Welcome to Blaine, the Town Amazon Prime Built

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From The Verge:

Roll off the highway into Blaine, Washington, and the first thing you’ll notice is Edaleen Dairy; on a summer day, a dozen people might be lined up outside waiting for ice cream. Across the street from Edaleen is 5D Packages and its competitor Mail Boxes Plus. Turn onto H Street, which passes for a main drag, and before you hit the US Post Office, you’ll spot 24/7 Parcel, Border Mailbox, and Security Mail services. Take a right at the post office and loop back around to Peace Portal, and you’ll also find Blaine Enterprises, Pulse Packages, and Hagen’s mail pickup.

That may seem like a lot of mailbox stores for a town of 5,000 people, but Blaine isn’t just any small town: it sits right on the 49th parallel that divides the United States and Canada. As the only US border town located in the shadow of a major Canadian city, Blaine’s economy is uniquely dependent on the relationship between the two countries. It’s a position that also leaves the town vulnerable to the vagaries of e-commerce trends and exchange rates. That vulnerability has only been exacerbated by mounting tension between Washington, DC and Ottawa, an emerging trade war, and the looming threat of a boycott.

For the past decade Blaine has flourished, thanks to the discrepancy between the explosion of e-commerce in the US and the still-developing e-commerce network in Canada. Blaine’s handful of residents have grown accustomed to a regular stream of Canadians who come to town specifically to pick up their US packages. For these Canadians, Blaine is simply a mailing address: the nearest, cheapest, and most convenient way to order packages from Amazon and other major US retailers.

But as Amazon continues to step up its Canadian operations and a growing number of American (and Canadian) retailers have made it easier to ship to Canada, Canadians are no longer as dependent on their US mailing addresses. Between economics and politics, Blaine will soon be forced to reckon with an uncomfortable question: is there a future for the town if it no longer serves as Canada’s front porch?

. . . .

It wasn’t too long ago that Blaine boasted only a handful of mailbox options. Then came the dawn of online shopping. As e-commerce operations for major US retailers like Macy’s, J.Crew, and Best Buy took off in the early 2000s, they tempted Canadian shoppers who were already familiar with the brands. Although Amazon hung out a shingle in Canada in 2002, its operations were initially limited by regulations intended to protect Canadian publishing. While Amazon.com expanded into more product categories, Amazon.ca contained only a tiny fraction of its US offerings well into the 2000s. And Canadian retailers were in no rush to match the e-commerce boom of the US: imagine selling to a population the size of California’s, but shipping products across the entire land mass of the United States. (Amazon did not respond to a request for comment.)

As a result, Canada’s armchair shoppers were left to drool over the online offerings of retailers to the south — many of which, if they could be delivered to Canada at all, arrived with an unpredictable bill for shipping, taxes, and / or customs duties.

. . . .

I’m one of those cross-border e-shoppers. As a dual citizen who has spent many years living on each side of the border, my Blaine mailbox, Trader Joe’s, and Target runs have allowed me to scratch my American retail itch even after settling in Vancouver. My family set up our Blaine mailbox in 2010, and we now make monthly pilgrimages to pick up such elusive goodies as Hanna Andersson’s kid clothes (cheaper to ship to the US), a round of Rent the Runway outfits (won’t ship to Canada), or a new set of drinking glasses (so much more expensive on Amazon.ca, you wouldn’t believe it). These pilgrimages became even more frequent when Ben & Jerry’s stopped distributing New York Super Fudge Chunk in Canada. Once you’ve committed to hitting Blaine for a monthly ice cream restock, you might as well order some shoes, board games, or toilet paper from Amazon.com.

. . . .

[Jeffrey Lazenby, the city’s revenue officer] traced Blaine’s revenue windfall to a sales tax agreement that was put in place in the mid-2000s which allowed states to levy sales taxes based on where a package was delivered, rather than where it was sold. Though the agreement only led to municipalities keeping a sliver of those state sales taxes, that sliver can really add up when you’re the point of delivery for tens of thousands of Canadian residents. In 2017, Blaine collected nearly $1.7 million in sales tax, which is two to five times the amount collected by comparably sized towns not on the Canadian border.

That $1.7 million in sales tax isn’t all earned from Canadians who are buying discount housewares on Amazon: some of it comes from local purchases or online purchases by actual residents of Blaine. But between the sales tax and a penny-per-gallon gas tax that’s largely paid by the many Canadians who cross the border to fill their tanks, Lazenby calculates that taxes paid by Canadians make up 5–10 percent of the city’s revenues. And that’s just the direct revenue. Lazenby estimates that three-quarters of Blaine’s employment is related to the border in some way.

Link to the rest at The Verge