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Amazon, the Merchant

Writing space in 2000 with a locally made central processing unit via which I ordered from Amazon.

We logged on to the internet from home for the first time on April 21, 1996. I made my first purchase from Amazon.com on Dec. 23, 1998. It was a gift card for my spouse.

During the first years on the computer I purchased a lot of VHS video tapes and almost no books from Amazon. Among those early purchases were The Great Train Robbery, Birth of a Nation, The Jazz Singer, The Seventh Seal and Roshomon, videos not available in local stores. I bought my first book in 1999, Decline of American Gentility by Stow Persons. It was unavailable in local bookstores even though Persons taught his course on American Intellectual History in Schaeffer Hall at the University of Iowa Pentacrest.

For books and videos, Amazon offered availability few others did. The immediacy of the internet made it preferable to driving half an hour to the nearest vendor in the county seat to place an order, then to return weeks later when the item arrived. When a person lives in the country, online shopping makes a lot of sense.

In 1998, Amazon.com reported a net loss of $124.5 million on $610 million in sales. They got better and are now very profitable. 2020 annual revenue was $386 billion with net income of $7.2 billion. They continue to grow and improve profitability, although no one dreamed they would dominate the marketplace as they do.

The trajectory of Amazon’s growth will accelerate as the company continues to control more of the supply chain and masters last-mile delivery (literally, the last mile(s) before the package reaches the customer’s door); This is the most difficult and complex aspect of fulfillment yet one of the most important touch points in terms of customer satisfaction.

Forbes Magazine, Feb. 21, 2021.

There are companies besides Amazon.com that moved their business model toward vertical integration, where all aspects of production through customer delivery were controlled. In the late 19th Century owners of such companies were called “robber barons” after feudal lords in medieval Europe who robbed travelers. The current owner of Amazon.com, Jeff Bezos, is easy to demonize as a robber baron, yet his business model requires customer satisfaction. A more practical criticism is to realize it is time for federal regulators to break up Amazon.com.

In Iowa, Teamsters Local 238 in Cedar Rapids is organizing local Amazon workers at facilities in Iowa City and Des Moines. Unions have had little recent success organizing private sector workers in Iowa. Most prominent union spokespeople in the state represent government workers. I am interested in Amazon from multiple perspectives.

If Amazon did not exist, there is little local retail infrastructure to replace them. For example, our local hardware store carries common items used to run a household. I enjoy going there first when I need something. One out of two times they don’t have what I need. Our local grocery store does not have many organic options. There are no specialty shops like books, fabric, and sundries. Bottom line, locals rarely have what I need.

When I look at recent online purchases, I’ve ordered a few things direct from vendors (a new Dell CPU and garden seeds). I get most clothing from J.C. Penney online, food from COSTCO, and books from Amazon. With the coronavirus pandemic more household sales went online.

In addition to retail availability, Amazon delivery drivers have become a presence in our neighborhood, as familiar as the United States Postal Service which also delivers some Amazon goods.

On Saturday I become officially “vaccinated” as it will have been two weeks since my booster shot of COVID-19 vaccine. Coming out of the pandemic I need new topics to write about and Amazon is in my sight. After 25 years of buying from them, I’m ready to do something else if they do not resolve some of the injustices created while growing their business, or if government regulators do not step in.

With a fixed income, managing money is important and lowest price for quality goods matters. Amazon is a suitable new topic for this blog.

As always, relevant reader comments are welcome.

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