Economist Ted Bauman Explains Why Amazon Is No Monopoly
The king of the tech industry used to be Steve Jobs. When he died in 2011, he was replaced in this leadership role by Amazon’s Jeff Bezos. Ted Bauman, an economist, recently wrote that Amazon has been hugely successfully under Bezos’ leadership. The one thing that people have wrong about Amazon, though, is that it isn’t a monopoly he said.
Amazon is dominating the online retailing landscape and is now making inroads into the brick and mortar area. A lot of people have said that this company is becoming a monopoly, snuffing out all competition. This isn’t true now, Ted Bauman says, and won’t be true for the foreseeable futures.
Amazon had revenues of $170 billion in 2018. That’s a huge amount of money that is generated not only by its retail sales but also by its other businesses such as its cloud service Amazon Web Services. However, they don’t actually have the majority of online sales. Their sales account for 44 percent of this market. The rest is sold by Walmart, Target, Macys, Kohls, Apple, and others.
And, when you look at the broader economy, you can see that Amazon really isn’t dominating traditional merchants as much as people have been told. Ted Bauman did the math and saw that of all retail sales in the United States less than one-twentieth is done by Amazon. The media likes to focus on how much e-commerce has grown over the years but the truth is traditional stores are still very popular with consumers. Read articles on Forbes about Ted Bauman
Ted Bauman has seen critics of Amazon say that they are destroying multiple industries. However, in most of the areas they conduct business they have viable competitors. Walmart, Target, Kohl’s, Dollar General, Home Depot, and other large competitors are doing just fine and selling products at competitive prices. Specialty companies such as Apple are also doing well.
When Amazon entered the retail grocery business, buying Whole Foods, some “experts” thought that they would dominate the industry. This hasn’t been true and other large grocery chains sell a lot more food than Whole Foods does. Additionally, Whole Foods still isn’t price competitive.