As Jeff Bezos’ empire approaches unimaginable levels of success, should we love or fear Amazon?
The company has succeeded in touching so many facets of American consumer life, and it has democratized extreme convenience like no other company ever before. Amazon revolutionized the modern retail landscape in the process, and now it’s positioning itself for even bigger aspirations.
But as the growing conglomerate continues to spread it wings, starting businesses in sectors that no one ever reckoned would be undertaken by the online retail giant, people are beginning to view Amazon with fear.
As Amazon begins to disrupt dissimilar businesses such as movie making, shipping companies and grocery stores, the m word — monopoly — is now being thrown around.
One of the most famous people to label Amazon a monopoly is none other than our president, Donald Trump.
Unparalleled reach, incredible convenience
For many of us, Amazon is a staple in our consumer lives. In fact, it’s important for me, as the author of this article, to disclose that I am an avid consumer of many Amazon products. Because of the breadth and sheer convenience of their services, I rarely set foot in a physical retail store.
From my groceries to my toiletries to other must-have things such as clothing, audiobooks and even video series, Amazon is increasingly gobbling up my disposable income. As a consumer, I couldn’t be more pleased with their offerings.
Like me, there are millions of people across the country and the world who have shifted their spending toward Amazon. This is why Amazon is now the undisputed king of online shopping, as the company captures nearly one half of all online spending in the United States. Additionally, a whopping 50 percent of all U.S. households are Amazon Prime members.
To the victor go the spoils
Lately, the online behemoth has become wildly profitable. For years, Amazon actually didn’t turn a profit and reinvested its revenue in growing its market share. Recently, its extremely long-term strategy has finally started to pay off.
Bezos, Amazon’s founder, is now the second-richest person in the world, and Amazon is the fourth-most valuable company behind Apple, Alphabet (Parent company of Google) and Microsoft. Amazon Cloud Services is also a dominant force in cloud computing, having pretty much cornered the market.
Consider that Amazon stock is now worth 600 times more than it was 20 years ago, when the company debuted its Initial Public Offering (IPO).
Due to his sweeping success, Bezos has become an 800-pound gorilla in the business world, and his reach continues to expand unabated. For instance, he now owns one of the most influential newspapers in the United States, The Washington Post.
Few doubt that Bezos will continue to aggressively expand his business empire.
Is Amazon a monopoly?
The short answer is Amazon is not a monopoly, although people such as Trump would like to see their ambitions curtailed through regulatory disruption.
Amazon is not a monopoly because the government is typically concerned about protecting customers, and insulating them from “unfair price hikes.”
Amazon actively works to lower prices for its customers, so antitrust laws are likely not relevant in Amazon’s case, even if the company is obliterating competition in certain sectors.
For now, Amazon cannot be classified as a monopoly, but that doesn’t mean that the company is escaping some heavy criticism.
The less-flattering angles
Amazon, like any major company, hasn’t been immune from scandal.
Amazon has faced some hot water over the way its deals with suppliers, especially in the publishing industry. They have also encountered scandal over treatment of their employees at their corporate headquarters, which The New York Times called a “bruising workplace.” We also know from some ex-employee tell-alls that working conditions in their warehouses have been challenging at times.
Critics say Amazon uses its power to relentlessly drive down prices for consumers, and that it cares little about its suppliers and employees.
Others claim that the company, much like its founder, is fiercely competitive and takes no excuses — and that culture has propelled Amazon’s surreal success.
Takeaway: Love it or fear it, Amazon is amazing
There are few words that can sum up the amazing benefits of being an Amazon customer. We live in the age of hyper-convenience and incredible discounting, and there’s little doubt that Amazon has helped galvanize a business culture that puts consumers first.
In the long run, Amazon will make some people nervous as its tentacles touch and disrupt entire industries. But in the end, as long as Amazon continues to deliver stellar prices to consumers and doesn’t abuse its market power, the company will be able to write the next chapter of its incredible success story.
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