Once in awhile I get beat up on this blog for linking to relevant Amazon products in a given article. After all, they are to blame for putting “Ma and Pa” shops out of business, right? I want to address that issue in this article.
Why do I get beat up? A number of reasons. Primarily, some believe that Amazon is to blame for the displacement of the “Ma and Pa” shops that used to dot the landscape years ago. There is a belief that Amazon has put small business out of business. And that I am part of the problem by using their services or promoting products on their platform.
First, I need to explain to you why and how I receive compensation for the work I do here on this blog / website. It’s “my job” so to speak. Then I’ll get into my opinion regarding Amazon. Keep reading.
Revenue is Required | Amazon is Part of it
I am approaching the tail end of my 5th decade on earth. I worked several rewarding careers during my life. Nearly 10 years ago I parted ways from a well paying job and chose to step it down several notches. I did this for a variety of personal reasons which I won’t go into.
I started this blog during 2010 shortly after leaving my previous career. It was for fun, to unwind a bit. I was into preparedness and had concerns about our future (still do). The blog seemed perfect for that.
After the first year it was actually earning some advertising revenue. Not much, but it indicated potential. I decided to stick with it. The site grew over the years. It was then, and still is today, my revenue earning “job”. It pays the bills here at the homestead. I don’t think people realize that. If the blog were not financially successful enough, I would have to end it. Focus efforts elsewhere. Period.
Blogs like this one may earn revenue from the following ways:
- Direct advertising. Companies paying a monthly fee for branding & advertising their banners. My directs are in the right-hand sidebar and I promote them with specific articles on occasion when it’s appropriate. I hope that you visit them.
- Affiliate commissions. There are many affiliate platforms out there. Amazon is obviously the biggest one. Depending on variables, a commission is earned when a customer purchases a product through a website’s link (with caveats).
- Donations and contributions. They come from the readers themselves. This is becoming increasingly important in this particular arena where this blog resides. A sincere thanks to those who do.
There are other means, but the point I’m trying to make is that a company like Amazon helps to keep this blog online.
Okay, now that I got that out of the way, lets address whether or not Amazon is to blame for “Ma and Pa” shops disappearing (or are they?).
Is Amazon to Blame?
Is Amazon Putting Small Business Out Of Business?
I wonder how many of you know this: There are more than 1 million small businesses who sell through Amazon. I actually know a few people who sell their products from a home business through Amazon, and couldn’t have done it otherwise.
According to a recently published “Small Business Impact Report” Amazon has “helped more than 1.9 million U.S.-based small and medium-sized businesses (SBMs) generate more than $160 billion in 2018.”
Now before you label me as a promoter for Jeff Bezos, which I am certainly not, please understand this: Technology, Markets, and Market Channels Change over time. I sometimes write about it on the blog, and “it” is the ability to adapt and overcome.
How many businesses have been left in the dustbin of history because they could not or would not change with the market conditions?
Although I do not sell a physical product on Amazon (I just link to products once in awhile), if I wanted to start a small business making and selling widgets, you betcha I would look into having a storefront on Amazon. It’s like the big mall of yesteryear except it’s online instead with a huge customer base.
Does that mean I don’t wish there were more “Ma and Pa” shops around? No, it means that I must accept the changes in conditions and adapt to it.
If I do not participate in buying products from Amazon, will that make a difference? Of course not. Why? Because a company like Amazon is the result of a complex set of circumstances which has enabled its existence.
How Can Amazon Exist?
In my opinion, you have a ruthless leader who has utilized modern technology to build an empire. I wonder if that has ever happened before in history? (sarcasm)
Has Amazon grown too big now? Maybe. They have the money to do it, a desire to get bigger, and influence within the halls of government. As with most spreading empires, they gobble up more and more.
How Did This Happen?
If I had to sum it up as brief as possible, Amazon’s success has been a combination of technology and government policy enabling someone like Jeff Bezos to do what he has done.
It marches on. As technology advances, it is often utilized to replace what came before. Why? Cost advantages, improved services, features, capabilities… Is that a bad thing? Maybe sometimes, if used in ways that are detrimental. Detrimental to what? Our freedoms, rights, liberties? I’m on board with that. However is all technology bad? No, I don’t believe so…
The world wide web. The internet. Online. Our world has changed dramatically because of the ability to transact and interact online. There are inherent risks and dangers which I write about on this blog once in awhile (systemic risks thereof). But the point is that we have come from the “cave man” to “modern man” due to technological advancements (and the discovery of cheap oil energy). But that’s not what this article is about.
Government Policy Impact
Do you remember when NAFTA came out? Government policy opened the door to cheaper manufacturing outside the United States. Lots of jobs began to leave. Cheaper economies of scale.
The big one is products coming from China. Talk about cheap labor… This has entirely changed the playing field. We live and participate (often unknowingly) in a global economy due to policies put in place by our own government. Who’s government is it? We the people, right?
