Amazon.com takes food from the mouths of every merchant in Columbia — as well as every small town in Mississippi and beyond. The online seller of all goods under the sun has plundered by undercutting on price because it’s not been expected to do little things like, you know, make money.
Rather, its shareholders have been content with bringing in more revenue regardless of the associated expenses under the anticipation that it will eventually prevail as the dominant retailer and make a windfall. How can other businesses, which need to make a profit to exist, expect to compete against that?
Many haven’t. They’re boarded up or in bankruptcy court; Sears comes to mind first.
Yet there’s some good news for Main Street USA: Indications are emerging that Amazon could blunder by over-expanding in its quest to take over all aspects of American life.
First, an example from history: The two men who in recent epochs who have come the closest to conquering Europe, Napoleon and Hitler, both failed in large part because they invaded Russia. Neglecting the details, the land proved colder and the people more ruthless than they anticipated and led to the turning point of their wars. Those campaigns will forever be remembered among history’s great miscalculations.
Amazon, by way of analogy, is also at the height of its powers — CEO Jeff Bezos is currently the richest person in the history of the world thanks to his Amazon stock, according to Forbes — but at this moment is invading its own Russia by trying to get into the shipping business. According to recent reports in the Wall Street Journal, Amazon became upset when a logjam in the 2013 holiday season resulted in packages being delivered after Christmas and began exploring options for its own delivery.
Now it is setting up a shipping service that will begin in Los Angeles and gradually expand to other cities. It’s called “Shipping with Amazon” and will involve Amazon picking up packages from the third-party businesses that sell through its site and delivering them to consumers, according to the Wall Street Journal story.
Perhaps this is just a negotiating ploy to force UPS and Fedex to give it better rates. But they don’t appear to be biting. Fedex, for example, when contacted for comment about Amazon’s foray into delivery pointed to a video touting its worldwide delivery network of 650 planes, 150,000 trucks and 400,000 personnel. The point was clear: Good luck, Amazon, in jumping into all of this as a sideline that we’ve been building toward for 40 years as our bread-and-butter.
I’m reminded of people with no background in agriculture trying to get into that business in the Mississippi Delta because they see the large profits and new trucks of established farmers. It rarely works out; there’s a lot that goes into making a good crop that takes years of first-hand knowledge to figure out.
Same with the shipping business, or really any other field. Getting out of your key area of expertise is a quick way to get in over your head.
Another salient point is that Amazon, although no doubt a mighty force in retail, is nowhere close to a monopoly. Fedex, according to the Journal article, has said no customer makes up more than 3 percent of its business, meaning Amazon is not such a dominant player in the field that it can completely dictate terms to its suppliers.
Perhaps it has tried and been unsuccessful at doing that to Fedex and UPS in negotiating for lower rates, which involve a lot of hard expenses in fuel and personnel that can’t be cut much further. So it’s stubbornly trying to save another way by starting “Shipping with Amazon.”
Let’s hope Amazon falls flat on its face in this venture. I’ll be patiently waiting for the other destroyer of America, Facebook, to do the same. If history has taught us nothing else, it’s that pride will eventually slay every giant.
Charlie Smith is editor and publisher of The Columbian-Progress. Reach him at csmith @columbianprogress.com.
