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- The Forecaster
All you need to know about Amazon.com, which started charging sales tax for Maine customers April 1, is that the Goliath online retailer derives its name from – and, more importantly, aims to emulate – the biggest river system in the world.
The Amazon River in South America has 1,100 tributaries carrying a sixth of the world’s fresh water. Similarly, the Internet-based retailer dominates online shopping. According to CNBC, Amazon captured 43 percent of all online sales revenue in 2016. Its share price was a whopping $886.54 on March 31. It wasn’t always this way.
Many remember Amazon in the late 1990s as a struggling dotcom startup. Founder Jeff Bezos was losing money every year as he essentially forged the field of e-commerce. He kept upbeat, though, urging patience from investors as the business tried to break even – which Amazon finally achieved in 2001, when it earned its first quarterly profit. Yearly profit had to wait until 2003.
And, of course, Amazon is now the revenue-generating behemoth Bezos always imagined, realizing $135.99 billion in 2016. That’s up from $107.1 billion in 2015 and $6.92 billion in 2004.
There are definite winners and losers when it comes to Amazon’s rise.
Investors, especially ones who have hung in for the long haul, are realizing huge gains. Bezos, as reported last week, is now the second-richest man in the world, just behind Microsoft founder Bill Gates. And a lot of people seem happy with Amazon’s products and delivery service.
But the rise of Amazon has hurt many traditional retailers, too.
The announcement last week by Sears Holdings Corp. that its Sears and Kmart stores are struggling, in no small part due to the rise of e-commerce options, is yet another sign that online shopping is hurting brick-and-mortar operations. This week, I heard Amazon is ramping up its grocery business. Watch out, Hannaford Bros. and Shaw’s supermarket shoppers and employees.
Inside Amazon, reports say, its 341,000 employees are struggling with poor working conditions. The New York Times ran a story in 2015 that described the plight of both the underpaid Amazon warehouse workers, who are treated like chattel, as well as corporate employees, who are expected to work insane hours.
The Times piece is hardly singular. Business Insider described working conditions at Amazon as “brutal” in 2013. The Huffington Post ran a story in 2015 with the headline: “The Life and Death of an Amazon Warehouse Temp; What the Future of Low-Wage Work Really Looks Like.” The Guardian newspaper in England described “intolerable conditions” at an Amazon warehouse in Scotland in 2016.
Despite the convenience and cost-savings for consumers, it’s time Amazon customers say enough’s enough and cease our relationship with the company that abuses its employees and is ruining local retail culture.
Traditional retail employs millions of people around the country. But the Internet, led by Amazon, is threatening to upend that most basic of economic drivers. Would you want to live in an America with no physical stores? No place to feel the quality of an item before purchasing it? No trying on a pair of pants before you buy? We need to do everything we can to keep local businesses in operation, not only because they provide jobs for local people but because they provide for a better shopping experience. Plus, who really wants to live in a town with a Main Street filled with empty storefronts.
I’ve been shopping at Sears and K-Mart my whole life. It’s sad to hear the parent company is struggling and may close stores. I used to boycott Wal-Mart because I thought they were putting the little guys out of business (which they were), but even I am coming around on big boxes, since at least they have physical locations that employ millions of Americans. That’s more than you can say for Amazon. If you must buy online, buy from a retailer with physical locations, not from any web-only operation.
Amazon, however, isn’t useless. Consumers can practice something I call reverse showrooming by using Amazon’s handy comments section – which polls previous buyers – and then buying locally. I did this recently with a camera purchase. After I had gathered information online about different models, I went to a store in Portland to buy it. It felt good, too, knowing I was spending my money locally rather than shipping it to Amazon’s headquarters in Seattle.
The allure of e-tailers is hard to resist, but Amazon is no friend to our local communities. And that matters more than saving a few dollars or being able to shop in our slippers.
John Balentine, a former managing editor for Sun Media Group, lives in Windham.