People tend to forget the fact that Amazon and Walmart are actually businesses. The other, lesser known fact is that brick and mortar business start-ups have never been more successful.
Brick and mortar retail stores are flourishing with less competition from larger companies like Amazon or Walmart.
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If small business owners can capitalize on this shift, they will be able to provide better products at cheaper rates with far less overhead costs.
Facts about the market giants-
1. Amazon actually makes less money on each item shipped.
Amazon’s overall value is massive, but their profit margins are often lower than many would think.
Try to find the cheapest possible item on Amazon and you will find that their profit margin is quite low.
This means they have to sell more products to make the same amount of money as a competitor with higher prices.
2. Amazon’s business model is not sustainable without predatory pricing
Predatory pricing is illegal under federal law unless the business suffers from some sort of monopoly status, which Amazon does not have despite being one of the most powerful companies in America.
3. Amazon has faced antitrust issues
Amazon was recently sued by book publishers because the company wanted to make deals with other retailers like Barnes and Noble.
Amazon had also been sued by Swiss watch companies earlier in 2017 for allegedly using its data against them.
4. Amazon’s warehouses are not good for the environment
The warehouses that Amazon uses to pack and ship packages can produce more than 1,000 pounds of waste per year.
Amazon regularly ships millions of orders because they are one of the most popular companies in the world, which means even more waste.
5. Amazon has a low rating on Glassdoor
Amazon’s rating on Glassdoor is 3.2, which is lower than both Walmart and Target. Amazon is the lowest rated stock on the market.
6. Amazon has a reputation for questionable business practices
A survey conducted by the New Food Economy found that 40% of Amazon employees had been peeved with off-the-clock work, 55% knew someone who had been injured at work and 90% said they didn’t trust their HR department to handle problems correctly.
Another study showed that workers at Amazon fulfillment centers often lack basic needs like clean water, toilets and sinks.
7. Kindle Unlimited was a failure
Kindle Unlimited was a subscription service that allowed people to access a selected number of books from the Kindle e-book store for a monthly cost.
It was an attempt to gain more market share in a market already dominated by Amazon’s e-books.
8. Amazon is also a leader in e-commerce
Amazon has been a leader in e-commerce for a long time now. In 2017, Amazon controlled 43% of the market share.
The company is expected to have a 48% market share by 2021, which means that Amazon will have near complete control over online sales.
9. Amazon’s ad business is growing
Amazon’s ad business has grown from $100 million to $1 billion in just two years. The company pays however much it needs to make sure they get the product reviewed as desired and whether or not those reviews are genuine or not doesn’t matter to them as much as it does to other companies like Yelp or TripAdvisor.
10. Amazon has its own security force
The company’s security force is like the NFL’s Enforcers. The highly trained and powerful team can stop any threats to Amazon warehouses by making sure that customers are happy with the number of items they receive.
They are also famous for throwing angry customers out of Amazon stores.
11. Amazon takes advantage of states’ tax codes
Amazon has been reported to have evaded paying tax to many states through a process called cash-out-forgiveness, which allows states to defer taxes on past forgiven taxes if a company does not pay all of its own overdue taxes in a single year. This is legal, but unethical.
12. Amazon is the top e-commerce company in the world
Amazon’s market capitalization is worth $877.4 billion which places it as the largest company in the world by a lot.
Walmart and eBay came second and third with a share of 20% and 1%, respectively. Amazon did not make 1% of its revenue from e-commerce sales, but it did make 3.1% last year.
13. The Amazon cloud service costs $600 per month to use
The Amazon cloud service is free for its Prime members, but not all users are able to get this perk, so they can pay $600 per month to access it through their web browsers or mobile applications.
14. Amazon’s marketplace is not fair
Amazon’s marketplace allows sellers to make money through customers buying their products, which can cause customers to buy the same product for different prices.
Amazon does not mind this because they want people to be able to find products easily.
