FAIRBANKS — According to a new study conducted by the Institute for Local Self-Reliance, Amazon is reaching monopoly status. This expansion has happened in fire-drill fashion: quickly and quietly. Amazon has distracted us with its low prices, convenience and Alexa’s soothing voice while the mega-retailer silently becomes the gatekeeper for our online (and offline) purchases.
“Jeff Bezos (Amazon’s CEO) is betting that he can make buying from Amazon so effortless that we won’t notice the company’s creeping grip and all that we’re losing as a result,” according to the ILSR study. And what we’re losing is substantial.
Amazon is like an anglerfish: a big, intimidating master of disguise. The angler hides among the coral and lures in prey using its glowing esca — the fishing-rodlike appendage sprouting from its head. Prey don’t even know they’re in danger until they’ve been swallowed whole. That’s Amazon. All we see is a small, glowing appendage of the company, which distracts us from the massive mouth we’re swimming into. The longer we remain distracted, the more our communities will feel the effects. For example, the study illustrates Amazon’s growing market share has led to tens of thousands of small business closures, and steep decreases in tax revenues, manufacturing and innovation.
Currently, Amazon captures $1 of every $2 Americans spend online while simultaneously reducing the number of employees it needs to function. No money stays in our economy when we shop online, and the retailer we’re buying the most from is not creating jobs in Fairbanks or paying into our coffers. The more we spend online, the more our economy resembles Swiss cheese. Conversely, every dollar we spend at Fairbanks businesses triples in impact, which keeps our taxes low, enhances local business owners’ success and creates more jobs with livable wages and benefits for Fairbanksans.
Money draining from the economy via the Amazon conveyor belt is only a fraction of the problem, though. The greater issue is the retailer’s allergy to competition. Based on its acquisitions during the past decade, Amazon seems intent to dominate every industry. From the shoe company Zappos.com to the brick-and-mortar organic foods chain Whole Foods, Amazon is in the business of takeovers.
“As Zappos soared in popularity, doubling its sales between 2006 and 2007, Amazon offered to buy it,” according to the study. “When Zappos executives refused to sell, Amazon debuted a competing shoe site and started selling shoes at a loss, offering free overnight shipping and, later, $5 rebates on every purchase. ... All told, Amazon lost $150 million on the gambit, and it prevailed: In 2009, hemmed in by financial constraints, the Zappos board voted to sell.”
If Amazon can shake down a multimillion-dollar company such as Zappos, imagine how much tighter its chokehold is on independent businesses. Nowadays, consumers are more likely to begin their online shopping on Amazon as opposed to search engines. Meaning, if independent businesses wish to remain visible, their best bet is to become third-party sellers on Amazon, ensuring Amazon gets a cut of their profits. Doing this doesn’t guarantee visibility, though. Amazon has grown so large it “increasingly controls what products make it to market and appear before us as we’re browsing. It has the power to pick winners and losers.”
So what’s the solution? Quit shopping online? Boycott Amazon?
Please! Online shopping is unavoidable in Alaska. And if we can get free shipping, all the better. Besides, if every Alaskan boycotted Amazon it would be the equivalent of trying to slay a dragon with a knitting needle. However, allowing Amazon so much power goes against Alaska’s tightly held independent spirit. To think a company is manipulating our choices and threatening the livelihoods of Alaska business owners is repulsive.
By making small changes, we can lessen Amazon’s negative impact on the Fairbanks economy. For example, tally up how much you spent online last month. Take 10 percent of that number and commit to spending that much money at local businesses next month. Then spend an additional 10 percent the month after that and see how long you can keep it up. Become familiar with the local inventory so when you need an item you’ll know exactly where to find it.
Unlike Amazon, the anglerfish doesn’t pose a threat to its ecosystem. If left unchecked, Amazon’s invasive species status will only grow more insurmountable for communities. But with heightened awareness, we can take back control. To read ILSR’s study, visit the resources page at www.FairbanksFirst.com.
Samantha Reynolds is project manager for the Fairbanks Economic Development Corp.