2018/10/03: sellers gain exposure to an enormous audience and higher sales. But they lose some of their ability to maintain their profit margins, putting downward pressure on wages and driving less-efficient companies out of business entirely.
In terms of the economics, which is concerned more with aggregate welfare than equity or fairness to certain individuals, that's not necessarily a bad thing. But it causes pain for those on the the losing end — especially brick-and-mortar businesses that can't compete with Amazon's fast online deliveries, hard-to-beat prices and near-infinite variety. And having created a portal through which so much commerce must flow, Amazon enriches itself by charging a toll along the way.
That's the Amazon Effect.
In a way, Amazon is doing the same thing in its search for a location for its new headquarters. It's treating prospective host cities as if they were sellers on Amazon, drawing them into a bidding war. Those cities are offering up tax breaks and subsidies, even if doing so jeopardizes their future tax revenue and drives up the price of housing for everyone else.
Amazon, and e-commerce more generally, is also disrupting the labor market. Brick and mortar retail jobs are quickly falling behind employment growth for the rest of the economy. It's not yet clear whether all the warehouse pickers and delivery drivers Amazon is hiring to support its ever growing shipping commitments will totally close that gap — especially as Amazon perfects fulfillment center robots and delivery drones in order to reduce its personnel needs in the future.
Although Amazon this week announced a new $15 minimum wage for all its employees, some research suggests that consolidating jobs under fewer large employers tends to reduce wages, not raise them.
2018/09/13: Grocery data startup Basket is among the companies trying to help traditional brick-and-mortar grocery stores succeed against alternative players such as Amazon and Walmart.
The death of local grocery retail is greatly exaggerated.
For the past four years, Basket built up a database of grocery store product pricing by tasking shoppers with capturing that information.
For the past couple months, the company has been working with a dozen brands, to give them access to real-time and historical data for future planning purposes.
Grocery suppliers are feeling the squeeze - big-time.
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The Sustainable Food Trust, founded by Patrick Holden, is a global voice for sustainable food systems, aiming to empower communities with sustainable ideas, and push for government policy changes.
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