Amazon Local Register: Who Does it Really Hurt?
What will come of the Amazon Local Register? We can’t say yet, but one thing is for sure. They’re hurting local businesses more than they’re helping them.
The internet is buzzing and retailers and POS providers alike are curious: what will come of the Amazon Local Register? At first glance it would seem that Amazon, famous for undercutting competitor pricing by operating at razor-thin margins, is a looming threat to companies like Bindo… but I’m not so sure. In fact, I think that Amazon’s newest venture poses more of a threat to the culture of Mom & Pop stores than to us, its competitors. Here’s 3 reasons why:
1. A (Literal) Foot in the Door?
Despite lucrative profit margins in recent years, Amazon has been operating at a loss, funneling millions of dollars into new ventures to expand their domain. Already sitting at 14% of total U.S. e-commerce as of 2013, Amazon has methodically driven sales away from local shops as customers flock online to vet and purchase their items. Now, on top of that, they are gunning for entry into physical storefronts? It would appear that the Amazon Local Register offers them just that foot in. Quite ironically, the more that retailers buy into the Amazon Local Register, the more firm their grip on the offline becomes. With a top spot in online retail and now a potential foothold in the very stores that they threaten, it would appear that Amazon is poised to seize even more of the consumer market, right? Not quite.
2. Price is Not the Bottom-line
As in most of Amazon’s departments, price is the focus of competition—not quality. Upon creating an Amazon Local Register account, business owners must purchase the card reader for $10 and download the free mobile app. After that, if business owners sign up by Oct. 31, only 1.75% will be taken as Amazon’s fee for each payment processed until the end of 2015. Alternatively, 2.5% per swipe will be the default, compared to the 2.75% for Square or 2.7% for PayPal. “I’ve actually heard some business owners say the only thing that would make them change [POS] systems is cost savings,” claims Matt Swann, Amazon VP of Local Commerce.
But the true spirit of running a business is what Amazon has forgotten. Providing small business owners with the tools of success requires more than saving them a few dollars a month—it requires expertise in the field, friendly and available customer service agents, and a group of folks who are passionate about what they do. Redistributing Amazon call center responders to the new Local Register division is not the solution. These service representatives are neither well-versed in nor passionate about their new roles. The Local Register competitors like Bindo only bring on folks who are a good fit and care about making small businesses flourish—this is where Amazon falls drastically short.
3. What Happened to Originality?
From Amazon’s delivery service drones, barcode-scanning pens, and the Kindle e-book reader to an e-marketplace, digital wallet service, newly-released cell phone, and now the Amazon Local Register, I wonder: is Amazon concerned more with quantity and reach than quality and service? That is, is a headlong rush for market share better than paying attention to the needs of the business owner?
At Bindo, we recognize the true spirit of business because, well, we are driven by it! Whether through the occasional finger sprain from intense rounds of customer service email responses or in our bright-eyed interns as they witness our fearless leader, Brad navigate even the smallest customer snafu, it’s evident to all: we love what we do. I am more than unimpressed, but disappointed by the “spirit” behind Amazon’s newest venture. What happened to the spirit that inspired an elementary school principal to turn wine connoisseur? A professional sculpture to become a soap-designer? An IT Executive to turn soccer-apparel guru? Here’s the bottom-line: The culture that led to the Amazon Local Register is encroaching on the spirit of Mom & Pop businesses and what it means to work for what you love.