Introduction
I remember the early days of internet shopping. It was a terrible experience.
Wading through badly designed websites, each one entirely different, it was often hard to find what you were looking for even when you knew exactly what you wanted.
In some cases, even if you made an account with the site, you would end up having to enter your entire payment details each and every time you used it.
In some cases you would have to then telephone the business to confirm all the details once again.
Then there was the hassle of figuring out how much extra you would have to pay for delivery, followed by the long wait for what you bought.
Next day delivery (UK) was not expected in those days - even if it was available you had to pay a hefty price for it.
In those days many businesses saw internet retail as an extension of mail order catalogue shopping - in that business model it was not unusual to take 14 days to deliver items (sometimes even more).
The whole experience was often the exact opposite of convenient and sometimes enough to make you give up and just visit a physical store.
Then Amazon appeared.
It started as a bookshop that sold books at a discount. I used to use them to buy textbooks and marvelled at how quick and reliable they were.
Most importantly they got the user experience right (at least they did when I started using them).
It was easy to find what you wanted and there was no struggling with the site. The fast delivery was the icing on the cake.
Despite all of that I never imagined that they would grow to be the retail behemoth that we see today.
Dealing with the Devil - the Amazon Tax?
We use Amazon because they give us choice, value and most importantly convenience.
Many people I know use Amazon as their first stop for making any purchase. Often if they can't find something on Amazon they won't even bother checking elsewhere.
Others visit physical stores to look at items and then buy them on Amazon. It is no wonder that regular stores and vendors are struggling.
More and more smaller retailers have found that the only way that they can survive is by selling their items on the Amazon Marketplace and Amazon takes a large cut of what they sell.
If you have ever sold anything on Amazon you will know just how high their fees can be.
Some sellers call it the Amazon tax.
You don't have to sell your items on Amazon, but you may have to if you want to give them visibility.
Sometimes you have to "make a deal with devil" in order to survive.
At What Point Does A Business Become Too Big?
Most people would consider that a monopoly is a bad thing.
Monopolies have a tendency to stifle competition and even if not right away, the eventual result is less choice and higher prices for consumers.
Without any real competition the monopoly has less reason to innovate and improve - after all why bother, when you don't have to?
Amazon is unlike any other monopoly we have previously seen. In the past monopolies were generally confined to one or at most a few product areas or categories.
It simply wasn't feasible for any business to monopolise multiple areas at once.
The internet revolution changed that and Amazon were one of the first companies to understand that and take advantage of it.
The Monopoly of Monopolies - the Next Generation of Search
There are relatively few areas of the market that Amazon has not conquered and they tend to be very aggressive in moving into new markets.
First they sold books, then electricals and household items. More recently they have moved into groceries and TV/movie production.
They also own the main cloud computing platform (AWS) that many other businesses use as a vital part of their infrastructure.
Perhaps of even more concern is the fact that through their Amazon Alexa service they may have fired the first volley in the battle for the future of search with their AI assistant, Alexa.
People are concerned enough about Google's search dominance but it seems in this regard Amazon has the lead on Google.
Through devices like the Echo, Amazon is not just on your desktop or mobile device. Now they are physically in your home listening to everything you say.
How much of your information do they store? What exactly do they do with it? How secure is it?
Ultimately it gives them an even greater level of power over their customers than they currently have - as a recent murder investigation highlighted.
Despite these concerns the Echo devices have been a massive success and companies like Google and Apple are scrambling to catch up - but unlike Amazon, they are much more reliant on others to sell their devices.
Sure Apple has their physical stores but I doubt they can compete with the online selling might of Amazon, particularly when it comes to cheaper items. - The Echo is significantly cheaper than what Apple can offer and for good reason.
This is because unlike Apple, Amazon doesn't have to uphold a premium market image.
They sell to everyone and at all price ranges. Apple can't sell anything that looks even remotely "cheap". That is not their brand.
Google doesn't have the same problem but they also don't have their own stores and their previous attempts at hardware (e.g. Google Glass) have not exactly been successful.
Unless there are some changes it looks like Amazon could "eat Google's lunch" and there don't currently appear to be any viable competitors who can take them on.
Faustian Pacts and Bum Deals
In much of western mythology there is the idea of making a deal with the devil.
No matter what the exact terms are or what you get in return, the ultimate result is that you end up getting the "bum" end of the deal.
When you make a faustian pact, the devil is the only winner.
Whilst Amazon may not dominate groceries, TV/movies or music streaming to the degree that they dominate electricals/home items I think it is entirely possible that they will in the future.
