Many experts are sure that Amazon is set to control at least 50% of the online commerce market within the next 36 months. Critics will point to Amazon’s growth into such a wide variety of industries, ranging from batteries to washer and drier sets, and its competitive prices against big box stores such as Home Depot, Wal-Mart, and Target.
Most Americans typically hold opinions about Amazon on the positive side, and rival merchants at least hold back from claiming that the online retail giant is utilizing tactics that could be deemed anti-competitive. Economists that follow these unfoldings so much to write about them, such as Ted Bauman, have very detailed opinions on these types of subject matter.
Ted Bauman is an economist and editor of his own 100,000+ subscriber publication; however, he is the type to spend his days focusing on the critical investment and financial issues for his readers. His wider perspective is likely due to his insights in market developments and his work as not a typical stock analyst, but a modern economist.
Ted Bauman will tell you the opposite of some of the buzz you may have been hearing around Amazon. Bauman not only claims that Amazon cannot be defined as a monopoly, but he even warns those of his readers who hold shares in Amazon of potential vulnerability.
Many of those who hold strong views on Amazon compare it to the original Sears catalog, based on the new experience for the consumer and the before unheard-of variety of goods to purchase in one place. Instant gratification is an important commodity for American shoppers, which is why almost half of products ordered online by Americans are sold by Amazon. With numbers already this high and growing to potentially above 50%, some experts believe Amazon should be broken down or restrained; however, Bauman argues that the revenue of Wal-Mart is roughly three times higher.
While Amazon holds up its share of ecommerce purchasing, the online giant still has plenty of brick and mortar competitors to keep it from becoming a true monopoly. In addition, Ted Bauman mentions the negative connotation that one usually finds with a true monopolistic firm, such as poor customer service that inflated prices that show a blatant disregard to its consumers (because monopolies can), that you do not find with Amazon.
As an expert, Ted Bauman believes we don’t need to worry about Amazon becoming a controlling monopoly; however, we may need to worry about other issues such as unfair business practices or data security. As smart consumers in this economy, shareholders or otherwise, these are all relevant issues to any individual.
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