Globalism is knocking on our door, and we are ready to welcome it in with open arms. The big five FAANG (Facebook, Apple, Amazon, Netflix, Google), are ready to take over the open market. Today I will focus on Amazon, because their domination and the insane wealth of the company is well above others. More and more global companies will follow the principle of Amazon and the big five. I want to touch on why, this is bad for us consumers and the open market.
Domination of the open market
I don’t have to talk much about the acquisitions all of those companies made over the years, many of them in secret.
Here are Amazon’s biggest acquisitions ranked by cost value:
- Whole Foods: 2017, Food and Beverage, Grocery and Organic Food, for $13.7 billion
- Metro-Goldwyn-Mayer: 2021, Media Production and Film, for $8.5 billion
- Zoox: 2020, Autonomous Vehicles, Robotics and Transportation, for $1.2 billion
- Zappos: 2009, E-Commerce, Retail and Shoes, for $1.2 billion
- Ring: 2018, Home Security and Smart Home, for $970 million
- Twitch: 2014, Social Media, Video, Video Games and Video Streaming, for $970 million
- Kiva Systems: 2012, Hardware, Mobile, Robotics and Software, for $775 million
- PillPack: 2018, Pharmacy and E-Commerce, for $753 million
- Souq.com: 2017, Consumer Electronics, E-Commerce and Shopping, for $580 million
- Quidsi: 2010, Beauty, Child Care and E-Commerce, for $545 million
Whole Foods is by far the biggest purchase, and it should worry us. Expect Amazon starting to push heavily on selling groceries online. The pattern you can notice with its acquisitions is they want to dominate every market globally. You have all the categories you need: Food, Media, Transport, Clothing, Security, Hardware, Pharmacy, Beauty products.
I read this in an article about Amazon. Let’s say you sell diapers online, they are of good quality and people love to buy them. Amazon reaches out to you and makes you an offer to buy off your company. You as the owner don’t want to sell, so you turn their offer down. Now Amazon goes and intentionally lowers the prices of their diapers, so your company slowly bleeds out of profits. We live in a market where the price dictates everything, especially with products that you use and buy in bulk. They can afford to do it, since they have large capital. Down the road, the company is forced to sell.
Is this predatory competition fair? No, it’s bad for the open market and every potential small company that wants to offer something new or innovate. This will happen more and more down the line in the future, Amazon just started it.
That’s why I don’t buy from Amazon, only if I really have to. We the people are the most at fault, we buy all the time from Amazon because it’s so convenient. We should support our local companies more because at the end, healthy competition and an open market is the best for us consumers.
The future for us consumers
As I stated above, more and more companies will adopt this predatory behavior. Apple is doing it with the wireless chargers, separate adapters, fusing the battery into the phone, so you can’t change it. Samsung and other companies are doing the exact same thing, because they look at the profits Apple makes and gets away with it. The fault is entirely on us consumers, because we still buy the phones, the extra adapters etc.
We need to appreciate attributes like quality, repairability, sustainability in a product. These attributes don’t come with a low price tag, today people want good quality for a cheap price. These two attributes are generally polar opposites, you can have either a quality product or a cheap product.
If we don’t change our spending habits, we will get more and more products that are not meant to last, quality will start to have an even bigger premium price that it has now. Another problem that will come is lack of choice, there will be no competition on the market.
First lets define what is a monopoly:
A situation in which a single company or group owns all or nearly all of the market for a given type of product or service.
A company can become a monopoly in many ways, the most common ways are:
- Intellectual property rights (Microsoft)
- Hoarding a scarce resource (Oil, Rockefellers)
- Buying up competition (Amazon)
- Easiest of them all is Government granting exclusive rights to provide goods and services (American Tobacco)
The bad side is, the monopoly dictates the prices of the market, if you are not satisfied with the service, you can’t complain because we are the only ones that offer it.
Again the fault is on us, we need to change our spending habits and consider other things, when we decide to purchase a new product. Things as quality, the company(do they have a good working environment), service…
The clock is ticking, it will be very hard to regulate a company like Amazon that dominates the entire market, and buys all the competition up.