The addition of Alexa based products and the potential for them gaining a big chunk of the (currently Google dominated) search market makes it even more likely.
People may argue about Google favouring their own content in search results but there is no doubt that if you want to buy something Alexa is only going to direct you towards Amazon products.
Conclusion
Even putting aside the business and competition issues, is it right that any one single organisation should have a hand in so many domains of life?
If everything you use, consume, watch, listen to is sold and even created by a single entity then how much power do they have over you?
Should they? Is that a good thing? Can we trust them to have our best interests at heart?
I don't have any answers or solutions to this issue, I just think that it is worth thinking about.
So far most governments have not had the guts to stand up to Amazon (or indeed most other mega-corporations).
At the most they have received a very mild corporate "wrist slap" for anti-competitive practices.
Further it seems most of us are so enamoured of the convenience that Amazon gives us that it makes it hard to turn away. -I know I am just as much a sucker for this as the next person - we are all time limited and have a tendency to take short cuts.
Next time you go to buy something from Amazon ask yourself if you are doing something that is good for you long term.
That short term convenience may cost us a lot more in the long term.
Thank you for reading
Amazon is my all time favourite shopping site.....it is the first site which comes to my mind whenever i want to purchase stuffs.....thanks for the post
Mine too but is good to use just one company in the long term?
Amazon has gotten to big. Soon the monopoly will be evident.
in terms of logistics, amazon delivers the quickest.
Excellent article and you bring up many valid concerns. Knowing that the sole purpose of a corporation is to make money, I think it's very easy to deduce that our best interests (the consumer) are not at the heart of the matter. There comes a point in time when a company gets so large that all their decisions in essence become binary in nature. It's all about making more money and taking a larger part of market share. That's it and that's all.
This goes against my capitalist beliefs, but I say yes that a company can become too big. There are exceptions to every rule and as the evolution of business continues to develop, we are seeing some of these pitfalls occur in real time today.
The shortsightedness of business is what's most concerning to me presently. The larger and medium sized corporations are inter-locked in their survival of the fittest economic warfare that they are failing to see the long term ramifications. They keep cutting, cutting, cutting, to gain a competitive leg up or to just keep pace with Amazon that eventually there will be no one left with meaningful employment to buy their products or services. You can only cut overhead in the form of materials so much that they are turning to human labor as their last line of defense. I feel that inflationary pressures are also largely to blame for this. The runaway money printing is decreasing the value of fiat dramatically, even though you'll hear this mentioned on MSM. The costs are simply going up for everything, so in order to remain competitive, they must cut costs somewhere, and human labor is the last line of defense.
We have a major problem on the immediate horizon with Amazon and some other large corporations. When Mcdonald's starts installing self serve kiosks to cut down on human labor to maintain a competitive advantage, your warning bells should start going off in your head. They're simply cutting their nose off to spite their face by thinking short term and not long term in solving their problems, but in their profit only way of thinking, it's makes perfect sense to them, until it doesn't
I live in New York - Manhattan to be specific. The vast majority of McDonald's have already installed these self serve kiosks. And it's not just fast food. Home Depot, CVS, Whole Foods, and just about every other large store utilizes self serve kiosks. One might say these aren't quality jobs to begin with, but that paycheck means something to a lot of people who live in the outer boroughs.
Darwins theory is becoming transparent.
Wow that is an amazing answer, worthy of a post in itself. Can't really add much.
The idea of short sightedness applies not just to business but to government too. It seems to be recurring theme in modern society.
It is partly also responsible for the type of boom and bust cycles that we see in major economies too.
boom bust cycles are also, always and everywhere a monetary phenomenon, (along with our human condition of course)
both business and government are shortsighted institutions by design.
Only the next earnings report, or the next elections matter
Not sure how this fits into the topic.
well, I am not sure how I am going to make you privvy to it then.
I did try, if you like, there's a more elaborate post in this same comment thread...
(responding directly to the comment that you did)
I am happy to try to explain further, but I don't understand why you think a discussion of the boom bust cycle, and it's ultimate or root cause doesn't fit into a discussion about same,
and well,
I am unsure where to go from here.
happy to stay out of your posts and comments if you would prefer
No don't stay out and I don't mean to seem harsh it is a fun discussion (I didn't mean any harm) I'm just not sure how it fits in directly and wanted you to elaborate:)
did you see the other comment and feel like you understood the connection?
Writing about these themes is not my game, only reading about them usually.
but I'll have to practise my communication skills around these topics, as I think I have plenty to add to this sort of conversation.
