Before You Click…

This is the first of several short pieces designed to inform businesses, consumers, and policy-makers about the impact of Amazon on local economies. It will come as no surprise to most of us that Amazon has rapidly increased its sales and services throughout the U.S. and the world. After all:

  • Half of all U.S. households have an Amazon Prime subscription account
  • Half of all online shopping searches start directly on Amazon
  • Amazon captures nearly one in every two dollars spent online in America
  • Amazon sells more books, toys and in 2017 will sell more clothing and electronics than any other retailer, online or off.

So what does this mean for our local economies? If consumers, businesses, and policy-makers are not educated and informed, our local communities will continue to see fewer local businesses and jobs, reduced tax revenue, less innovation, diminished community attachment and smaller GDPs. Communities, especially local consumers and businesses need to understand that convenience comes with a price.

  • That one-click option rarely means same day delivery in western North Dakota. The truth is, if your local retailer doesn’t have what you’re looking for that very day, they can order what you want and have it delivered as quickly as Amazon can.
  • Each search and purchase you make through Amazon Prime is tracked. While you may perceive that as a customer service feature to make you feel as if Amazon is catering to your needs as a consumer, there is growing evidence that Amazon is using its vast amount of data about your shopping and buying habits to raise prices, block access to certain products and delay shipping times for customers who decline the Prime membership program.
  • By using Prime to aggregate shoppers, Amazon is leaving rival retailers and manufacturers with little choice but to become third-party sellers on its platform.
  • Amazon is fueling a sharp decline in the number of independent retail businesses which manufacturers say is making it harder for them to get new products and creators out into the economy.

So, before you click, consider the hidden costs of doing business online to your local economy. Consider moving 10% of your online shopping back into your local economy and Go Local!

Data for this piece can be reviewed at www.ilsr.org.