Is It Right To Shop At Amazon?

Weighing the Pros and Cons of Shopping At Amazon

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Every few months, I find myself questioning whether it is right to buy on Amazon, often in response to a friend who talks about her own uneasy relationship with the company. In this post, I’ll walk through the pros and cons and how I came to the conclusion that I’m sticking with Amazon.[1]

Amazon is big. An estimated 112 million Americans pay up to $119/year for Amazon Prime’s free shipping and streaming video service, spending $1400/year on average on the site.

Our family depends on Amazon and it represents more than 75% of our retail spending. In some (certainly not all) ways, Amazon represents what we wish government would be - competent, customer-friendly, and efficient.[2] More often than not, Amazon’s prices are lower than any competitor’s, particularly when taking various savings and cashback into account.

But plenty of controversy surrounds Amazon. In recent months, they’ve been attacked over their cooperation with government surveillance and law enforcement. Amazon’s relationship with third-party sellers has grown increasingly sketchy.[3] And everyone is aware of ongoing issues over Amazon’s treatment of its warehouse employees. Not many companies have an entire Wikipedia entry cataloguing criticism of the company.

Some argue Amazon isn’t as big or dominant as it seems. In the US, Walmart’s retail business is much bigger. But Walmart does not operate the world’s largest cloud computing provider on which much of the Internet runs, nor does it have Amazon’s global reach or political dominance. And the stock market currently values Amazon at ~$1.3 trillion, almost four times Walmart’s valuation.

Then there’s the concern that Amazon hurts local business. I come from a family of small business owners. Home Depot drove a substantial decline in my family’s hardware business, Staples destroyed my grandparents’ stationery store, and I’m sure you know at least one local business pushed over the edge by competition from Amazon.[4] Companies always have the option to partner with them, but for the privilege they pay hefty commissions generally ranging from 8-15%. I know a couple of people who do quite well selling on Amazon, but most traditional businesses cannot operate profitably while paying Amazon’s commissions on all of their sales.

Despite Amazon’s labor complaints, I’ve been hard-pressed to find any evidence (Indeed.com reviews, starting salaries, benefits, etc) that they are a meaningfully *worse* employer than the average big-box store. And when I considered whether it was wrong to use their grocery service, I found that the pay and benefits for their grocery employees are comparable to or better than the regional competitor we also use. Anecdotally, our only real-world conversation with an Amazon warehouse employee left us with the impression that a warehouse job is extraordinarily physically demanding but pays well compared with comparable jobs, with substantially better benefits. I’m more concerned with Amazon becoming increasingly automated and *less* labor-intensive, resulting in fewer warehouse jobs.

Jeff Bezos, his colorful personal life, $260 swim trunks, and strange physical transformation aside, doesn’t seem like a bad guy, and he’s generally taken a middle-of-the-road approach to philanthropy. His charitable giving has ramped up substantially in recent years, including his February 2020 pledge of $10 billion for climate change-related causes. His $250 million purchase of the Washington Post likely protected one of the most important papers in the world from the aggressive cost-cutting and journalistic hollowing-out that has hit every US newspaper other than the NYT and WSJ. But yes, he really should sign the Giving Pledge (his ex-wife has).

Am I concerned about Amazon’s dominance of cloud computing, and their embrace of law enforcement and military applications? Yes. But there is actually something reassuring about these things being under the same roof as a customer-facing retailer with an owner who has been sensitive to popular opinion. I’d rather Amazon take the lead in law enforcement and defense applications than Palantir (Peter Thiel, eesh) or Clearview AI. And in cloud computing, Microsoft and Google (among others) are aggressively marketing their products and investing billions to take on Amazon. Many of the worst abuses of privacy occur at the hands of small, privately-held companies unaccountable to public shareholders or public opinion. And retailers in financial distress, which Amazon is not, are much more often tempted to monetize their customers’ personal information.

In isolation, there is plenty to dislike about Amazon. But there’s little evidence they are an objectively worse actor than their competitors, and in most places it is simply not practical to buy most household staples other than from a big box store or Amazon.

Of course, you may come to a different conclusion and reduce or eliminate your use of Amazon, but if you continue shopping there, make sure to save as much money as possible!

I hope this has been helpful. If you liked it, please share it with a friend! Also, I’d love to hear where you stand on these issues.

[1] Full disclosure - this post is not an advertisement! I don’t make money from this newsletter via ads, affiliate links, or anything else, and I am not paid by any company mentioned in an email.

[2] “[I]t’s hard not to pine for a technocratic alternative, to yearn for a utopia of competence and rules . . . Bezos builds things that function as promised”

[3] I try to be careful that any item I am buying “Ships from and sold by Amazon.com.” (check the product page for this text) or that the third party seller has very good feedback. But even this safeguard is not perfect because Amazon allegedly commingles its inventory with that of third-party sellers.

[4] Though, interestingly, the stats I found show independent bookstores growing steadily over the past decade. Likely because a hybrid model of bookstore plus “something else” (usually a coffee shop) has become increasingly popular.