I think the effects of monetary policy are often dismissed as irrelevancies, when they are actually the root cause of the phenomenon in question, such as, in this case, the rise and rise of the mega-corp
would never have happened without the distortions caused by many years of zero interest rate policy.
No company could have done what amazon has done in a world with historically normal interest rates.
the capital would have wanted to see return on capital, if there was an alternative.
and as Bill Bonner calls it, Amazon is the river of no returns.
I'm not saying that amazon didn't do what they should have or anything else, just that they couldn't have done it without free money.
The solution to monopolies in Saskatchewan, where the geography is vast, and the population sparse, has been to create Crown Corporations. In Amazon's case, this is their single payment system to reach many retailers, which solves the problem of reinventing the wheel each time a vendor wants to collect payment online and ship goods.
It makes little sense to put in multiple electricity delivery wires, or multiple natural gas pipes to the same locations, so sharing the infrastructure becomes a social concern, especially when a single privately held corporation has that level of basic control. Amazon is clearly too big (to fail, ugh), so what are we going to do about ensuring the public has a hand in making it run equitably?
nothing, unless you want to buy into amazon and try and change it from the inside.
what is the idea of a business running equitably? it has been tried and mostly has failed, or eventually become so successful as to turn into the same old old
you almost got there and then you turned in a different direction. It is entirely a monetary phenomenon.
Zero percent interest rates mean that capital has no value, zero, literally.
This allows, nay, forces distortions such as the rampant off-shoring and automation as the money is free to organise these sometimes massive changes, and any company not going there will be punished by the shareholders, who as we know, usually don't have a long term vision.
And probably punished by various levels of government bureaucracy too.
Companies are not cutting off their noses to spite their faces, they are acting in their own best interests in an unheard of monetary regime.
Think about Nirp, for just one second (Negative Interest Rate Policy) the idea that you should pay every year to let someone else use your accumulated capital.
not in any reality does this make sense, yet there is some huge quantity of negative yielding bonds in the market right now. I just looked for a current figure and was not successful quickly.
but it's trillions.
just my two cents
Very enlighten post.
Do I think that Amazon has grown too big? Yes.
Are they providing a service that consumers want? Yes
Something that I always bring up with a discussion of Amazon becoming a monopoly. The markets that Amazon is entering, what are they doing to innovate that field to improve the customer experience and streamline the process?
Everytime that Amazon enters a new market, they are finding a better and more efficient way of how to run that business.
What is the most inconvenient thing about going to the grocery store? Waiting in a checkout line? Not anymore, just pick up your purchase in store and walk out, check out kiosk not required. Better yet, you can order online and have it delivered to your door.
What are these businesses doing to keep themselves competitive with the market? If someone comes along with a better way, of course eventually you're going to lose ground to them.
The market requires you to always grow and keep changing. When you become stagnant in your ways and think no one can touch you, that is when you lose.
Very critical areas that we all should think about. Small shopkeepers and startups have been failing due to the giants like Amazon resulting in unemployment and social disequilibrium. Though Amazon isn't in my country but recently Ali baba has decided to come to Pakistan and small local eCommerce websites have started selling their business to Ali baba. Even the the most famous eCommerce website daraz.pk in Pakistan is selling itself to Ali baba, the amount is in millions and they know that they can't compete with Ali baba.
But the sad story is we can't do anything to stop this!
Not true. Small businesses don't fail due to big business. They fail because they don't find a niche and market themselves to their own niche. Instead, they try to compete with the Big Boys. Find your own niche. Find success. And don't worry about the big boys, they'll take care of themselves.
I disagree. Unless you are in a service oriented business, niche or not, success will be much much harder.
Yes it appears there is a kind of unspoken agreement where Amazon will carve up the Western markets and Alibaba will take the Eastern ones.
Yep 100%
do you reckon? but can they be blamed for pulling customers
Not sure what you mean.
Yes, way too big IMHO. And AWS isn't making their competitors very happy either. I know Walmart was more than a little ticked over having their proprietary data sitting in the AWS cloud.
Interesting! Thanks for the link - I hadn't seen that story.
I had heard about the murder investigation and don't know who prevailed (Amazon or Law Enforcement) in terms of releasing the data.
What I'm most confused about is the apparent lack of concern people seem to have regarding their privacy. Do they think that it's entirely OK for a corporation to be able to listen in on every aspect of their lives, (i.e. what they say, where they shop, what they buy) as long as it's not a government doing the snooping?
I also read an article recently saying that the government is looking at Amazon as a potential anti-trust target.
