Amazon is often seen as a business killer, decimating small businesses with its low prices and quick shipping. But is Amazon really the bad guy here? Or is it actually helping local businesses?
Well, let’s take a closer look at Amazon’s impact on small businesses and find out what has really resulted from the company’s popularity. Keep reading to learn more!
Amazon Vs. Local Business In 2024
Although more than half of the sellers on the Amazon marketplace are small to medium-sized businesses, Amazon has been accused of hurting local businesses. In the past, the company has been accused of bullying tactics like price manipulation. However, Amazon offers many benefits to help small businesses grow, like the Amazon Lending program in 2024.
To dive deeper into this debate and find more ways Amazon has impacted local businesses for better or worse, keep reading for more useful and interesting facts!
What Percent of Amazon Sellers Are Small Businesses?
According to Amazon’s website, “more than half of all units sold on Amazon worldwide come from Small and Medium-sized Enterprises (SMEs).”
This means that Amazon impacts small businesses, but it’s difficult to say whether that impact is positive or negative.
How Has Amazon Impacted How Buyers Shop?
It’s no secret that Amazon has changed the way we shop. On the one hand, Amazon has made it easier for people to shop online, which has increased the demand for products and services.
This has been a boon for small businesses that can sell their wares on Amazon.
We can now get anything we want, whenever we want it, and often, it’s cheaper and easier to buy from Amazon than it is to buy from a local business.
Overall, Amazon has made it easy to find what we’re looking for and get it delivered right to our doorstep.
Sure, Amazon has made it easier for us to buy things without ever leaving our homes, but that doesn’t mean that we’re never going shopping again.
In fact, Amazon has actually helped increase foot traffic in local businesses.
Amazon has driven customers into local stores by getting them interested in a product and then directing them to the nearest store that sells it.
So, while Amazon may have changed how we shop, it’s also helped increase business for local stores.
In the end, it will probably come down to individual companies and how well they can adapt to the ever-changing landscape of online shopping.
How Does Amazon Benefit Small Businesses?
Not only does Amazon provide a convenient one-stop-shop for buyers, but Amazon can also be a great marketing tool for small businesses. Consider the following tools:
Amazon Advertising
Amazon advertising provides sellers with new seller incentives to use its platform like money for advertising ($200 in free clicks).
By using sponsored ads and promotions, small businesses can bring shoppers to their products.
Moreover, sellers can create their own branded pages on the Amazon site to store their products.
In addition, Amazon also offers services that can help small businesses save time and money, such as Amazon Web Services and Amazon Fulfillment.
Amazon Web Services for Small Businesses
Amazon Web Services (AWS) is a cloud computing platform that provides small businesses with access to powerful technology without expensive infrastructure investments.
With AWS tools, a small business can set up many automated functions like:
- Mass emails
- Augmented Artificial Intelligence (AI)
- Cloud storage
- Databases
- Security
- Media services
Amazon Fulfillment Services
Amazon Fulfillment allows small companies to outsource their order fulfillment and shipping needs to Amazon to focus on growing their businesses.
With Amazon Fulfillment, small business owners can have Amazon:
- Automate business processes
- Store products
- Compile and package customer orders
- Ship and track orders
- Handle returns and cancellations
Experienced Account Managers
Each seller on Amazon is provided a dedicated account manager that provides them with helpful advice to help grow their business. Through these managers, business owners can get:
- Personalized recommendations
- Operational support for things like shipping
- Exclusive early access to pilot programs
- Assistance in dealing with issues that may disrupt business
Amazon Lending Program
One valuable benefit Amazon has to empower small businesses is the Amazon Lending Program.
In partnership with Lendistry, eligible businesses can receive loans and grants for business development. These funds can assist businesses with:
- Inventory management
- Product line expansion
- Company exposure
How Has Amazon Hurt Local Businesses?
Amazon has been known to put small companies out of business.
When Amazon first started, it would sell products at a loss to gain market share.
This pricing strategy would often drive small businesses out of business because they couldn’t compete with Amazon’s low prices.
Amazon has also been known to copy products from small companies and sell them at a lower price.
Overall, this “knocking off” practice has put many small companies out of business.
How Many Small Businesses Has Amazon Closed?
Amazon has been around for over 20 years, and during that time, it has undoubtedly impacted small businesses.
However, quantifying that impact is not always easy. In fact, there is no definitive answer to how many small companies Amazon has closed.
Some people claim that Amazon has caused the closure of millions of small businesses, while others say the number is much lower.
To learn more, you can also read our posts on Amazon vs Home Depot, Amazon vs Flipkart, and Amazon vs Costco.
Conclusion
Amazon has undoubtedly impacted small businesses, but it’s difficult to say whether that impact has been entirely good or bad.
On one hand, Amazon has made it easier for consumers to buy things but has also put many small businesses out of business from practices like price manipulation. Only time will tell how Amazon’s impact on small businesses will play out in the long run.
