Why Amazon Succeeds in Business Can Be Considered Close to Improper Consumer Exploitation

Updated: Dec 28, 2020

The exploitation opportunity made available to globalist companies by the Covid 19 hoax has been devastating to small business owners and consumers.

This opinion article/episode is about Amazon’s negative impact on consumers. There are other companies similar to Amazon which are also shutting down many businesses under the guise of Covid-19 lockdowns.

Amazon has a legal business and this article/episode is not challenging Amazon’s right to conduct business.

This article/episode is about the consumer exploitation by companies like Amazon under the protection of CDC crooked guidelines and heavy-handed state governor, public health, non-legislative directives.

I believe if consumers spent some time studying how they earn dollars, how their dollars are spent, and how their dollars are viewed by companies like Amazon, consumers would think differently about their actions to shop purely for discounts.

The first and last time I shopped at Amazon was when I purchased earphones with a microphone for my mobile device. The price was ridiculously low. I believe around $12. I would have easily paid about $29 if I purchased at Best Buy.

I was excited to get the earphones at that price. What a deal for me! Or so I thought. The package arrived in the mail all the way from China…from a city name beginning with a G…I believe Guangzhou, China.

I was initially unhappy that I did not support an American company. Then, two days later, I was angry and regretted that I did not buy the earphones from an American company when the earphone pretty much fell apart. The wires just fell out of the rubber or plastic harness. I only used the earphones for about 90 minutes!

I understand that so many products are not manufactured in the USA because of past globalist decisions. But at least, as I have learned, my community stays vibrant when I shop local.

Let’s first discuss what Amazon knows about consumer dollars.

Amazon knows that the majority of Americans are not business owners and do not view the value of the dollar the same way Amazon does.

Consumers are preconditioned to work very hard and do just about anything to earn dollars. Consumers will work two jobs, three jobs to make enough money to pay bills, to buy food and cover other necessities. After all necessities are paid, consumers have extra money or discretionary income to spend on things consumers enjoy.

Consumers feel that they should reward themselves with nice things in life because they worked for the money. Since most consumers live on a budget, there are just so many dollars to allocate to buying things they want or need. Most consumers shop on the principle of paying the least amount of money possible for products and services.

Consumers use the logic of why pay $25 when the product or service can be purchased for $17. That’s an $8 saving. The extra $8 can extend the consumer’s purchasing power. The $25 can now buy two items to satisfy the consumer. Buying the most items for the least amount of money gives consumers a high dose of satisfaction.

The ability to save money motivates consumers to get up on Monday and work five days per week to feel the euphoria of buying products and services all over again with their paychecks.

Here’s some inside information.

The majority of businesses anticipate and hope most Americans have the desire to work hard and shop without regard to how money is earned, how money is spent, and what happens to spent dollars.

The majority of business owners through marketing gimmicks and psychology studies know that most consumers want to feel good about spending their monies.

Small Business owners know they are receiving huge benefits on their end. Small business owners are receiving profit and highly desire to generate repeat business. The more repeat business, the less marketing dollars are spent. Small business owners always receive tax write-offs for moving products and services.

Small business owners’ other challenge is to put competitors out of business. The more the number of competitors, the more difficult it is to beat the competition. The less the number of competitors, the easier it is to beat the competition.

When a company gets to the size of Amazon, other benefits are available.

Large corporations, when only a few large numbers of competitors exist, get to shutdown many small businesses. All the big corporations need to do is drop prices low enough to wipe out small business owners’ profit margins. Small business owners who have many competitors operate on small profit margins.

Large corporations also have the power to pressure wholesale companies to lower their prices. Meaning, a large corporation can demand a wholesaler sell at $5 instead of $8. This $3 discount alone to the large corporation can wipe out small business owners.

Without Covid-19, the small business environment is tough because the big corporation is slowly putting the little guy out of business.

With Covid-19, big corporations are swiftly shutting down small business owners especially when the government imposes unconstitutional restrictions and lockdowns.

Amazon is raking in the dollars because the government is indirectly forcing consumers to buy from Amazon by restricting and shutting down small business owners.

With small businesses now shutdown, Amazon can now go back to wholesale companies and ask for much larger than discounts than $3…perhaps $4 because wholesalers have now lost their small business customers.

Look at this way, the wholesale $4 discount can be given to consumers on top of any other price reduction ONLY big corporations have.

What if the big corporation like Amazon has other income streams to provide even bigger discounts to consumers? What if the big corporation operates a media company or technical company where profit margins may be 25-30%?

Perhaps companies like Amazon can drop the $25 dollar product or service from $17 now to $14. No small business can compete if a $25 suggested retail price is reduced to $14. In some situations, a company could be called a monopoly or be charged with unfair business, antitrust violations.

