We Take a Look at the Big Topics of 2022 That Shaped Ecommerce

We Take a Look at the Big Topics of 2022 That Shaped Ecommerce

It’s a new year. Dave and I are taking a look back at the biggest topics of 2022 and offer our views on how these shaped ecommerce and online marketplaces last year. Inflation

Dave: We can’t talk about 2022 without mentioning inflation. On a global scale, countries have felt the pressure of rising prices across the board with much of Europe especially being hit with an energy crisis largely caused by sanctions on Russia and the ongoing Ukraine conflict.

While the direct impact on the US hasn’t been as bad, the knock-on effect for global supply chains and rising prices in logistics have certainly hit our borders. The effects have been getting steadily worse throughout the year as even larger companies such as Shopify and more recently BigCommerce have announced mass layoffs to try and remain profitable.

The flip side of this though is as consumers are being more price sensitive they are being much more considered with their buying behaviors. Despite inflation and the rise in the cost of living 2022 still saw a record breaking Black Friday sales period which was certainly welcome news for many ecommerce business owners.

We are certainly not out of the woods yet, and it looks like inflation worries will continue into 2023, however, if ecommerce business owners can remain calm, adapt to challenges, and pivot as necessary to the ebb and flow of the market, then they will make it through the other side.

Richard: Inflation was one of the biggest stories globally in 2022. While people often blamed their government for not doing enough to combat rising prices, the reality is that the higher-than-normal inflation resulted from pent-up consumer demand, supply chain disruptions, a tight labor market, and energy prices skyrocketing as a result of sanctions placed on Russia after its unlawful invasion of Ukraine.

The US actually has faired a lot better than Europe as a whole, especially when compared to major European economies such as the UK, Germany, and Italy.

I think one of the shining examples in 2022 of how inflation affected online businesses was when Amazon introduced policy changes for Amazon FBA and its related logistics services.

The company added its first-ever fuel surcharges in April, slapped its first-ever peak season surcharges on FBA shipments in October, and in December announced a massive 2023 price increase for its 3PL solution, Amazon MCF.

However, there is some slightly positive news. We’ve been tracking online inflation via the Adobe Digital Price Index and over the last quarter in 2022, there has been significant easing in the US. It will still take some time before it’s back to “normal,” but there is a glimmer of hope now for 2023. 1099-K Chaos

Richard: When Congress changed the law requiring third-party settlement organizations (or payment processors) as well as most marketplaces that manage their own payment processing, to issue a 1099-K to sellers on gross revenue of $600 or more, it opened a can of worms.

The media often focused more on PayPal and Venmo, which were equally affected by the regulation, versus eBay, Etsy, and other marketplaces. But the impact on marketplaces meant this new lower threshold was making many casual sellers rethink selling on them.

While there was interest in Congress to fix this problem, in nine months nothing happened, requiring the IRS to step in at the last moment, and at least provide a one-year relief on the issue.

But the problem is that without clarity on the 1099-K situation, many sellers that would be selling personal items out of their attic or garage will likely continue to sit on the sidelines because they are not sure what will happen next.

Those types of sales are typically not taxable, and the IRS has provided no guidance on how such casual sellers should declare the 1099-K form on their tax returns. At least a higher threshold would give folks who want to turn unwanted stuff into cash some breathing room before they have to worry about tax return implications.

I fear Congress will continue to punt on this issue, and all the IRS has done is kick the can down the road, which is the only thing they can do under the law. There needs to be clarity for casual or hobby sellers who just want to declutter and make a little extra money.

And for those sellers that are selling goods at a profit (running a business, even if very small), their whining about the low 1099-K threshold is absurd. The tax law is clear, make a profit, and pay income […]

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