of freebies with a camera, such as a cheap bag, table tripod, cleaning kit, extra off-brand batteries and charger, memory cards... The price paid is the same, but you get stuff that some of their low volume competitors cannot afford to include. Whether the add-ons are usable is another story.
Price has an important psychological effect on our perception of value. Maintaining a high price by adding value (discounting an item by including tax, shipping, or other goodies) is a way to protect brand image while recognizing shifts in market conditions and passing on volume discounts.
Most businesses do some form of this. The portrait photo lab I worked for had a price list and a discount schedule. If you bought a million dollars a year in school portrait photofinishing services, you got an obscenely high discount. One of our dealers paid 22% less than the low volume folks. (He had 50+ teams of photographers and a HUGE retail volume.) His prices to parents could be lower than most competitors' prices because his costs were lower. Of course, there is a point at which such a customer becomes a huge tail, happily wagging the little dog...