The Ethics of Amazon

Unless you’ve been living in a cave for the past decade, you’re probably already aware of the Internet’s best known retailer, Amazon.com. In fact, if you’re reading a web log in the first place, you’ve probably also done business with Amazon; you might even use it as the starting point for Internet searches for specific needs (what do you get someone for their 8th Anniversary?) or specific kinds of merchandise (what unusual gifts can you find that are made out of bronze – the traditional 8th anniversary present?). What you may not have realized that you’re also helping to determine which e-commerce sites live or die in the process…

Comparisons between Amazon and large brick-and-mortar mega-retailers like Wal-Mart and Meijer began almost as soon as the Internet site went online, and they do hold some weight; Amazon does prevent a lot of potential customers from seeking out smaller retailers because of their relative convenience. Even worse, however, is what is called the legitimacy issue in the Management literature. Internet retailing (and most other forms of e-commerce, in fact) as still in their early stages, and when you do business with some site you’ve never heard of before, you’re never really sure if you will get what the website described, or if the merchandise that will arrive will be defective, inferior, or just stolen during the delivery process. Whereas Amazon, with millions of transactions every year and a hard-won reputation to defend, is not likely to pull any shenanigans with your order…

Now, most people had had at least one problem with Amazon over the years; it’s a very large operation and there are a huge number of things that can go wrong with their system. It’s very much the same situation you would encounter with a mega-retailer like Wal-Mart in the real world: they’re easy to find, and you can be relatively sure that the store will still be there next week if you have a problem with your purchase – but there’s no guarantee that you WON’T have such a problem. Whereas with a small retailer or a small web site, you might get personalized service and a specialized product selection that actually addresses your needs, but you’ll have trouble finding the site/store in the first place, and there’s no way to be sure that they’ll still be around when/if you have a problem…

We’ve all seen small retailers (and sometimes coalitions of retailers, or even some towns) claiming that Wal-Mart destroys local retailers with their low (volume-buying) prices and convenience, but this fails to consider that a Wal-Mart location is also a much larger investment on the part of the company, and if they don’t get literally thousands of details exactly right, that particular store will end up costing the corporation money. Too many failures of that type, and even mighty Wal-Mart will go under…

My point here is that Amazon represents the same set of business issues online that Wal-Mart does in the real world. This afternoon, for example, I was trying to purchase a specialty item on a small website, but they were having some kind of problem with their merchant software, and I couldn’t get their server to complete the sale. So I sent them an unkind email message and logged onto Amazon, where I found the same gift item in about thirty seconds, and purchased it in another thirty. You could argue that this was the smaller site’s own fault, but the fact remains that if there was no Amazon, I might have waited until Monday morning, called the company’s toll-free number, and completed my purchase. Instead they lost the sale – and probably any other sales they would have made this weekend…

So here’s the question: does Amazon – or any other large and powerful retailer – have any ethical responsibility to their competition to maintain a level playing field? Or is this superseded by their responsibility to their own customers (to provide the desired merchandise at the best price)? For that matter, do we as consumers have any responsibility to attempt to do business with small retailers who are making it both harder and more expensive for us to do business with them, or should we just protect our own interests and go where the goods we want are cheaper and more convenient?

It’s worth thinking about…