My experience with them over the last 4 or 5 years selling items is that their fees, when you consider the deeply discounted shipping costs to get my products to Amazon's distribution centers & the logistical support they provide are competitive.
Amazon also deals with the myriad of different US State sales taxes for me (each US state has it's own version of something comparable to VAT).
Jeff Bezos may very well be the John Rockefeller of the 21st Century but I'm not in a position to pass judgement on the evil/righteousness ratio on either of them.
Seems most people don't care.
I have heard the opposite from other sellers. I think it may vary geographically - my own personal experience is that it is actually quite expensive and cuts significantly into what you make. Further for if you use Amazon fulfillment you have to pay them for storage too.
Some of these opinions may be coming from people who don't have a lot of experience actually running a profitable business on a day to day basis. There's a world of difference between selling something on Ebay as a hobby and actually having a business.
I can make a much better hamburger for less money than what I can buy one for at McDonald's. That doesn't mean I can run a profitable international business that employs tens of thousands of people.
I can't speak for the rest of the world but I can get some pretty good deals on restaurant equipment here in Murica buying it from failed restaurants. Being able to cook isn't a guarantee of success.
And I minimize the Amazon storage fees by monitoring my inventory and only shipping adequate quantities when they're needed. I have made mistakes and ended up paying long term storage fees, but I learned from my mistakes before it ruined me.
And, with that said, I'm selling out the inventory that I've got at Amazon and closing up. It's the competition who can buy in huge quantities at a much lower price that's taken the profit out of it for me.
Good points. Thanks for sharing your insight. I suppose the massive warehouses in the Far-East can outprice most other sellers.
That's where a lot of products are coming from anyway. alibaba does a good job of making them available but the cost differential between ordering 100 pieces of something compared to 1,000 requires a huge capital investment upfront in order to get competitive pricing.
It makes it almost impossible to start small and build something up.
That's the beauty of Steemit.
Your work reading, commenting, curation and posting is the sweat equity that can actually build into something.
Adam Smith, John Stewart Mill, and all of the classical economists of the 19th century defined a "free market" as being free from the rentier class "economic rent" and the landlords, from monopolists, and from banks and credit. The idea was that everyone would earn what they produce and that would be a fair economy.
That clearly is not what we have today, and never really did. Neoclassical economists define a "free market" exactly the opposite, and that is what we have today. The rentier class (oligarchs) own and run governments, oligopolies and monopolies are everywhere and control every major industry in almost every country, and the American economy and society is built on consumerism and credit, offered from the banks, and even some companies to help people to buy their goods and services. This is due to the fact that most don't earn enough in wages to buy the goods and services they want outright. I wrote briefly about this and included an excerpt from "The Wealth and Nations" as well as a video that is more in depth about corporations at this link. Check it out if you're interested. https://steemit.com/economics/@tgheretic/how-corporations-subvert-free-markets
Thank you I am trying to learn more about such things and will definitely check it out!
Great anaylsis, I used to work in an Amazon warehouse, and let me tell you. The scope of thier business is terrifing. They get millions in tax from states for being "job creators" then turn around and invest in droids that will replace all of thier warehouse works with machines. Many people praise Amazon for job creation but A GAINT workforce lay off is coming soon, they have the droid ready to go in an instant.
I'm glad I never worked for them! Was it really as bad an experience as the reports suggest?
It was the Orwellian man, they have the most bizarre work culture I've experienced. Career Amazon workers are often ex-military because the way they put prioritize and competition and self sacrifice is similar to the marines. I worked in the Pick department for 4 months, 12$ and hour, full time through a clandestine "temp agency" basically so they did not have to provide benefits. I only met one other person really because communication was discouraged, it detracted from productivity which they are obsessed with. Overall they offer a non-skilled person a livable wage, but it's pretty tiring and soul sucking. I'll write an article about it this week and post it here in the comments!
Sounds awful. Probably better if you send me the link in the chat - it will be easier to spot - just dm it to me.
No, Amazon is cool, awesome, great @thecryptofiend - they worked hard for their market position and are ongoing developing innovative things, listening to market and clients.
However I might be biased here lol. Great post though, hesr where youbcome from. Monopolies usually are a fact ti avoid.
I never said they weren't great - they are perhaps too good!
I agree with the cautionary note in your article but with the caveat that size and market position is a necessary precondition to becoming an industry leader and developing industry standards. One important aspect of the Amazon experience is the reliability and ease of returning items for refunds. After enduring many hassles with competitors, this aspect of the Amazon shopping experience is a difference-maker for me. Other businesses should learn from Amazon if they truly want to compete.
