Amazon.com. They are one of the many online shopping “malls” and most certainly the biggest. On Amazon, you can find just about anything you want. Food, movies, music, car parts, motorcycle parts, gun parts, books, phones, stereos, computers, desks, chairs, instruments…like I said, just about anything.
Amazon will present you the item you’re looking for, plus similar items, plus items that other people who looked at your item bought, plus items that may be of interest to you based on the item you’re looking at. It will give you tons of shipping options and, I’m told, will even whisper sweet-nothings in your ear if you ask it nicely.
What it won’t do is help the average store owner survive in this world – quite the opposite, in fact – it will bury them.
Years ago, when the dot-com boom happened, tons of companies created web presences. Anyone who was anyone or had a product to sell built a website and started peddling their wares to the whole world. A vast number of electronic malls popped up, seemingly overnight and those sites started selling everyone’s wares to the whole world.
When the dot-com bust happened, most of those companies went out of business. Silicon Valley flipped over on its back and started doing the cockroach dance while the tech world defecated in its collective silk boxers. Thousands upon thousands of jobs were lost as quickly as they had been created as dot-com after dot-com locked the doors and shuttered the windows.
Amazon – formed in 1995 – was one of the companies which, against all odds, survived the collapse and continued to flourish while bankruptcy courts danced to clear their schedules for hearing after hearing after disheartening hearing.
Amazon was able to do this because of their business model. Granted, that model has adapted and mutated over the years as the company has grown and swallowed other companies but the basic idea is the same “Get people what they want, on the cheap”. Amazon did (and still does) this amazingly well. So what’s the problem?
The problem is that they do it TOO well. Amazon makes it too easy to find what you want and get it to your house, without paying top dollar. I know what you’re thinking…You’re thinking “so what’s the problem, Rob?”. I’ll tell you: Amazon makes it SO easy that brick and mortar buildings are having trouble competing. Lots of trouble competing. So much trouble that they are going broke and shutting down at a record pace.
Here’s how it works.
Bob opens up a store which sells…plates. Dinner plates. All shapes and sizes and colors of dinner plates. Bob does really well, for years because, as we all know, chicks need new dishes about ever 14 weeks. Bob buys a new house in the suburbs, a Subaru wagon, a new swing set for the kids and a new living room set for his wife. Bob goes on about his business and lives comfortably. One day, Bob notices that his business is in a decline. He’s not seeing as many customers as he did the last year and the last year wasn’t as good as the year before that. Bob tries and tries to stimulate his business by having sales and increasing his selection and advertising and begging his friends to come by for a visit but, try as he might, Bob ends up going out of business. He loses the Subaru, the house gets foreclosed on, the swing set rusts away in the back yard and his wife leaves him for the I.T. guy she’s been banging for the last 6 months while Bob’s been crippling himself, trying to save his business.
Bob now lives under a shopping cart on 27th and McDowell, drinking Thunderbird and begging for change.
Why did this happen? Well, it’s a simple equation; Bob could compete with a couple other dinnerware shops in town but he couldn’t compete with all of the dinnerware shops in all of the world, many of which only operate in virtual space and have almost no workforce to speak of. Since places like that have virtually no labor expense, and since Amazon does all of their merchandising and billing for them, they don’t have to maintain a storefront to sell from and they can sell their wares dirt cheap. All of the people in Bob’s hometown can now find any dinner plate they want in any color, any material, any size, any shape, any number of pieces and they don’t have to drive across town in traffic to get them. All they have to do is click and search and they’re in hog heaven.
Over the years, this exact thing has happened to untold numbers of small businesses. 1? 10? 100? I’d be willing to bet it’s thousands of businesses which have been closed down due to an inability to compete with Amazon’s business model.
Next you have to think about what happens to companies who do business with Amazon and then, somehow, piss them off. What if Bob was selling his plates on Amazon and didn’t have the brick and mortar and sales force and displays and merchandising. He’s rocking out like a fat cat, selling his wares to the world on Amazon but one day he does something to anger them and they pull his contract. Now he has nothing but a warehouse full of plates and no way to move them.
Back to drinking Thunderbird and begging for crack money. Poor Bob…That guy just can’t catch a break, can he?
Now before you start thinking – this isn’t an anti-Amazon rant. I actually use Amazon. I even have an Amazon Prime account. I only use it, though, for things I can’t find locally. I’d rather drive 10 or 15 miles on the bike and support a local business than sit in my house and put Bob out on the street by clicking my way into shopper’s paradise. It’s better that way. Don’t you think?
One of my favorite David and Goliath parables as a kid was actually an episode of Garfield & Friends called “Supermarket Mania”. In it, Jon Arbuckle and his pets are convinced to ditch the puny and unstocked Gramps’ Market by the charismatic and weasel-y owner of the Food Monster who promises Triple Coupons! and Cash Giveaways! The episode paints the ‘hypermarket’ as this terrible blight to society. When a customer is short a dollar on their groceries, Gramps tells the customer that she can pay the remainder the next time she’s in. He’s a humble guy with the best produce and y’know, he’s the small dude! Meanwhile, the Food Monster is this gargantuan place three miles long with prices that go up dramatically as soon as the owner gets on the horn and announces a special. In the end, Garfield and Odie expose the owner’s awful business practices and all the customers end up funneling into Gramps’ store.
Ladies and gentlemen, Garfield & Friends is dead wrong.
Small, local grocery store, fifty years later.
I’ve been to those three-aisle grocery stores, the ones owned by local businesses for small populations and I’d rather have a Walmart. Vast aisles of product with tons of variety, many provided by local business in fact, and prices made cheaper by volume purchasing. When it comes to commodities, I’m not going to go out of my way to pay more to support a local business. Capitalism is natural selection: you need to adapt and survive better than your competition or you’ll drown. Give me a reason to come to your store. I don’t need to support your nice house and five employees, I need to not spend outrageous amount on my groceries. Sam Walton did it, why can’t you?
Now you may wonder what the hell I’m rambling about grocery stores when this article is about how Amazon is Satan, but I’m telling you right now that the stories are similar affairs. Kelly and I picked up Dead Island from a local entertainment store because all the other big chains had under ordered. I tell you what, though: as soon as games go download day and date with retail releases, I’m ditching retail stores altogether for my gaming software needs. Business is business and I don’t owe you anything simply because you’re local.
Local restaurants? I get it. Local dentists? I get it. Local auto shops? I get it. But when it comes to commodities – things I can get anywhere – I don’t need your humble origin story and go out of my way an extra fifteen to twenty minutes to buy junk at your place. I love Amazon and I will continue to download Kindle books instead of visiting book stores, I’ll continue to save $15-$20 pre-ordering video games, getting them the same day I would through a local Gamestop. I’ll buy that processor fan online, too. Amazon didn’t get to where they were sheisty, they got there by being innovative and simply being the better business proposition.