In 1994, Jeff Bezos founded Amazon.com Inc., which was initially just an online bookstore. But over time, as any major company would in a capitalist economy, Amazon expanded. It grew to include electronics, software, video games, apparel, furniture, food, toys, jewelry and anything else that could be reasonably shipped to people. With Amazon’s expanded inventory, it became a household name and the most convenient way of shopping.
However, it’s important to know the destruction Amazon leaves behind as it continues to expand. It’s convenience and low prices that put other companies out of business. In fact, in 2009, Amazon had a large enough profit that they purposefully took losses in order to put their competitors out of business.
Diapers.com was a new business from parent company Quidsi. They were offering diapers and other baby products on a subscription basis, which appealed to young parents for its convenience. While Diapers.com wasn’t a serious competitor to Amazon, Bezos launched Amazon Mom.
Amazon Mom had a similar concept as Diapers.com except it offered free shipping and priced products so low that Amazon actually took losses from Amazon Mom. But it did the trick. Diapers.com lost customers to Amazon Mom until Quidsi finally surrendered and was bought out by Amazon for $545 million.
Quidsi and Diapers.com weren’t the first companies that Amazon took out and they weren’t the last. They were just one in a list of over 100 companies that Amazon has acquired.
It’s that horrible statistic: over 100 companies acquired by Amazon, that proves that Amazon is dangerous to the free market. It has the power to destroy small businesses and put so many people out of work.
Yes, Amazon is the second-largest employer in the United States, behind Walmart, with 750,000 employees. However, it’s impossible to even estimate how many people are unemployed because of the way Amazon burns through its competitors like a wildfire.
But it gets worse: Amazon reported a $10.8 billion profit in 2018 and the taxes they paid after rebate was -$129 million. What that means is that the United States government gave Amazon $129 million. That’s $129 million that comes from tax-paying families that could have been spent on infrastructure, social security, or literally anything else that the United States government is having trouble funding.
It begs the question: when will Amazon be recognized as what it is—a monopoly—and when will Amazon be held accountable for the destruction of a competitive market?