As I sit here and write this with only 2-days left in 2012, the politicians in Washington are still arguing over the Fiscal Cliff. There are days I wish we could just push the politicians off a cliff and start over again.
Higher Taxes Coming on All of Us
No matter how the negotiations end up –one thing is for certain. Taxes are going up on everyone. And that does not bode well for sales in 2013. When you tax something you get less of it. States are rising sales taxes = fewer sales. Income taxes going up = Less disposable income. Less disposable income means lower sales.
Energy Prices Falling
On the good side however, is that energy prices are continuing to fall and that is something that puts money directly into consumer’s pockets. As long as economies around the world are growing slow, oil prices should continue to fall. It that happens enough it could be enough to offset the tax increases we will see and then the effect on sales would be neutral.
Online Sales Will Continue to Cannibalize Brick and Mortar Stores
The numbers are in, and in the Holiday selling season that started in November, Retail Store sales were flat to down depending on which part of the country you are in, but online sales grew a respectable 16% over last year. I saw this first hand as our November/December sales on Amazon were up 22% over the same period last year. eBay did not do as well this year. We won’t know the numbers until late January when eBay reports , but our personal eBay sales were only up 2% over last year. A lot of my readers wrote me that they were seeing the same thing. Leave a comment and let us know how you did this year.
So to summarize – Taxes going up – bad for sales, Energy prices falling – good for sales – Online stores taking business from traditional retail stores – good for us, bad for them.