TechDigits

Tech news
Thursday, Apr 18, 2024

Mnuchin is wrong: Amazon has done more good than bad for small business

Mnuchin is wrong: Amazon has done more good than bad for small business

The treasury secretary said Amazon ‘destroyed the retail industry’ – but Amazon has created businesses, side hustles, development and content design opportunities for more than 1.9m small businesses and entrepreneurs around the world who, in turn, have created more than 1.6m jobs in the process. The company has created a special site just for people to buy from small businesses and another one to help aspiring entrepreneurs become partners and merchants. More than half the items sold on their site is sold by a small- or medium-sized company, and countless other consultants, technology companies, logistics firms, warehousing landlords and other small businesses have created their livelihoods on Amazon’s back.

Take a walk today down New York City’s Seventh Avenue – or any Main Street in small-town America – and you’ll see that things look a lot different than they did 40 or even 20 years ago.

Back then there were lots of retail stores selling shoes, clothes, sporting equipment and books. Today … not so much. The malls are empty, name-brand chains have shut down and storefronts are more or less occupied by “experience” businesses – restaurants, coffee shops, bars, exercise places or nail salons. Where did retail go? Has it been destroyed? And did Amazon cause all of this?

Yes, Amazon caused a lot of it. In fact, the e-commerce giant changed retail forever. But it’s not all bad news – particularly for small businesses.

Steve Mnuchin doesn’t feel this way. In an interview with CNBC this week, the treasury secretary (and former Sears board member) said that Amazon has “destroyed the retail industry across the United States”. He also said that “no question they’ve limited competition. People had those concerns about Walmart, but Walmart developed a business where small business could continue to compete with them.”

Mnuchin knows a lot more about a lot of things than me. I would never debate him on tax policy, the federal debt ceiling or anything to do with the US government’s finances. But, with all due respect, small business is my turf, not his. And when it comes to small business I do feel comfortable saying this: Amazon is not hurting small businesses. It is actually quite the opposite.

I’m not an employee at Amazon, and although my firm has done some marketing work for the company over the past few years I am not an Amazon merchant or partner. I just know a lot about small businesses because I run one and I write about them. And when it comes to small businesses, Amazon has done way more good than bad.

The company has created businesses, side hustles, development and content design opportunities for more than 1.9m small businesses and entrepreneurs around the world who, in turn, have created more than 1.6m jobs in the process. The company has created a special site just for people to buy from small businesses and another one to help aspiring entrepreneurs become partners and merchants. More than half the items sold on their site is sold by a small- or medium-sized company, and countless other consultants, technology companies, logistics firms, warehousing landlords and other small businesses have created their livelihoods on Amazon’s back.

You’re not seeing these people on Main Street anymore, but trust me, they’re still out there … and in droves. They’re selling to customers they could never dreamed of, reaching and sourcing products from suppliers in faraway places, and doing this all from the comfort of their homes or from spaces that cost a helluva lot less than rent on Seventh Avenue.

“Amazon is the first partner that offers small businesses a legitimate way to compete with the big retailers – which is why they are scared, and why they are sounding the alarm that it’s ‘killing retail’,” Jerry Kozak, the owner of Ann Arbor T-shirt Company and an Amazon merchant, told me. “Amazon is changing retail by offering more products from more merchants, at greater convenience – and people are voting with their wallets.”

Kozak, who employs 75 people at his $20m a year business, isn’t alone in his support of the online platform. Many other business owners I know agree with him.

And by the way, Amazon isn’t the only game in town. E-commerce applications that allow small businesses to sell from their own websites such as Shopify, BigCommerce and Magento have exploded in popularity over the past few years. Etsy, eBay and other online marketplaces have attracted countless small businesses to sell and Chinese giant Alibaba just announced this week new tools particularly for small businesses that make up part of its strategy to grow in the American market. Small businesses have plenty of choices to sell their wares other than Amazon.