Industry has leveraged and advantaged cheaper products from China and elsewhere. We the people have become addicted to these cheaper products to the extent that they won’t buy more expensive products if given a choice “Made in the USA”. But I digress… What does that have to do with “Ma and Pa” shops or Amazon?
Where Have the Ma and Pa Shops Gone?
Are they really gone? Or just some of them? Or have some of them shifted their markets? To be clear, I see quite a few of them in my travels. Though it’s not like many decades ago.
My Little Town
In my tiny town of about 1,000 residents, we have a sort of “Ma and Pa” shop. It’s the ‘Old Corner Store’ owned by a family in town whom we know (everybody knows everybody here). The store is not very big, but they have a lot of basic supplies inside. They have a great little deli, and kind of a small convenience store which also sells some local products (among lots of other little things). They sell gas and diesel out front too. In fact I just got back from picking up some burger buns for grillin tonight.
When I travel, I nearly always notice small “Ma and Pa” stores in a little town here and there. They’re still around. Even in bigger areas there’s a niche.
The Next Town is a Little Bigger
The next town over, about a 10 minute ride, supports about 3,500 people. They have a number of “Ma and Pa” small business shops downtown! In fact they’re doing great. There’s also a decent size hardware store owned by a family company from a neighboring state which has expanded their reach. Up the road from there about 10 minutes is a bigger chain ‘ACE’ hardware with even more product to choose from.
About a 30 minute ride south, there’s a bigger town of about 6,000 where you can find some ‘Big Box’ stores like Home Depot, Lowe’s, Walmart, and others. People will drive there from the entire surrounding region to get what they need. I do too, when I need to.
The more population, the more Big Chain stores (same with grocery stores).
You will still find “Ma and Pa” shops there. Though they are usually of a specialty variety, restaurants, boutiques, touristy, and other types which set them apart. In fact that town has the world’s longest candy counter in one of those shops. Pretty cool… There’s an awesome fresh vegetable store “Ma and Pop” shop, and a ton of others actually.
That said, the “Ma and Pa” grocery stores and hardware stores of decades ago are few an far between. The technology train and economies of scale have shifted and altered that landscape. In many instances “Ma and Pa” sold their grocery store or hardware store to “the chain” store who in turn are now servicing the people there.
Back to Amazon…
People used to buy their books at a book store. A few chains still exist, but that’s how Amazon got it’s start. Jeff Bezos was selling books online. After awhile, online sales started catching on. Consumers liked the convenience, broader product selection as Amazon enabled more markets. And now with Amazon Prime membership you can get your ‘stuff’ shipped for free to your door in a day or two. Evidently people like that. Hence part of their success.
I do not live in close proximity to many products without having to drive for awhile. I save a lot of money buying products off Amazon in this way. Not to mention that “time is money”, right? Am I wrong or a bad person who is “feeding the system” for purchasing some of my products online? Do I get ‘good’ credits for buying my diesel for the Truck at the Old Corner Store? (and the hamburger buns I bought today)?
I look to my left as I type this and I see a ‘Camping World’ flyer that I got in the mail. Is it just as ‘bad’ if I buy something from them (being a chain store) compared to on Amazon? Or is it just a little better with regards to my ‘social credits’ because they’re not as big?
Will Amazon Take Over The World?
Most businesses want to grow. To increase their profits.
Not all though. For example there’s this excellent little bakery / coffee shop the next town over. She started her business a few years ago. It has been a hit in the local area. Will she expand into being the next Starbucks or Dunking Donuts? No, I think she’s happy doing what she’s doing.
I could go on with other examples just in my own area.
That said, yes, most companies will expand to the extent that their leadership wants to.
Could a company like Amazon basically swallow up everything and take over the world so to speak? It seems like they could! It sure looks like therer is enough people who are using / buying their services to enable ongoing expansion…
How Big is Too Big?
That is a powerful question isn’t it? Who’s to say what “too big” is? What are the thresholds? What are the impacts? I don’t have the answers for you. Your and my opinion may be different. Or maybe not. This is big “think tank” stuff. Policy decisions.
If for the sake of argument the government breaks up Amazon, would that trigger a chain reaction crash as their massive distribution channels break and people can’t get their ‘stuff’ like they used to?
Maybe the price for that stuff goes up 33%? Maybe Walmart takes over the slack, but now you’ve got another big chain like them to break up?
People and their budgets are reliant on the current price scale. What if all that goes way up?
Is there a way to turn back the clock to the days of “Ma and Pa” shops everywhere? Or are those shops now mostly relegated to vintage photographs?
These are just questions. There are so many more.
Lets land this plane…
Alright, I’ve got to finish this article. What was the question again?
Oh right… Is Amazon to Blame for “Ma and Pa” shops disappearing and are they putting small business out of business, and am I as a blogger “feeding the system” when I link to their products for a small commission of sales?
I don’t know. You tell me…
I dare you to click this link.