An unfair business practice is when a company cannot legitimately compete against another company. Microsoft lost a massive court case in 1996 when the Department of Justice under Democrat Attorney General Janet Reno found Microsoft had pretty much shutout most computer software and hardware companies who could not connect their products and services to Microsoft software.

Let’s keep it moving.

Suppose a company gets the majority of its inventory from China where labor costs are 90% less than in the United States? No American small business can compete when the other guy has 90% lower labor cost.

What if another entity is funneling money or investing in the big corporation’s stocks? The big corporation is already dominating the market as an economy as a market leader. Now, there could be even more money, maybe even foreign money, coming in as investments to shutdown even more small businesses.

Readers may think what I just described over the last few minutes is great for American consumers. Consumers have access to products and services at ridiculously low prices. What could be wrong with that?

Well, a lot is wrong with big corporations having so much power and control that communities are negatively affected…especially with Covid-19 business shutdowns. I actually think the Amazon relationship with state governments and Covid-19 lockdowns is potentially illegal and criminal.

But, Rick, the consumer is benefiting by paying extremely low prices. Yes, but these extremely low prices are hurting your neighbors and communities.

What if your neighbor just lost his job because he worked at an Amazon supplier? The supplier had to lower his wholesale prices to $4. But for the wholesaler to make a profit, the wholesaler had to lay off 5 employees to make up the loss revenue of lowering the price to $4, and your neighbor was one of the 5 employees losing his or her job.

What if Amazon shoppers had to pay the 5 laid off employees’ bills, rent, and mortgage payments? If Amazon shoppers each saved $10 per transaction, and each laid off employee had collectively $20,000 in monthly bills, 2000 Amazon shoppers would need to give their $10 discounts (2,000 X $10) to the five employees.

I have a great idea. What if the 5 laid off employees just start working at Amazon as truck drivers or warehouse workers? Maybe this would accelerate the closure of more businesses. Maybe a different set of 5 people or nationwide, 500,000 people lose their jobs because of Amazon’s power.

Maybe all 500,000 people could work at Amazon. Maybe everyone in the United States could work at Amazon. Maybe Amazon could offer hair salon, auto repair, dog grooming, flower shops, computer programming, dental treatment, legal services, escort services, coffee shops, airline flights, etc. You know where this is going, right?

One company should not have this much power. And this started because consumers did not care where they spent their dollars. Consumers just shopped for discounts when, I my opinion, the discounts were unbelievably hard to offer consumers.

There’s a saying people use in life. “If it’s too good to be true, there’s probably a catch or what you see is not as it appears”.

Although I no longer spend money at Starbucks, I have to give them much credit. Starbucks raised their prices for a small drip coffee from $0.65 in 2000 to currently about $2.15 as of June 2020. This is Economics 101, supply and demand. Consumers still buy the coffee even though the price has tripled. And because people are willing to pay $4-$7 for designer lattes, mochas and iced coffee smoothies, these high Starbucks prices have attracted competitors to the retail coffee shop industry.

People still working may consider themselves loyal Amazon customers. But what if Amazon opens hair salons and you own a hair salon? How would this impact your hair salon business?

What if Amazon opens auto repair shops and you have owned an auto repair shop for 15 years and employ 20 people? Your auto repair shop does about $5M a year in business and here comes Amazon offer auto repair services for 25% less than your standard shop prices.

Over a year, people need auto repairs start going to Amazon Auto Repair. And you look at your fair prices and you wonder how can Amazon Auto Repair charge 25% less than standard auto repair rates? Then you discover because they have other profitable businesses, it's no big deal Amazon Auto Repair to underprice repair services.

The point is the hair salon and auto repair shop owners would never hurt their own businesses by using Amazon hair salons or Amazon auto repair shops. But consumers have no equity position with your business.

Significant discounts will also kill any loyalty consumers have with your business. They could be 10-year customers, but some consumers will leave you for a 20% discount.

What about Amazon Dental Services? You get the idea now, I hope.

To wrap up this article and episode, it seems like more people need to own businesses in order to protect their ways of life. Instead of gigantic Amazon, there needs to 10 Amazon like companies so that the 10 could compete and keep prices fair so communities can survive.

Hopefully, I have shown how shopping for discounts…I mean deep, unrealistic discounts can have negative short-term and long-term consequences.

Shopping for unreasonable discounts kill economies, causes layoffs, hurts communities…and most of all, gives extreme power to companies who may not have America’s best interests as their top concern.

Click HERE to watch a Frontline PBS comprehensive video about Amazon.

Thanks for reading and listening to this information.

Rick, Founder

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