Amazon Invades

Previously in this space we have discussed the ethical issues associated with Amazon, and specifically in the harm they can do to local businesses and the stakeholders associated with those companies. No reasonable person is going to argue that a successful business model should be suppressed just because it gives its inventor a competitive advantage – that’s the whole point of having a business strategy in the first place – but any business that destroys other employers, bankrupts potential customers, and eventually eradicates entire population centers in which it has no operations of its own is not a sound business model. Even if there are no government sanctions or consumer boycotts taken against such a company, eventually it will eliminate enough potential customers to destroy itself, and who’s even mentioned monopoly effects yet?

Several factors have helped to prevent Amazon from reaching that critical mass, the most important one being the tendency of people to wait until the last moment to purchase things. Even with overnight shipping it is still faster to go to a real-world retail outlet to make a purchase, and you also avoid the issues of breakage during shipping and the shipping costs themselves. But what would happen if Amazon expanded its network of distribution centers, purchased its own fleet of trucks, and started offering delivery straight to your door on the same day – and at rates comparable to what you would spend at a brick-and-mortar retailer for the same product?

A number of online news sources have been reporting recently on Amazon’s plans to open new distribution centers and/or expand existing facilities in Texas, California, Virginia, and New Jersey, and increase the number of delivery vehicles available in each of these locations. With the right logistic arrangements and a modern mechanized warehouse system those four locations alone would given them the ability to deliver to anywhere in the Philadelphia – New York Corridor, anywhere from Baltimore through the Carolinas, any of the major Texas population centers, and anywhere from San Francisco to San Diego in the same business day. The only remaining questions would appear to be whether Amazon can operate such a system efficiently enough to remain competitive with existing real-world retailers, and whether we feel that this type of operation is any more ethical than their existing business model…

Employing their own distribution center workers, truck drivers, maintenance people (mechanized warehouses and fleets of trucks both require lots of maintenance) and support units will require Amazon to employ hundreds (or thousands; depends on who you ask) of local people, and purchasing electricity, diesel fuel, food and drink, and anything else they have to get locally will make Amazon part of your local economy, and those profit centers will contribute to the local tax base. Having an Amazon delivery center in your community shouldn’t be any different from having a Wal-Mart distribution center or any other kind of major warehouse operation there, and at least some of the benefit will remain there instead of going off to some corporate headquarters many hours away. But, as is the case with Wal-Mart, Target, or any other large retailer, we still have the issue of how this will affect local businesses…

Having your employer go under because Amazon built a real-world delivery center nearby isn’t functionally different from having it succumb to Wal-Mart or CostCo, or simply implode under the rotten economy; either way you’re still unemployed, angry, and unable to purchase anything even if you wanted to. Having local distribution centers will not change the fact that Amazon is still wiping out small businesses; if anything, being faster and more convenient will only make Amazon’s inherent menace that much more dangerous. All of which leads me to believe that we will be revisiting this issue again soon if Amazon goes through with these plans…

Whether we want to or not…