There Amazon offers Prime for $99/year which gives

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Last updated: September 29, 2019

There are so many ways in which Amazon changed the way retailers do business.

Amazon is an innovation that caused many retailers around the country to indirectly be  forced to shut themselves down. This online retailing company is so huge that no small business can compete with it. There are so many different innovations and ideas that Amazon has created and is continuing to create. This essay will discuss different changes that Amazon has made to the economy.  Amazon offers Prime for $99/year which gives the buyers many perks including free shipping. Most businesses make you buy a certain amount of merchandise in order to receive free shipping.

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However, with Amazon Prime, you can receive free shipping on any Prime item no matter the price. This is another big reason people are buying from Amazon instead of other retailers. When purchasing something online from Target or Walmart, one must have at least $35 of merchandise in his cart in order to receive free shipping. If someone isn’t buying that much but still wants free shipping, Amazon is definitely the right way to go.

According to statistics, there are more than 85 million people paying for Prime who spend an average of $1,300 per year.      Many retailers out there don’t allow returns or have an inconvenient return policy. They make you return things within 30 days, in the original package, with the original receipt. Amazon has an unconventional return policy which reimburses their customers and sometimes even allows them to keep the unwanted item. Amazon will take back anything and everything whether you have a good reason for returning it or not. If you use one of their products and decide you don’t like it, you can easily return it.  Amazon has a growing number of fulfillment centers which not only makes shipping faster and cheaper, but enables them to reach a wider audience for one-day and same-day shipping. There are some states in which you can order an item and choose one hour delivery by checkout.

This is possible because that specific state has an Amazon warehouse and Amazon trucks that are constantly doing home deliveries. This is an amazing service that Amazon has because for people who can’t leave their house, they get whatever it is that they need in the same amount of time it may have taken them to get out of their house and to wherever they needed to go.     Due to the Amazon Effect, the entire brick-and-mortar retail industry is slowly shutting down. JCPenney is closing 140 stores, Macy’s is closing 100 stores, Sears is closing 150 stores, HHGregg is closing 88 stores, and CVS is closing 70 stores. This is all happening because people are more reluctant to run out to the store when they need something, if they know that they can just click once and have the item on their doorstep two days, or one day, or even one hour later. Because of Amazon, many workers are becoming unemployed. So many stores are shutting down and these big department stores can’t afford to keep all of their workers.

Every time a store closes down, all of its workers are unemployed since there is no longer a need for them. However, Amazon has created 382,400 jobs as of last June. Even though the many people are losing their jobs in certain areas, Amazon is slowly making up for it by creating more and more jobs.     Amazon is based off of online sales, so it doesn’t need a storefront.

This helps cut their budget. Most store owners struggle to pay rent and therefore don’t have a lot more money to buy things their store actually needs.  Amazon doesn’t need this and so their income is naturally higher than stores based in a building. In a recent report, Amazon is said to have 341,400 employees. This includes full time and part time employees. Considering how big the company is, this number is very low because Amazon doesn’t have a significant storefront like other big businesses. (i.e.

Walmart which employs 2.3 million people) In the past, Amazon has been sued by company workers who claimed that they received less than minimum wage and were forced to work in harsh working conditions. Amazon pays nearly half of the income taxes than other companies. Other tech giants like Facebook and Apple also pay a significantly lower tax rate than average stores. Not having a physical employee in certain states saved Amazon sales tax. The National Conference of State Legislatures estimates the 2015 tax revenue loss at $25 billion. Amazon acknowledged this issue and over a period of time, started collecting sales tax on all goods that were sold or delivered to states with this tax law. Amazon made its stock market debut 20 years ago and had someone invested $100 back then, it would have been worth about $63,000 now.

    The Amazon Effect is making other businesses shut down which is potentially hurting the economy a little. It is raising unemployment, it’s preventing inflation from going back up, and it’s putting pressure on brick-and-mortar businesses. Other cons about the Amazon industry include the fact that firms can gain monopoly power and exploit consumers.

Firms with a monopoly of power can pay low wages which can lead to externalities which can damage the environment.   Amazon has helped the economy in many ways. When consumer goods prices decline, consumers can purchase more and the GDP increases. Since Amazon has so much competition, all of their sellers want to lower their prices so that people will buy from them.

This decline of prices causes consumers to buy more products thus increasing the economy’s GDP. Another big pro that Amazon has had on the economy is that it has increased business for the trucking industry. Since online sales have skyrocketed, more trucks are required to transport goods that people ordered. Sellers on Amazon have hopes of being rich and therefore, begin to create new things to sell. Consumers also have free choice to choose whatever products they desire. This prevents a large bureaucratic government. Through Amazon, small businesses are saving ad money by advertising for their products on Amazon.

In one year, 100,000 sellers have each sold $100,000 of merchandise. This shows how many jobs Amazon has created. Even though many businesses are firing workers and shutting down, Amazon is offering so many more jobs to people.

Amazon is a big part of online retail but there are many other stores that play a big part. Consumers in general are buying online in all stores but Amazon does play a huge role.   Amazon has introduced lots of technology found in homes around the country. The Amazon Dash Button is a little button that consumers place around the house. Each button corresponds with a commonly used household item and when the consumer is running low, they simply press the button and the item is shipped.

Amazon also recently introduced the Echo Smart Speaker. It can do so many things just by you saying so. It can play music,  call people, answer questions regarding weather, traffic, and news, and it can even control fans, lights, garage doors, and so much more.

Amazon’s web services have also helped businesses be successful in the cloud.

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