The Amazon Paradox
Amazon is the primary partner that offers small businesses a legitimate way to compete with the big retailers. It is changing retail by offering more products from more merchants, at greater convenience – and people are voting with their wallets. The platform claims to have leveled the playing field so that independent brands and small businesses can enter the market and thrive. We’ll give you that. But we’ll also be offering a perspective that dismantles the common notion of Amazon democratizing retail and in fact gobbling start-ups instead.
How Amazon is Doing Us Dirty
An in-depth report by the New York Times on Amazon exposed a culture of borderline harassment from line managers, stupidly long hours, vicious evaluation sessions, a high staff turnover rate and a cult-like atmosphere. From questionable business practices and work ethics, quite a lot of things have gone south for the world’s most valuable brand- “The Everything Store” sounds like a pretty brutal place to work.
Besides, as there’s no government oversight, Amazon has a monopolistic control- they’re now capable of dominating markets, fixing prices and killing competition.
Moreover, it is ready to bleed money to gain market share and destroy small businesses. This is a pricing strategy called Predatory Pricing, which uses the method of undercutting on a larger scale, where a dominant firm in an industry will deliberately reduce its prices of a product or service to loss-making levels in the short-term. So they delay their gratification (profits) by giving us instant gratification, how sweet.
But how would one forget the notorious copying of successful business ideas? Amazon scooped up data from its own sellers to launch competing products and now appears to be selling products very similar to some of the website’s best-selling items. Bloomberg reports that, since Amazon can also track what consumers want, it can simply make and sell the products rather than going through a third-party merchant. This has also been creating a big antitrust problem, because privacy issues who?
It has stooped as low as being able to successfully manipulate the use of Consumer Welfare Standards by keeping prices low and providing great services. This will eventually lead to small businesses being shut down- many Amazon Basics companies, which were indies before, had to sell themselves to Amazon due to losses. Ironically, the traffic it generates leaves small businesses with no alternative but to use the same platform that can potentially gobble them up. It is thereby only reduced to a matter of chance and hence a paradox. With the current predatory business model it has, Amazon has made itself the Pacman of small businesses.
Now that we’ve listed the issues, how do we fix them?
Nay Nay, You Say to the Non-Ethical Way
Supporting small and local businesses are definitely the way to go. They are important to the economic and social fabric of our society, and we all play a part in their survival. When you shop local, your pennies stay in the community and help local development. And while it is easy to purchase through digital shops on sites, shopping through third-party apps typically reduces the net profit for the merchant. So, before you reflexively hit “place order” with an e-commerce behemoth, find out whether a local retailer offers the same item.
Remember that loyalty counts, and these businesses rely on regular customers, even as they try to attract new ones. Buying and supporting local brands on digital platforms like Shopify and Instagram is a simpler and much more convenient option.
As bounty points, you'll find unique, handmade, or sustainable alternatives at small businesses. Topping this with the fact that they put their put customer experience first- the intimacy and personalized care, chef's kiss. You could discover some great products and services while helping to build a strong and successful community around you. After all, growth is a collective effort.
~Deveshi Roy from Wobh