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Small Business and the Marketplace Fairness Act


If you listen to the scary emails being sent by massive online businesses like eBay, I should be panicking right now. They say that the “Marketplace Fairness Act of 2013” will hurt small businesses like mine. In actuality, I agree with the Washington Post editorial that says this bill is an excellent move, and I’m happy to explain why.

First, what is it? The Marketplace Fairness Act, in simple terms, says that all businesses that make $1 million or more per year in interstate sales must collect sales taxes on those sales, and that states have to simplify their sales tax rules and procedures to make that easier for the businesses collecting the taxes.

I think this is a good idea because it puts everyone on an even footing. If you’re living in a state with an 8% sales tax, why should some out-of-state business get an 8% price advantage over the local businesses? With this bill, everyone would have to live by the same rules.

It also eliminates the loopholes that some of the huge companies are using. Currently, a business that has a physical presence in your state must collect sales tax there. So big chains incorporate their online business separately from the brick & mortar business — or set one up as a subsidiary of the other — and the rule doesn’t apply to them. With the Marketplace Fairness Act, the business’ physical presence (or lack thereof) in your state is irrelevant. With the exception of the individuals and small businesses that eBay and Etsy were created to support, everyone collects the taxes.

Columnists like Jeff Jacoby rail against the Act, but they either misunderstand or intentionally misrepresent what’s going on. In the linked editorial, Jacoby claims that small businesses will have an onerous burden placed upon them in sales tax collection, but he’s ignoring factors like:

  1. “Real” small businesses (those that do less than $1 million per year in interstate commerce) are exempted.
  2. Even the bigger “small” businesses (those doing less than $10 million per year interstate) are unlikely to have developed their own software for this. The major shopping cart players, including eBay, PayPal, Google, and their ilk, take care of sales tax for their customers.
  3. One of the requirements in the mandatory simplification of tax collection by the states is that each state have a single uniform tax base and a single point of contact within the state for sales tax collection. There aren’t going to be 9600 different jurisdictions to keep track of, as Jacoby claims, but 50.

Technically, you could say I don’t have a dog in this fight. My bookstore is in Montana, a state that doesn’t have sales tax. I still support the bill, however, because it bothers me to see the government effectively giving massive tax breaks to giant businesses like Amazon. I’m not just blindly following the position of the American Booksellers Association and all of the others who support sales tax fairness, though. I feel it’s the right thing to do.

When I travel, I like to stop in small local retail businesses wherever I go. It provides a local flavor that the chains don’t. When I go into a Barnes & Noble in Denver, it looks just like the ones in Orlando or San Francisco or Dallas. The independent bookstores, however, are dramatically different in all of those places, and I don’t like seeing them being killed off because the Federal government gives online booksellers a subsidy to compete with the established local businesses.

Do I have a problem with competition? Heavens, no. If a local store has a level playing field and can’t survive, that’s the way things work. But when their competition is offered an unfair advantage, I do have a problem with it. The Marketplace Fairness Act eliminates that unfair advantage.

The Wrong Way to Promote Your Book


I originally wrote this article for Writer’s Weekly back in 2003. It can be seen in its original form on their website. I’ve placed it here on my blog because of something that happened last month that got me thinking about it. See that story at the end of the article.

Websites for writers and publications like WritersWeekly.com are filled with information about scams perpetuated upon writers. We see everything from “contests” that bilk money from aspiring writers to markets that never pay the promised compensation. One subject that’s rarely discussed is scams perpetuated by writers.

Often, a new writer will come up with innovative “out-of-the-box” ideas for promoting a book without realizing that (a) they may actually hurt sales and (b) it’s been done many times before. “Scam” is probably too harsh a word for many of these ideas, but some of them are downright unethical and illegal. That’s what we’ll focus on in this article.

The book buyers at the big chains like Barnes & Noble and Borders have seen it all. It’s hard to pull anything on them that hasn’t already been tried. You may assume that owners of small, independent bookstores exist in a vacuum, but that isn’t the case, either. Over 1,200 independents are members of the American Booksellers Association, and members communicate through newsletters and online members-only message boards.

Do we really do this? Yep. There are regional book shows around the country, and owners of bookstores do sit around and share tales of scam artists and unethical book signing conduct. If you own or manage a bookstore, I’d recommend joining your regional association. My home state of Montana is claimed by two regional associations: Mountains & Plains Independent Booksellers Association (MPIBA) and Pacific Northwest Booksellers Association (PNBA).

