Is Amazon A Monopoly? Here’s Why Jeff Bezos Disagrees…
May 6, 2019
May 6, 2019
Jeff Bezos has always been compared to the likes of Lex Luthor and other supervillains as people see Amazon as a thing that is bad for society. But is that really fair? In this video, we’ll be going over just that.
I took a look at a YouTube video by The Hated One called “The Amazon monopoly and the problem with Jeff Bezos’ Business model” as well as comment on the things that was said there.
Amazon’s Revenue vs its Profits
The first problem he points out is that Amazon is operating at a loss despite its exponentially growing revenue. While it is true that they took some time to actually make a profit they are, along with Facebook and Google, experts at finding ways to pay less taxes. Alongside that, they are also constantly expanding and will spend quite a fair bit on R&D.
On Amazon’s Expansion
The video moves on to Bezos’ statement about investing aggressively to expand as they move to establishing an enduring franchise. While this is true, we’ve seen Amazon actually struggle in some marketplaces like in China where they’re actually withdrawing their services due to fierce competition there.
Amazon’s Use of Data
The video mention how Amazon collects user data which they use on their algorithms to personalize prices as well as going so far as to monitor competitor prices. I can only partly agree with this part. Yes, Amazon does try and take control of everything. They have access to a lot of data even us sellers are not privy to, yet they still have failed private label brands which goes to show that data analysis isn’t enough.
No Competition Left
The video goes on to say that they is no competition left for Amazon and that there’s no other company like it. This is something I can’t agree with as I’ve mentioned earlier that they really took a beating in China against the East Asian eCommerce giant, Alibaba. They have also been struggling in India due to intervention from the government so I’m not really convinced that they are monopolizing the world.
The video says that what the internet can do for now is to forgo intermediaries and buy goods directly from its source. You can do that, but look at how convenient it is to purchase everything is now and at a lower price.