Amazon is getting too big. And it appears it is about to realize Jeff benzo’s vision of having a retail firm that sells everything. Currently, households can go for months while purchasing all items from Amazon because the company offers a variety of products at low prices and the company delivers products at the client’s doorstep.
In the short run, it appears that the growth of Amazon is good because the company thrives by improving efficiency. The increased efficiency allows the company to offer products at low prices. Besides, the company’s ability to deliver products at the client’s doorstep has revolutionized the shopping experience. However, in the long run, the growth of Amazon shall allow the company to exploit consumer and put in place mechanisms that disallow firms to enter the retail sector.
The main beneficiary of amazon’s growth is consumers. The firm offers consumers the opportunity of acquiring products conveniently and at a low price. However, these benefits may not be sustainable in the long run. This is because the company shall have monopoly power and it shall start increasing prices.
Competitors find it difficult to offer products at low prices and provide a similar shopping experience. They are recording a decline in market share and this has led to declining in revenue and returns. The government does not benefit because amazon business model has been reducing jobs in the retail sector. Besides, Amazon increasing dominance brings a headache of monitoring monopoly tendencies that may increase in the long run. Finally, the disruption of retail has led to the closure of many firms making investors to incur high losses and workers to lose jobs. Therefore, everyone should be worried about amazon’s growth.
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