True but the problem is that once a company gets to Amazon's size they actively crush competition. No company is able to get in a position to compete.
i see your point
It crazy to see how much internet shopping has evolved over time. It is probably the greatest form of shopping nowadays due to the fact of how convenient it is.
What also blows my mind is the progress Amazon has made and what a huge retail tycoon it is nowadays thinking of new intuitive ideas as well as branching into the grocery industry as they start selling food.
I guess Amazon is starting to show their might in other markets which may be good competition wise and trying to get the best proposition to a customer but as you said we don't know if the customer is truly at heart or like any other company they seek for their own benefits first and hope people flock to them like sheep.
However, I guess if you let companies like YouTube (owned by google) have dominance in a certain market they tend to not care and listen to their content creators as there is no threatening competition and they have no reason to tend to complaints as there is no other good alternative and people have to stick with the platform no matter what policies and guidelines. (except for dtube haha)
Not necessarily Amazon have a tendency to dominate whichever markets they enter.
Good read. Only the big names rake profit while the micro businesses die out because of this competitions with giants. Now, Alibaba also turned to blockchain so there will be tough competition with Amazon.
Perhaps. Right now it seems they are content not to compete with each other directly in the same markets.
Yes true but eventually they will cross path, just a matter of time :)
I don't feel like they are too big personally because I feel like people have a lot of other options to get their products oftentimes at a cheaper price. Here in the United States you can get stuff on NewEgg.com that is electronics related oftentimes at a cheaper price because depending on what state you are in you probably won't have to pay tax from NewEgg but you will with Amazon. Also getting stuff off eBay is usually cheaper as well.
True but I don't think it is an exact comparison. Even if they haven't reached the stage about being too big yet, they will given time!
Yeah it is going to continue to get bigger but I remember over 10 years ago people were saying Wal-Mart was getting too big because it ended up being 2% of the US GDP or something but there are still places like Target, Costco, Lowes, Home Depot.....etc.
It is tough in some ways to beat Amazon because they have been able to operate unprofitably for 20+ years. It is tough to beat that but once they continue to ratchet up fees and stuff like that there are opportunities for other companies to operate at a lower cost without all the warehouses.
One thing Target is doing is shipping products directly from their stores to their customers to get it to them faster instead of going out of the huge distribution centers to compete with Amazon.
Interesting so one way to fight it is for companies to play to their own strengths rather than trying to beat them at their own game.
@thecryptofiend This is like any other 'superstore' that becomes such a convenience that users become dependent on it. I may even say addicted to it. Once that happens, then it is a very small transition to the situation where the superstore charges premium on everything, while the users happily think they are getting the best deal. Perhaps they are, but at the cost of very high cuts being taken from the businesses that are selling. That is not necessarily a good thing since it ultimately kills businesses in the end. There are of course, good sides to a super retail business that is easily accessible to sellers even in the remote corners of the world. I am hearing good things about Amazon's initiative for Tshirt design business where artists are actually making good money.
I guess there is a good and a bad side of every coin. Ultimately the 'balance' of good service to customers and businesses will determine the outcome.
I loved to read the transition from very early online businesses (with the geeky looking interface of amazon) to the recent times. When we caught on the internet based online businesses in the locations I am in, the businesses were already evolved and very smooth.
Thanks for sharing. Cheer. Upvoted.
Regards,
Thank you:)
Ill use ebay over amazon because its cheaper, especially if you dont mind waiting for items to be shipped from china
I do not support amazon _ I would rather use Etsy knowing that the person I'm buying from is the one making the product - like the gift for my wife I got recently from this girl making very nice lingerie
https://www.etsy.com/shop/callmebeauty
Etsy is the way to go - this way we support directly makers and creators - and I'm on Etsy as well :
https://www.etsy.com/shop/ExposeBeauty
If I had Amazon shares I would be selling them off in the coming year or so, because the way it looks now, there's going to be blockchain competitors a year or 1-2 away which are going to drain companies like Amazon like people have never seen before.
Whilst I like your enthusiasm, I think it is extremely unlikely.
Most people don't know or care about blockchain and I can't see any reason why they would use it for shopping - there is simply no advantage right now and a lot of disadvantages in terms of returning products, getting scammed, UI etc.
Simply sticking something on a blockchain doesn't make it better.
Until blockchain shopping solutions can offer something superior over Amazon they will not be any kind of competition and that is not happening any time soon.
