Via AlterNet: Hold the Applause for Amazon.com
The “revolutionary” company lost billions of dollars — an average of $376 million annually during its first eight years — yet it kept enticing speculators to pump more money into the company’s stock. Amazon’s speculation-fueled growth contributed to the net loss of more than 2,000 independent book and music sellers during its first decade.
Unlike its independent competitors, Amazon operated in the casino economy of the stock market, not the world of market competition. Amazon accounts for only about seven percent of overall U.S. book sales, but in combination with the proliferation of book chains and mass discounters, its growth hurt independents substantially.
Investors traded paper profits with the real life profits of all the independants. Hey, I owned Amazon stock back in the day too.
The American Booksellers Association (ABA), the major trade group of independent bookstores, saw its membership sliced nearly in half during Amazon’s first decade (independents’ market share for new books has now stabilized, at about 10 percent). While Amazon operated a legitimized Ponzi scheme for years, it was and still is subsidized by federal law.
OK, that may be more than a little left leaning, but its an intersting thought, ‘legitimized Ponzi scheme’. I used to do those chain letter schemes when I was a kid (until I got a cease and desist from the Postmaster at age 13).
We should keep all this in mind when choosing where to purchase books — there’s a hidden cost to those discounts from Amazon. But we should be engaging as citizens, not just consumers, to maintain a rich diversity of choices and ensure our children have the opportunity to be entrepreneurs, not just wage workers for Corporate America.
Grain of salt true, but we could support our local booksellers more.
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