When I came to AWS four years ago, my first major assignment as the only educational developer on staff was to create the Certified Welding Sales Representative course. Over the next several weeks I interviewed countless sales representatives, managers, regional directors, and presidents/ owners of welding and gas distributors throughout the US to understand what sales representatives needed to know and why. During these conversations one topic kept coming up: the impact of internet based welding distributors on brick and mortar businesses.
These conversations came back to me yesterday when the United States Senate approved the Marketplace Fairness Act, which requires that all companies with more than one million dollars in online and catalogue sales pay sales tax in states where their products are shipped. The bill’s authors claim that passing this piece of legislation will balance the marketplace for brick and mortar stores which are losing more and more business every year to online retailers. Regardless of what the politician’s claim, the actual impact of this new law will not be seen for some time, but this does bring up this issue to light. How can smaller brick and mortar welding and gas distributors account for the overhead of a storefront and a sales staff and still compete with online distributors?
Over the last two decades the growth of online businesses has grown astronomically. In the US, online purchases account for sixteen percent of all purchases. Much of these purchases go untaxed. Since online distributors are not required to collect a sales tax on online purchases unless they also have a physical storefront in the state where the purchase was shipped, oftentimes that responsibility falls on the consumer. In many states, the purchaser is expected to remit the equivalent of the local sales tax to the state government when filing their tax returns. Consumers are expected to keep track of everything that they purchase throughout the year and send the government a check at the end.
But this system is almost impossible to enforce, meaning that these taxes are rarely paid. Additionally, most consumers don’t even know that these rules exist. So while the last thing I want to do is give the government more of my money, it does create a price differential for the same products purchase in-state. For example, if I purchase a welding power source for two thousand dollars at a local Florida welding distributor, I would be expected to pay seven percent in sales tax, or one hundred and forty dollars. If I order the same power source from an out-of-state online retailer I would not be expected to pay the sales tax directly to the online company, and it would be up to me to remember to add those one hundred and forty dollars at the end of the year. (As a side note to any IRS agents reading this blog: I always pay these taxes. Thank you. You’re doing a bang-up job.)
The saving from the sales tax on the power source is compounded by the discounted price of not having to cover the overhead cost of a brick and mortar store. So again I ask how is a local welding and gas distributor expected to compete? Will this bill help the small business, or just drive up costs for consumers? I honestly don’t know, but I do this: online distributors rarely have the same one-on-one relationship with customers as local businesses. And this is the one part of the equation that benefits the local companies. While a small reduction in price is nice, having a sales force that can aid customers in setting up equipment, advise on best practices, help reduce costs and increase productivity, and provide in-person technical support is also quite beneficial. This is why programs like the Certified Welding Sales Representative are important.
The CWSR program is designed to teach sales representatives the technical and scientific aspects of the equipment they distribute. The CWSR course covers welding terminology, electrical theory and power sources, shielding gases, SMAW, GTAW, GMAW, FCAM, SAW, WPSs and PQRs, Brazing and Soldering, and a variety of cutting processes. The core purpose of the program is to establish a technically proficient and well educated sales force capable of adding value to customers. The AWS certification provides customers with a sense of security in knowing that their sales representatives validated this knowledge through the AWS certification process.
Never has it been easier for sales representatives to gain the knowledge and certification needed to add this value to customers. The development of American Welding Online and the CWSR online seminar and exam allows sales representatives to work through all twenty-three hours of educational content on their own schedule and pace. The program is designed to allow the user to control their educational experience, making sure that they can skip information they already know and review information they may not have understood the first time around. CWSR is also the first certification program provided by AWS that allows the user to take the certification exam through the AWS online system. From beginning to end, a sales representative can increase their value and become certified without having to leave their home. Regardless of where you fall on the online tax debate, one thing is certain, in this competitive marketplace, every advantage counts.