I think what is going to happen is that there will be marketplaces (for example SAFEX) which will offer direct person-to-person trading with a minimal, or no fees for the people making trades. In essence, it means that companies like Amazon are not going to be needed in the future because there will be a decentralized place for trading.
Customer service and scam-protection still applies, but as we have learned from platforms such as Ebay or Alibaba, merchant reputation is a fairly reliable method to weed out real scammers and promote a certain level of fair trading.
I think pretty soon a company will start selling things on this blockchain market place. And if you have any warranty issues or want a refund, you handle this directly with the company from which you purchased it. It's no different than using their WWW adress to buy it from a company, than it would be to buy it from a blockchain.. the company is still responsable for adhering to the low. If there is a transparant blockchain market place, even more so.
That is not going to allow the volume or convenience that most people require IMO but I don't know for sure. I think it will take time for these services to reach a level where the average consumer will even contemplate using them.
Ohh, yes, obviously. Amazon was around back in the 90's too wasn't it? These things take a few years to really break through.
For the average consumer it should not have to be user unfriendly or difficult at all. I envision usage to be identical to existing market places, with the only exception being that it's cheaper and possibly even rewarding to use it. Just like Steemit.
I think it will happen eventually or at least it should as long as the big players like Amazon don't step in too soon and make their own blockchain platform. With their resources there would be no way for an open blockchain platform to compete - the war would be over before it really started.
That's what people have been saying for forever though. But old tech and companies are slow adapting and adaptations are costly. The same way how Internet 1.0 companies have difficulty competing with Internet 2.0 companies. Blockchain is internet 3.0, and I don't think 2.0 companies even know wtf is going on really in the 3.0 sphere.. They're right where everybody else is: on the verge of accepting bitcoin, maybe ethereum, and totally oblivious of what else is out there.
The difference being that Amazon needs to make money to exist, but a blockchain technology is self supporting. It will outperform older services by cost and rewarding people, and a multimillion company has so many costs they are not going to be able to compete unless they significantly restructure and fire everybody left and right. I see Youtube disappearing too, in a similar fashion, as blockchain alternatives (for example LBRY is a good start) take over.
Will it be tomorrow, this year or next year? Nope. Maybe 3-5 years until it starts and 10 years before it becomes clear there is going to be a new world/internet order.
I love amazon! great post
Thanks!
I'm not sure what is going on with Amazon. I've been a prime member for years and they always had a level of service which was unsurpassed. In the past 6 months, I've noticed they are cutting corners on everything... the way they ship, package, and many more changes in business practices. They spent years building the trust of their customers and they seem to be in the process of negating that trust with recent changes. This does not seem like a good business move, but maybe they think they are too big for it to matter to their bottom line. I never thought I would give up prime, but may not renew this year.
Interesting. That has not been my experience overall. I do find their add-on items annoying though.
many of my problems have come from their new practice of using their own deliver service. They show items delivered which in fact have not been delivered. They are good about replacing, but this is happening quite often when they use their own delivery service and never happens with UPS,USPS. It really becomes a problem when you are sending a gift that you think has been delivered and it has not.
Blockchain technology and its spawns will create a much better marketplace in the future with much lower fees and no centralization
That is the hope.
Amazon is actuall on their best and very innovative . However systematically going towards monopoly concept. On te other hand, if they are very good in what they do plus innovative then why not? the free manrket economy allows them. Good post, thanks for sharing
That is the fundamental philosophical problem of free markets i.e. they are never entirely free - or have not been so far. Large companies like Amazon can bend and shape regulations in a manner that serves incumbents like them and disadvantage smaller companies. They have a direct line to government and they can also carry out various technical schemes that allow them to dodge taxes - something that smaller companies can't do. So the idea that we have truly free markets is an illusion.
I agree, free market creates what we call natural monopolies and Oligopolies . Thanks for your response.
@thecryptofiend. Sir I agree with all your summations here. However, it is very wrong for one to think that private enterprise no matter how big or small will have interest of the public while making their policies. Here profit is the prior interest. Thanks for this piece.
Signed
@eurogee
True.
Your post started to make me feel nostalgic and reminded me of all the pains one used to go thru before ordering. Thanks to these large corps its a breeze now.
Shopping is no longer a headache but fun to do. I have had days of last minute shopping and my order gets delivered right in time. Think about this: a party to attend to next eve and you realise you need new matching shoes. So what order now and expect delivery by noon the next day.
