Private: Intelligence

I think we sometimes tend to overlook just how important Amazon is to the web.  In all the buzz and hullabaloo of IPO’s and venture capital funding, we take for granted that Amazon is basically the Wal-Mart of the web.  That being said, there are some issues that should be raised and paid attention to.

It wasn’t so long ago that Amazon was just a simple little bookstore on the web.  They were in a pitched battle with Borders and Barnes & Noble for online literary supremacy, and now they’re far more than a simple little bookstore and those “brick and mortar” stores are either dead or dying. 

Amazon expanded its business to include music, movies, toys, and eventually just about everything else under the sun.  They developed and patented their “One-Click” shopping process, and transformed the world of considered purchases into impulse buying, thereby lowering the barrier for decision-making adults on whether or not to buy a product.  Their recommendation engine has blazed the trail for every data-targeting company that exists, and the pedigree of the people who have worked at Amazon can be seen throughout the world of e-Commerce as those people represent the cream of the crop for the online consumer business.

As a consumer, I start my shopping experience with Amazon, and when it comes to making a purchase decision most consumers are willing to pay 5-10% more and buy it from Amazon than to buy it from an online retailer they’ve never heard of.  The brand “Amazon” is synonymous with customer service, fast delivery, quality products, and (for many people) free shipping.  Amazon flooded the market with banners and buttons back in the day proclaiming free shipping to get trial, and it worked.   That and the industry best practice case study of the Amazon Affiliate Program, which every e-tailer has tried to emulate since it began.

Of course, Amazon also deserves to get some of the blame for what’s happening to local business, in much the same way as Wal-Mart does.  When Wal-Mart comes into a market, its routine that smaller retailers go up in arms because they can’t compete with the price and selection that Wal-Mart offers.  Amazon has the same gripe against it, plus they don’t pay state sales tax.  That third leg of the proverbial stool is having a profound effect on local business, and as a result I’ve started to see local marketing from groups of store-owners and chamber of commerce groups practically pleading with consumers to “shop local” and support your local business’ so that tax money can be fed back into the local community. 

I agree with this movement, and I think people should pay attention.  It doesn’t mean you have to stop shopping with Amazon, or Wal-Mart for that matter.  It just means that every few purchases you make, try to buy something local.  Support your local bookstore, or record store, or grocery store, or boutique clothing store.  Support your local pet store, or your local toy store.  The prices are certain to be higher than what you’re paying at Amazon, but they won’t be astronomical and these stores need your business.  They need you to come in and peruse and buy, rather than come in, peruse, and then go to Amazon to get it for less. 

I’m all for finding deals, but once in awhile you have to support your local business, at least until Amazon and the government determine a way to work out the sales tax situation.

Don’t you agree?