June 30, 2011, 12:00 AM

Fulfillment Services

(Page 2 of 2)

Of those who do not sell overseas, about 25% are put off by regulatory and logistical complexities. That includes issues related to fulfillment, such as restrictions on shipping certain kinds of products like nutritional supplements. But with nearly 63% of respondents who do not currently sell overseas planning to within the next two years, those obstacles will have to be overcome.

Warehouses and taxes

Another potential obstacle for e-commerce fulfillment involves taxes. Some states are trying to tie distribution facilities to the collection of online sales taxes—that is, requiring that an online retailer that maintains a warehouse in a state, even if operated by a subsidiary, to collect and remit taxes on purchases made by residents of that state.

Amazon announced that it would close its distribution center in Texas and cancel plans for others after the state legislature passed such a bill this year. California was considering similar legislation this summer.

Other states are more focused on luring new jobs. South Carolina recently passed a law exempting Amazon from having to collect sales taxes from state residents in exchange for the No. 1 online retailer's commitment to invest at least $125 million and bring in 2,000 new jobs as it builds new fulfillment centers in the state.

In all kinds of ways, fulfillment has become a big money issue for online retailers.

thad@verticalwebmedia.com

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