May 1, 2021
Quarterly earnings reports from the big five tech conglomerates, Apple, Microsoft, Facebook Google, and Amazon were way over one-trillion-dollars and up 25% over the same quarter last year, regardless – or perhaps – because of the pandemic. One paper noted that in one month these five horsemen earn more than McDonalds, which is no slouch, does in a year. Perhaps the biggest and baddest of this lot is Amazon, which we can’t seem to stop talking about these days because it is literally everywhere.
Certainly, that was the focus of my conversation with Jason Boyce, the author of The Amazon Jungle: The Truth About Amazon, on Wade’s World. Listening to Boyce, you could be forgiven for thinking this was another disgruntled union organizer friend of mine or some whining politician who had failed to get a political contribution. You would be wrong though, despite your lying ears. Boyce is an insider of sorts who spent a career as a third-party seller, largely on Amazon, and is still a consultant to small businesses and others trying to figure out how to navigate the platform and survive in that jungle.
Boyce concedes that the company is ruthless in all of its business lines, but argues that few companies have ever had a virtual monopoly in three or more areas: e-commerce, cloud computing, and book selling. He argues that as big as Amazon is, none of us are really reckoning with the full scope of their e-commerce platform and the amount of money it is handling. Sellers give Amazon 15% of their sales, but the other 85% is also going through the company. Their earnings only reflect their commission in e-commerce, not the full extent of their impact on the economy. He makes a good point!
He notes that it’s just basic capitalism for companies to steal ideas from each other, and grocery stores routinely make private labels of best sellers on their shelves. In Amazon’s case they don’t even share that data with the sellers on their platform. Given their control of the platform, the biggest difference is that when they knockoff your product, they can easily put you out of business and move you off the back page. It’s hard to ignore Boyce’s point when he notes the fact that the vast majority of e-consumers start their search for a product on Amazon. Period. Full stop.
We both came to easy agreement that the expansion of employment and construction of warehouse and fulfillment centers around the country is also giving Amazon something else besides more billions for Jeff Bezos, and that’s political power in more and more Congressional districts around the country. Couple that with their increase political expenditures to protect these monopolies in Washington, and this is trouble for business and democracy.
Listening to Boyce, it’s impossible not to believe that we need to curb this company, but it is also impossible not to believe that it may be too late.