An interesting discussion on Quora :
Is Amazon good for the online market? Does it crowd out smaller businesses or does it stimulate the online economy?
There is an argument that Walmart helps small businesses. There is a competing argument that it crowds out small businesses by undercutting them to a point where they can’t compete. I tend to side with the latter. But how about Amazon? Is this even an argument (yet)?
For the consumer, Amazon is a trusted brand and provides a safe and secure one stop environment for shopping online.
It does this at the expense of small businesses and the diversity that they bring.
Like supermarkets – product selection is limited to those with adequate margins and willing to comply with Amazon terms – take it or leave it. Companies like Tesco in UK have delayed payments to suppliers for up to a year in order to fund their own problems. So much power will be misused sooner or later and the losers are the smaller companies. The choice of items you can buy is then dictated by profit margin.
2 examples : A shoe chain had 95+% of the market. They import from Brazil at $12 and sell for $129. Poor quality, high price and no competition. I went to buy a quality woodworking plane – Can’t find one that isn’t made in China, therefor cannot make a quality product myself.
This is what global corporations do – exploit cheap labour to make huge profits at our expense. I want to buy a product for a lifetime’s use and I’ll pay, because it’s cheaper in the long run, and I like quality. However, all the ‘Quality’ companies can’t get on the shelves or reach me effectively, so I am herded into buying garbage. So the artisan supplier closes.
The pursuit of profit has reached stupid levels and the savings are not being passed on. A shirt from China costs $1 and sells for $20. A quality shirt made in your country costs $10 to make and the shops would want $200 for it. So we are deprived of quality and work so one person can buy a bigger ‘whatever’.
That’s why we need diversity instead of monopolies – it is better for society that we have quality, skills and jobs, albeit at the expense of someone’s mega mansion.
eComm suffers in that you and I can’t find the shop of the artisan. With 1 billion websites, how do find the artisan? He hasn’t the budget for fancy seo or advertising on tv, so how does he compete? I have friends who run a boutique beauty products store – 3 years later, they are closing because it’s too hard to be found, they can’t pay $2 a click and they work on an honest and small margin.
The global brands can afford the seo and marketing. Being artisan, they want to cater for ‘the locals’ but suffer their lack of a physical presence. I don’t see them, I forgot their name etc. In my case – 2000+ bookmarks, 1000 Evernotes and an aging memory and it’s a mission to find things. Amazon is easy and covers many bases from one url.
The second part is that ‘we’ are conditioned by the advertising agency to buy the latest gizmo – witness the iPhone phenomenon. People ‘need’ a new one each year because the advertisers are so good and have trained us, like Pavlov’s dog, to bay for short term rewards at the expense of common sense. UK houses average 86sqm – Australia 240sqm – because of advertising.
With less of us purists demanding quality, the local shop has a wider spread of shoppers, and I don’t drive past Witchita falls to notice their shop.
Last part is wages. With the globalisation of the workforce, your ‘real’ wages have dropped over the years whilst rent, utilities and the price of a T shirt has risen(anything supplied by a monopoly). So we have less money to buy the ‘right’ product and are forced to buy the cheap one.
As a sub $15 an hour worker at Walmart on a zero hours contract, I NEED cheap T shirts. I can’t afford the capital cost of expensive ones (even though they are cheaper in the long run) and Dad got laid off when GM outsourced their parts supply and Mum lost her job to the Chinese T shirt manufacturer, so we’re poor now.
Funny how they always say that outsourcing and global supply chains will benefit us, but, instead, the price remains ‘artisnal’ and the label says ‘Cheapest from China’. The company buyers are to blame – China can (and does) make some excellent products, but they cost more and the buyer’s mantra is “Cheaper, cheaper” instead of “This quality, how much for a good job”? The $1 shirt becomes 90 cents and the retail remains the same.
I do hope the hipsters and tiny house people produce a global revolution, using the internet, to return to ‘The good old days’ and drive the shysters out of town.
My dream is to see the banksters unable to pay the gardener because they have no skills currency to pay with and dollars are useless to the masses as nobody takes them because they are too scarce to trade.