We are really spoilt by the convenience they offer. @thecryptofiend
I feel like Amazon has changed the way shopping is being done , before we would have to go out and buy things ourselves , now from our phones or laptops , we can purchase anything from a pencil to even a laptop or bigger . It gives your variety and it fights it's other competitors . Then they came out with prime , where delivers are made quicker even same day delivery . Then with amazon books , it's a never ending cycle because they do not want to get out of this competition and they want to be on top, when I think of shopping , I think amazon . It is getting too big but it's not ripping people off , you could actually find some things that are cheaper there than in stores. Great analysis you made here @thecryptofiend
Whether they are ripping people off or not isn't really the point. The question is if they have too much power.
I think they do , and it may not be good for the future
Not sure if ABBA will ever dethrone Amazon but the way it is gathering momentum, that day may not seem too far away...
They will butt up against each other eventually.
Excellent Article loved it.
Thanks:)
This morning i've bought the last thing on Amazon! (a jack cable)... by the way you've done a good analysis... How is ugly the first Amazon version??:)
Very ugly but by the first time I used it (which was not long after they launched) it was already much prettier and most importantly easy to use compared to most other websites.
At one time antitrust laws were strongly enforced to protect competition.
Yes but I think those times are far behind us. Even when they are enforced it results in a fine which is so tiny that it makes no difference to these huge corporations.
What I find really interesting about the Amazon story is the fact that they have only a couple profitable quarters in its multiple decade existence. Makes you wonder where all the capital comes from- and if profit isn't the goal of the game, what is?
We have some oligarchs here in my country lie in Telecom business. They command a high rate of fees for their services considering that their infrastructure had already been well-established.
When these corporations grow big, they devour other businesses and then a monster is created capable of doing whatever it would like without control from the authorities that is supposed to regulate them. The end-consumer just have no choice but to pay more.
Fun Thing Sometimes i find cheaper products on amazon than those found in Romanian Stores :))
Not surprising.
The federal government will be suing Amazon. It's coming.
Not sure we will have to see.
Good food for thoughts! But I will not be the one providing an answer...
Convenience is definitely the key word here. As you said, time can be spared and used otherwise. In some sense, I am paying less not to make any effort, to get my shopping delivered at home and to be able to use that time in other means.
Why shouldn't do it? Huge corporations are not that great, but I am earning something in using their service.
Yes very true. I think we are all time starved and time is perhaps the most valuable resource we have.
excelente articulo me gusto mucho y me ayudo a entender un poco los entramado de amazon, buen post
Thank you!
Thanks for the read! Amazon is not my favorite. They have grown too fast to keep up with themselves and leave their staff and clients unfulfilled all too often. I heard they were planning to put blimps or something in the sky above major cities to store their backstock and fly drones up when needed to retrieve the goods. what a disaster that could be! maybe it's a myth. I hope ... Do you know anything about this?
I didn't hear about the blimps but I did hear about the drones. If anyone can make it happen they can.
I agree, Amazon has grown nearly into a monopoly. The only alternative to Amazon would be if other websites would copy the Amazon concept: offering customers a wide variety of products, fast delivery and some kind of guaranty for the customer that they get the things they've ordered in good quality, including customer reviews for the retailers.
It would then be up to both costumers and retailers to accept the alternatives.
I don't think it is possible for a new startup to do that though.
Amazon is so great now that many people around the world know its name. And many use the services of intermediaries for shopping in this trading giant and the subsequent delivery to their country.
Yes, I'm shopping in Amazon. But I believe that everyone should have a choice where to buy and what to buy.
In the future I want to see a number of similar online and offline stores.
There must be a choice, there must be competition!
Thank you dear @thecryptofiend for thinking on this topic!
As long as there is competition there is no problem.
How big is too big?
Who can compete with Amazon?
How about AliExpress? - Cheaper, just as convenient, just as good quality, just as big.
This same argument was made against Microsoft before Google came along. When Google started making an OS everyone said it wold never compete against the might of Microsoft. Now look at it.
Just because you are big and you have market dominance, does not mean you'll keep that dominance. Someone will come along and challenge for it.
And as weird as this is I posted about the demise of retail just 2 days ago.
I also like going in to the shops and having a good browse, but things out this way are so overpriced that a poor kiwi just can't afford to shop locally any more.
Good points and questions but when you are so big that nobody else stands a chance of competing against you then I think you are too big. That becomes all the more pertinent when you are not just trying to dominate one particular type of product but multiple ones.
Not exactly.
Google has a successful mobile OS. It has never challenged Microsoft on desktop - their monopoly there is still intact so I don't think that is a fair comparison.