And sell they do. On Amazon’s Prime Day alone, small- and medium-sized companies sold more than $2bn of products, a 33% increase over last year. The other platforms have also helped small businesses generate billions in revenues.

“What Amazon has actually done is democratize retail and leveled the playing field so that independent brands and small businesses can enter the market and thrive,” Kristin Rae, an Amazon merchant who owns Inspire Travel Luggage, said. “Truly, I wouldn’t be able to be a business without Amazon.”

Yes, retail has undergone an enormous change, and Amazon has been a big part of that. But the smart entrepreneurs I know – like Kozak and Rae – understand something that some slow-reacting retailers, disconnected politicians and yes, even a treasury secretary hasn’t: it’s 2019 and not 1979. They’re profiting, and good for them.

Newsletter

Related Articles

TechDigits
0:00
0:00
Close
FTX's Bankman-Fried headed for jail after judge revokes bail
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Musk announces Twitter name and logo change to X.com
The future of sports
TikTok Takes On Spotify And Apple, Launches Own Music Service
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Poor Man With Money, Mark Zuckerberg, Unveils Twitter Replica with Heavy-Handed Censorship: A New Low in Innovation?
The Double-Edged Sword of AI: AI is linked to layoffs in industry that created it
US Sanctions on China's Chip Industry Backfire, Prompting Self-Inflicted Blowback
Meta Copy Twitter with New App, Threads
BlackRock Bitcoin ETF Application Refiled, Naming Coinbase as ‘Surveillance-Sharing’ Partner
UK Crypto and Stablecoin Regulations Become Law as Royal Assent is Granted
A Delaware city wants to let businesses vote in its elections
Alef Aeronautics Achieves Historic Milestone with Flight Certification for World's First Flying Car
Google Blocked Access to Canadian News in Response to New Legislation
French Politicians Advocate for Pan-European Regulation on Social Media Influencers
Melinda French Gates Advocates for Increased Female Representation in AI to Prevent Bias
Snapchat+ gains 4 million paying subscribers in its first year
Apple Makes History as the First Public Company Valued at $3 Trillion
Elon Musk Implements Twitter Limits to Tackle Data Scraping, but Faces Criticism for Technical Misunderstanding
EU and UK's Slow Electric Vehicle Adoption Raises Questions About the Transition to Green Mobility
Top Companies Express Concerns Over Europe's Proposed AI Law, Citing Competitiveness and Investment Risks
Meta Unveils Insights on AI Usage in Facebook and Instagram, Amid Growing Calls for Transparency
Crypto Scams Against Seniors Soar by 78% in 2022, Experts Urge Vigilance
The End of an Era: National Geographic Dismisses Last of Its Staff Writers
Shield Your Wallet: The Perils of Wireless Credit Card Theft
Harvard Scientist Who Studies Honesty Accused Of Data Fraud, Put On Leave
Putting an End to the Subscription Snare: The Battle Against Unwitting Commitments
The Legal Perils of AI: Lawyer Faces Sanctions for Relying on Fictional Cases Generated by Chatbot
ChatGPT’s "Grandma Exploit": Ingenious Hack Exposes Loophole in AI, Generates Free Software Codes
The Disney Downturn: A Near Billion-Dollar Box Office Blow for the House of Mouse
A Digital Showdown: Canada Challenges Tech Giants with The Online News Act, Meta Strikes Back
Distress in the Depths: Submersible and Passengers Missing in Titanic Wreckage Expedition
Mark Zuckerberg stealing another idea: Twitter
European Union's AI Regulations Risk Self-Sabotage, Cautions smart and brave Venture Capitalist Joe Lonsdale
Nvidia GPUs are so hard to get that rich venture capitalists are buying them for the startups they invest in
Chinese car exports surge
Reddit Blackout: Thousands of Communities Protest "Ludicrous" Pricing Changes
Nvidia Joins Tech Giants as First Chipmaker to Reach $1 Trillion Valuation
AI ‘extinction’ should be same priority as nuclear war – experts
×