Some authors have placed false orders for their own books through bookstores, hoping to pump up sales. Since most POD (Print On Demand) books are non-returnable, they figure the store will be stuck holding the bag and that they can pocket the royalties on the “sales.” This is actually inaccurate. Bookstores that are the victims of this scam WILL return the books and they WILL receive credit from the distributor or publisher. If they don’t, the bookstore will alert their fellow bookstore owners and everyone else in the industry to not do business with that distributor, publisher, and author. If your book is involved in this type of scam, you can kiss your future as an author goodbye, because nobody will do business with you. There are blacklists of authors in the industry and they are shared.

Authors may also face legal consequences for scams like this, and it isn’t difficult to prove who perpetuated a scam. Despite the huge number of books published every year, the publishing industry is a small world. Bookstore owners, book buyers, and librarians communicate with each other, and are eager to press charges if it will drive unscrupulous people from the business.

I spoke to one POD publisher who found out that one of their authors had tried this stunt. They instantly canceled the author’s contract and alerted the distributor and the bookstores of the attempted fraud. Rather than building up thousands of dollars in royalties, the author ended up with nothing; no contract, no book and, of course, no royalties. Not only that, but there are now hundreds of bookstores that will never order one of that author’s books, even if they do get it republished (which they probably will not).

I don’t want to imply here that all, most, or even many POD authors behave unethically. The overwhelming majority are honest people trying to sell their books the right way. It’s a shame that scam artists make so many bookstore owners and managers nervous about POD.

Needless to say, this scam can’t be pulled off at all with returnable books. Even if the author’s timing is perfect, and a royalty check is issued before the books are returned, the returns will show up on the next royalty statement, and the author will have a serious problem and some explaining to do to the publisher and bookstores.

There are plenty of variants on this scheme, like the “I’ve been getting lots of people from your town looking for a place to buy this book” lie and the ever-common yet never-believed “I used to live near your store and I have a ton of friends and family that want to buy copies from you.” The common factor in all of them is trying to trick a bookstore into ordering a stack of non-returnable books that they may not be able to sell. And, like I said, they’ve heard it all. I got one such call and told the author if he’d send me the list of people who called him, I’d be happy to get them the books right away. As it turned out, he didn’t even know where my store was located.

One author contacted a bunch of small bookstores and organized book signing events. The stores ordered stacks of books, and the author canceled the events. Now, many stores tell authors to bring along their own books, and they don’t order anything up-front unless it’s arranged through a publishing house they know. The author who pulled of this scheme will never have another book signing.

Another trick is misrepresenting the content of a book. A store thinks they’re ordering a big fat book of local bicycle trails, and they get a 60-page book of trails (and only one of which is within 100 miles of that town). A scam like this might work once, but if it does, your name is mud.

Another dishonest “program” that’s making the rounds is authors trying to get everyone to buy their book from Amazon.com within a 24-hour period in an attempt to get on the Amazon.com best seller list. Trying to twist the outcome of the Amazon best seller list in this way is unethical and does not represent a fair and legitimate tally of daily sales for your book (meaning calling your book an Amazon.com best seller when you tricked the system is being dishonest to your future readers and to the press when using this statement on your press releases). Booklocker.com is one publisher that won’t allow its authors to scam the Amazon.com system in this manner, and other reputable publishers are following suit. The scam is now so well-known in the industry that an author that claims to have an Amazon.com Best Seller is now considered by many to be dishonest unless it can be backed up by data spread over a period of weeks or months.

It’s unfortunate that some authors feel the need to lie to and steal from others in this way. It hurts all of us, and makes bookstores much more wary about stocking POD books at all. When marketing your book, remember that the tried and true methods are the most successful ways to market your books and achieve an excellent reputation: pound the pavement, pay your dues, send out press releases, arrange book signings, take out ads, and arrange radio interviews. I have sold thousands of copies of my self-published books by attending trade shows, putting on seminars, and marketing through my website.

Treat others the way you want to be treated, and market your book to others as you would want other books marketed to you.


So what happened last month that got me thinking about this article? A small publishing house that my bookstore buys directly from gave me a call to tell me about a new book they had out. It’s not the kind of book I normally sell, but it is local-oriented, so I had them throw a single copy in with my next order. When the book arrived, I took a look and decided not to carry it in the store.

A few days later, someone called and asked if we carried the book. I said I had one, and the caller asked me to set it aside to pick up later that day. I set the book on the desk, and nobody showed up to get it. The following week, another call asking if we had it, and another “customer” who never showed up to get the book. This happened four times in three weeks — always people I didn’t know who never came in.

Was it the author (plus friends and family) calling me, hoping to get me to place a larger order? I’ll probably never know. But I most certainly won’t be ordering books for inventory based on phone inquiries like that, and I view that publisher with a bit of suspicion now.

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