If anything it illustrates the reverse - nobody can take Microsoft on when it comes to their core business.
But was that Google's intent? Or did they have the vision that the desktop was dying so instead of trying to compete in shrinking market, they targets an emerging market - mobile.
Now Google dominates in so many areas. but other players are now coming out to challenge them.
This is just like my back garden and the ongoing war of the weeds. Every now and then one weed will take over everything and you think nothing will ever compete with it. a few months later and the picture changes, and other weeds start making inroads and soon the dominant weed is struggling for survival.
it's quite fascinating to watch ;-)
I think dominance is not a bad thing when it brings benefit toe producers and customers alike, and the corporation skims a bit off the top.
That's fair enough because it helps everyone.
But when the corporation sees the producers and consumers as resources to be mined solely for corporate profit, then that's bad.
Good point and that is perhaps how monopolies die - they become obsolete.
Yes. I think the sad thing is that this attitude seems to emerge within organisations once they get to a certain size.
Wonderful findings! I've thought about that too. It's really scary to think that a company could take over everything and become the ultimate monopoly. I wonder if any companies will try and get together to take down Amazon. I heard Walmart just bought out Jet. So who knows.
Well I hope we get more competition. It would be bad if we just ended up with one company controlling everything.
I heard that Amazon is interested in buying Netflix future will tell. I love Amazon it is perfect for the X Mas shopping I don't need to go in some over crowed shopping center.
I think if they bought Netflix it would be terrible for competition.
That is one of the reasons they are so successful. What is the long term cost of that though.
Yes it would be very bad for competition but you know they have already so much power they would love it to have no competition to get more power. For the long term I don't know I just like it at the X mas time but if there is no X mas I like to go shopping and not just using Amazon.
That is never good in the long term though.
Yes you are right because small shop owners will lose customers and in the end losing there shop. Okay this year I am back in my home town and I will go out for X mas shopping.
As much as I dislike Jeff Bezos and do believe Amazon has grown too big, I don't have a choice when I want things that are not available in my country. I cannot go to London to buy a book for my son so I'll have to buy from Amazon.
And the biggest problem is governments going after Amazon when it comes to unpaid taxes. That would really hurt.
That is the big problem. Amazon have squeezed out most of the competition so in many cases there is little other choice.
What worries me more is the assumed monopoly power of the site, which is the opposite of "liberalism", that is to say, the freedom to undertake for all, the aim being obvious To be the ONLY and the UNIQUE, this seems rather dangerous, and in the long term contrary to the general interest (distortion of competition) ....
Will we sell our freedom to choose for a few cents of difference ???
Looks like the time of the anti-trust laws passed ....
I think most governments are scared of taking on Amazon.
we need like Amazon in the blockchain technology , it will be huge
Yes but I think that would be a disaster for any competing "open" projects.
My village didn't have a phone till i was round 18 years old. Hence...there was no net either. Online shoping was a tabu till a few years ago and still most don't do it....if you think shipping can be expensive...to get some stuff here is not only pricey but downright crazy. :) So no problems from my side. :) Think i made 7 purchases in totall from Amazon...it was all e-books. Didnt know Amazon was the most used tho...
Give it time. Eventually you will have only Amazon.
I have been thinking a lot about his recently as well. Is Amazon to big? Who is to say if Amazon is too big? Did they not earn what they have become? I guess those are the questions. If they truly earned it who are we the masses to break it up? But at the same time I earn they are in almost every domain in the reality we live in. Its an interesting time, I am torn at the moment. Any bigger though or another branch of daily life and we really do need to take a look behind the curtain.
their customer service helps a ton---whenever there is an issue they do what they can to make me happy.....this always makes me want to comeback more than anything else...on the other hand, ive had moments where I get random monthly charges via Amazon. I have to catch it quick -- then i spend a ton of time on the phone with customer service. I can't tell if they are charging me on purpose or making real mistakes
I suspect they are mistakes. There service is good - I just worry about a future where the only choice we have is Amazon.
yes, so true....how can any retail or online retail truly survive. amazon has UNLIMITED resources to out sell anyone
In fact I'm not much into understanding business, and Amazon is my soul pet, cause it's a great opportunity for me in a country of a third world to get all the wonderful things I want to have. Despite the fact that delivery to my country is expensive and I have to wait about a month or so - it's fantastic.
In all the other cases I use local shops, if what I need can be found there. So in my opinion it's just an international option, but not small business killer anyway.
Perhaps it isn't yet in your country that does not mean it won't be in time.
Very thought provoking post. Thanks for sharing.
You're welcome.