Grass is green, the sky is blue, and Amazon just keeps getting richer.
Richer By the Minute: Amazon
For whosoever the last two years has been something of a disappointment, there is the equal and opposite reaction of Amazon.
While small and mid-sized businesses nationwide suffered through periodic shut-downs, strangling mandates and a resplendent variety of local restrictions, Amazon was already perfectly poised to take full advantage of the sudden shift in consumer buying trends from in-person shopping to a fully online experience.
There were still problems, of course; there still are. Amazon, like other online retailers, is suffering from a running crisis of returns and returned merchandise that is reduced in value by over-handling, being out-of-date or lacking original tags and packaging.
But even that headache is but a penny dropped in the vast bucket of Amazon’s billions. Over the past two years, the worlds 10 richest men doubled their wealth, Jeff Bezos very much included.
It isn’t Amazon’s fault- not exactly. The company can’t be held responsible for a global pandemic, though certain questions are worth asking. For instance, Jeff Bezos owns The Washington Post. The Post has been heavily advocating for extended shut-downs throughout Covid19, and continues to reserve the right to do so, while its owner stands to profit from that scenario.
Is that a problematic conflict of interest?
Amazon is responsible for other questionable business practices as well, including burying the products of its vendors deep under a search-result mountain of Amazon’s own products, exploitative labor practices at home and abroad, aggressive government lobbying to promote the interests of the company at the expense of the collective interests of society, and fighting legislation aimed at curbing forced labor worldwide.
Even those things aren’t entirely the fault of Amazon. A false bill of goods was sold to American voters under the warm and fuzzy-sounding guise of “Globalism”. Economic globalization- which is what the world actually got- does not look at all like people “sharing all the world” or “living life in peace.”
It looks like exploitation.
It looks like wealthy corporations taking advantage of countries with lower labor standards and fewer environmental regulations to get richer on the backs of workers in emerging nations. Worse, it has changed the market and what it takes to stay competitive.
That, plus a 10,000 mile supply line dependent on petroleum, a wider wealth gap, and the gutting of American manufacturing was all society got for its 35-year odd experiment in globalization.
Globalization killed malls, though some have yet to lie down. Before that, globalization helped the malls kill Main Street. The price, the selection, the savings; small-scale operations had a hard time competing.
They had a hard time, that is, until Walmart came along and killed them all. Walmart, with its unsurpassed buying power, low prices and endless selection of goods cheaply made in other countries, seemed well-nigh unstoppable.
What retailer could ever compete?
It was the Mary Kate & Ashley Olsen Rule of Business: Proliferate.
Forget exclusivity. Forget selling your product on Rodeo Drive. Wal-Mart is where the real money is. Only a scant percentage of the 330 million people currently inhabiting the U.S.A. can afford to shop in Beverly Hills. Everyone can afford to shop at Wal-Mart.
Plenty of celebrities start clothing lines, cosmetic companies, lifestyle magazines. Only a scant handful of those ever make any serious money. Mary Kate and Ashley Olsen, on the other hand, are billionaires, not millionaires because they launched a major brand at Wal-Mart. Other artists-turned-business-moguls like Jay-Z have followed the same model by founding brand-name labels available at a very scalable price-point.
Given this principle, how could any retailer ever dream of undercutting a giant like Wal-Mart?
Amazon’s journey from humble online bookseller to super massive retail black hole was a meteoric one, but when the history of that astounding company is written, 2020-? is likely to be universally acknowledged as the period in which Amazon really hit its stride.
After being perfectly positioned to take advantage of buying trends during the worst of Covid19, Amazon is again perfectly positioned take advantage of the economic upheavals post-Covid.
The deadly combination of skyrocketing inflation, astronomical gas prices and the sharply rising cost of food, shelter and basic goods is killing consumer sentiment, not to mention busting the family budget.
In these trying times, post those other trying times, Amazon is again poised to deliver. Shopping for groceries, there seems little chance small, organic independent farms and producers will survive the current economic gauntlet, to say nothing of the coming one. They are having to raise prices too rapidly to combat a sharp increase in the cost of doing business.
Meanwhile, the Amazon brand is looking better and better. Once, Amazon’s organic store brand might have been $1 or $2 cheaper than the other brands offered by Amazon. Now, the Amazon brand is under-cutting its competitors by $3, $4, even $5.
The small-scale wholesalers being undercut aren’t household names; this isn’t a question of consumers being willing to pay a premium for a trusted name or fancy advertising campaign. Most of these brands barely advertise.
This is a cost-of-production increase that is going to kill off the last of the small, independent operations. Amazon will soon be gobbling them up, no doubt, doing what other major corporations do to boutique brands like Ben & Jerry’s (bought by Unilever in 2000) and Burt’s Bees (Clorox, 2007).
But nothing lasts forever, not even Amazon.
What’s new and what’s next will someday do to Amazon what Amazon has done to every other retailer in America.
Meanwhile, the global economy is still groaning under the weight of Covid19-related complications and Amazon just keeps getting richer.
(contributing writer, Brooke Bell)