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I Am Not Stalling...Much...

Look: I know I ought to be revising the first chapters of both CHANT and SAND, but I'm taking a little diversion.

Amazon is, to some, the harbinger of the apocalypse. To others, the company is a great resource that yet makes folks uncomfortable with its expansions. What I see, though, is an objective lesson in lemonade production. This isn't about whether Amazon is wonderful or evil; it's about their ability to choose what comes next.

Some months back, I listened to a local talk radio broadcast featuring Indiana business owners. The topic was Amazon, and the business owners' push to require that company to pay state sales tax. That would, according to those men, "level the playing field" and permit local businesses to survive. It would be fair, they argued, because local businesses simply couldn't compete against a company that didn't have to pay state sales taxes.

One of those men--one chosen by his business peers as the best and most knowledgeable representative of their cause--owns a store that provides custom made and fitted dance shoes. His store, he stated, doesn't offer internet sales because his business requires in-person service. He was rather affronted by the whole notion, in fact.

And ensuring Amazon pays state sales tax will improve his business...how, exactly?

Anyway. The group promoted itself on the radio as being all about local and small business. Supporters listed on their webpage included little companies like Walgreens and Walmart. I keep that in mind any time I hear an anti-Amazon argument based on supporting small businesses. The movement requiring Amazon to pay sales tax was primarily funded by turf-protecting corporations.

And they won! Amazon will begin collecting sales tax in Indiana. They'll also open a distribution center in the state--as well as in other states where tax collection deals were made--because states really wanted that extra employment boost. Now the playing field is all leveled out, and the tax fairness folks claim a victory.

Amazon, however, looked at that leveled playing field as a floor, not a ceiling. Since one business advantage has been lost, they've chosen to create another. Since they'll have those local distribution centers, they intend to utilize them by providing same-day local delivery. I think the Slate article overstates the We're Doooooooooomed! aspect, but I'd certainly be concerned were I a local retailer who bought into the notion that sales tax collection would protect me from Amazon's competition.

And after all that babble, here's my point: Businesses put an extraordinary amount of energy into limiting Amazon's advantages. Rather than spend its time trying to keep their advantage, Amazon found a way to turn losing it into an opportunity.

Consider this: CVS, Walgreens and Walmart all have stores in my little town. At any time, those stores could have been thought of as distribution centers. Any one of them could have offered same-day delivery of items I chose to purchase over their website. Hell, they could have offered same-hour delivery. Really, if getting a pizza to my house in less than hour is a successful business model, why can't the same hold true for toilet paper, ballpoint pens, and a jug of apple juice?

In the past, local businesses have treated home delivery as a premium product. Customers paid fees, sometimes high fees in proportion to the goods, because the business didn't really want to do delivery. They maintained the retail store mentality that depends upon enticing you in for one thing, placing that one thing as far from the entry as possible, and upselling you to other items on your way to the check-out line. Every one of them looked at delivery as an undermining of the physical store. Not one considered it could be the means to reducing overhead and expanding the customer base.

Amazon did.

Now, local businesses can either innovate ways to keep their customers, or channel that business-building energy into lobbying for political intervention yet again. Or, as seems to be most popular, spending time equating business agility with unrepentant evil.

 As a self-employed person, the lesson is pretty clear. Success won't happen when I demand my customers conform to what benefits me most. I succeed when I find what most benefits me within what my customers what.



( 2 comments — Leave a comment )
Jul. 14th, 2012 12:43 am (UTC)
Amazon's competitors seem to be taking "You're just jealous!" to a whole new level.

Edited at 2012-07-14 12:43 am (UTC)
Jul. 15th, 2012 11:01 am (UTC)
I'm impressed by the way Amazon turns what "should" be stumbling blocks into steps forward. It's an uncommon mindset.

( 2 comments — Leave a comment )


Blair MacGregor

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