Amazon: The killer of American business
Almost everyone purchases something online. The convenience is hard to resist; just type in what you want to buy and a list of sellers pops up. All you have to do is click on the cheapest price, pay with your credit card and in three days the package comes to your door. No driving to the store or walking through a mall for you, just sit in your lounger and click away. Consumerism at its laziest!
The biggest online seller is Amazon.com, which literally started in the garage of Jeff Bezos in the 1990s by selling books online. Since people still read hardcover books back then, Bezos made a lot of money. He then acquired a number of other companies that allowed him to expand his inventory to CDs, shoes, knock-offs and liquidated stock. Apparently, America’s appetite for cheap goods knows no bounds.
You may think this is just an example of American entrepreneurship, just capitalism at its best. My opinion is that it signals the end of brick-and-mortar retail shops. The era of walking into a building with shelves filled with goods and real people to help you find what you need is over. Why buy or rent a physical building and hire people to run a business when all you need is a virtual storefront, some storage space, and the ability to stuff a box and affix postage?
Amazon is a threat to those who work in retail. At least 10,000 workers have been laid off at Macy’s. Some 4,000 workers lost jobs at The Limited. Sears and Kmart have announced that some 150 stores will be closing. Radio Shack and other outlets have also downsized. The past two years have seen over 125,000 jobs lost in the retail sector, and those jobs don’t reappear in Amazon.
More disturbing is that Amazon wields a power never before seen in business. Amazon has inserted itself into the infrastructure of the American economy. Its Web Services division provides the cloud-computing platform for much of the country, with influences from Netflix to the CIA. By controlling the infrastructure, Amazon competes with other companies and sets the terms by which rivals can market. It plans on involvement with payment processing for other e-commerce businesses.
Amazon uses its power to eliminate competition. Businesses now must start Amazon storefronts to become third-party sellers. Other storefronts obtain products from legitimate manufacturers and sell at prices that undercut these businesses. This forces a downward spiral of matching lower and lower prices, eventually leading to loss of brand value and loss of profit for the manufacturer. Amazon encourages price competition. Value is nothing, only price.
I have experienced selling on Amazon. I didn’t like it and tried to stop. Then I find other Amazon sellers selling my products online at steep discounts. You can’t find the people behind the stores to confront them, and you can’t easily stop them. If you do find them and complain, they often post negative reviews to punish the manufacturer.
Before you buy on Amazon, consider this. If price is your primary driver, contact the manufacturer of the product and offer to buy the product at the Amazon price. More than likely, they will be happy to do so. They would rather sell the product to you at the lower Amazon pricing than supply the Amazon seller with product at the much lower wholesale price. You will also get a legitimate product with full warranty and return information that is not always possible on Amazon.
More importantly, you may keep a business in business.