by Madeline Canipe
CHARLESTON, SC - Amazon is known for its low prices, free shipping, and convenience. But, the question is, how does this impact the future of small businesses?
As more people shop online for clothing, appliances, groceries and furniture, small businesses have to adjust their marketing strategies to keep up with the e-commerce giant. .
And that’s not always easy.
How Amazon rose to the top
Jeff Bezos opened Amazon for business as an online bookseller June 16, 1995, and the intent was to offer a large selection of books at competitive prices.
By the end of 1996, Amazon had made around $15.7 million in revenue, with even more growth in the coming year. During that same year, Bezos personally delivered his company’s one-millionth order.
Since that auspicious beginning, Amazon has seemingly taken over the e-commerce world, making it so easy for consumers to buy whatever they want, whenever they want and without even leaving their couch.
With over 310 million active users globally, the corporate giant has made life much easier for consumers but quite a bit tougher for small business owners unable to offer the same ease and convenience for online shopping.
At the same time, since 2000 Bezos’ empire has made its virtual shelf space available to small and medium-sized -businesses so they can reach hundreds of millions of customers, build their brands, and grow their businesses.
But as Amazon has grown, the number of independent businesses has fallen. Between 2007 and 2017, the number of small retailers across the country fell by 65,000.
The e-commerce company thrived during the COVID-19 pandemic, managing to rake in huge profits at the height of COVID and its aftermath. Amazon posted $8.1 billion in profit during the pandemic, with an increase of 220% over the previous year.
It is projected that 2024 could be the biggest year for Amazon’s growth with total revenue expected to reach $517 billion.
The convenience of Amazon
One of the primary reasons for Amazon’s massive growth is its convenience to shoppers.
In fact, approximately 52 percent of Amazon shoppers say this is the primary reason they buy from the e-commerce website – convenience., It’s a one-stop-shop where they can buy different things they need.
Christine Brennan, an avid Amazon shopper, says convenience is her No. 1 reason for using the ecommerce site..
“I know I am probably getting a good price on it, and it just literally will be at my doorstep the next day,” she said. “I don’t have to worry about going to a store and then not have it.”
But this convenience for many consumers comes at a price for thousands of the country’s small business owners, who take a hit as more people choose the online shopping experience. A lot of people don’t enjoy shopping at small businesses anymore, when it is easier and sometimes even cheaper to shop online.
Caroline Swillen, owner of Hatten Boutique, believes there has been a decline in small businesses lately.
“As sad as it is, I feel like small businesses are kind of dwindling down,” Swillen said. “I think there will always be small businesses, but now there’s just so many things like Amazon and even Costco that sell everything you need and they can arrive here at your doorstep. I think a lot of people are using it for convenience.”
One of Amazon’s greatest convenience features is its same-day delivery option for many products.
This is hard for local businesses to compete with as a lot of customers now expect fast and free shipping. But like most things, if you can’t beat ‘em, you need to join ‘em. At least 51% of retailers now offer same-day delivery.
David Canipe, owner of Napa Auto Parts stores in Myrtle Beach, points out ways his small business is just as convenient.
“Along with Amazon, you can order something and get it delivered the next day,” Canipe said. “In our case, if you order from us, you can either pick it up at the store, and even in some cases we’re getting to the point where we can deliver it to your house the same day.”
“I think for Amazon, there’s pros and cons to it,” Swillen said, “because Amazon can both hurt and help small businesses, because it is such a big platform.”
Amazon also has an easy and effective return process.
“If you don’t like something, they have a great return policy and they’re very easy to deal with,” Brennan said. “If something in the package is wrong or broken, they are very on top of it. The customer service is just amazing, you can chat with them online, and you don’t even have to talk to them on the phone.”
More people shopping online
It’s also just really easy to shop online.
You can do it anytime of the day, whenever it’s convenient to you. Surfing for items on a website is a lot faster than trekking back and forth across a department or grocery store. And paying online is often quicker and simpler than standing in line to check out.
“People really don’t want to shop in a store anymore, honestly,” said Brennan, who shops online multiple times a week. “Online shopping has become such a big thing, and small businesses cost a lot more, and people are on a budget these days.”
Online shopping skyrocketed during the COVID-19 pandemic as people were stuck at home and trying to avoid mingling around other people. In fact, the in-person shopping experience has completely changed, encouraging customers to shop online.
A 2019 survey revealed a majority of people spend more money shopping in person rather than online. But since the pandemic, that has flipped, as people are making shorter visits to in person shops.
Swillen explains that one of the difficulties she has as a small business is getting noticed.
“Since Amazon is such a big website, a lot of people go specifically to Amazon, rather than looking up, for instance, my boutiques website,” Swillen said.
Small businesses are having to take note from Amazon, and enhance their online presence, especially since the majority of customers are shopping online.
“I think that all the small businesses have to have an online presence and make it to where you can easily order online,” Canipe said. “That’s what these businesses need to do, in order to survive.”
“While having an online presence, you can’t just expect people to call you up and place and order. You know, people don’t come out as much as they used to,” Canipe added.
Amazon can hurt or help a business
It is tough in many ways for small businesses to compete with Amazon. But Amazon also provides a tremendous opportunity for many businesses and non-profits by allowing them to sell their products on the Amazon site.
Amazon was the first retailer to open its website to third-party sellers to provide their wares alongside Amazon’s own products. That has increased selection and competitive pricing for customers.
“I think if you use Amazon properly, these small businesses can put their products on Amazon, which can ultimately help them,” Swillen said. “If you use it properly and sign yourself up on Amazon, then I think it could honestly be pretty beneficial to you.”
On the other hand, small business owners who do not choose to put their products on Amazon, have to learn to compete.
“I think that it’s really competitive, (Amazon) so just changing ways you do things, for example, ways your promote things on Instagram or on social media, trying to strategize to get more people to buy stuff, because Amazon is such a big platform. If you aren’t using it, then there’s that competitiveness,” Swillen stated.
Canipe notes how important it is for these small businesses to adapt to current trends in order to keep up with the e-commerce company.
“You know, it’s all about adapting to everything. With these small businesses, you just can’t do it like you used to. You’ve got to be competing,” Canipe said. “If you’re not, then you’re not making it more convenient for your customer. And Amazon, they’re all about convenience. That’s what you have to do to compete.”