July 12 is Amazon Prime Day, an annual sale for paying members. With just a few clicks, you can get nearly anything, from televisions to toaster ovens, delivered to your doors, with same-day shipping in some instances. Amazon has made shopping more convenient, but costs come with slashed prices and rapid delivery.
The e-commerce giant has fully permeated into everyday society, which makes it hard to avoid, says Kathryn Judge, law professor at Columbia University and author of “Direct: The Rise of the Middleman Economy and the Power of Going to the Source.”
Now many people may start their online shopping experiences via Amazon, so countless small businesses struggle to sell their products elsewhere and must opt to join Amazon, she says.
“The cut that it's taking of every single transaction has increased every year for the past seven years. So on average, when you make a purchase on Amazon, a third of that is going to Amazon and only two-thirds is actually ever reaching the seller of the goods, much less the creator far past that,” she explains.
Judge says Amazon provides a valuable service, but over time, it’s manipulated that power to benefit its bottom line.
“They … contort the law and the evolution of the market to continue to feed their power. So rather than having a healthy change that we'd expect, rather than having innovations that actually result in changes of who the relevant middlemen are, the middlemen find ways to entrench themselves, and really, take a bigger cut and leave both sides a little more disconnected.”
She adds that Amazon has played an indirect role in the global supply chain crisis and rising inflation. That’s because the company has provided access to goods at artificially low prices.
“[Amazon has] helped to feed these long and complex supply chains. [It] resulted in a transformation of how goods are made. It used to be that you actually knew the people behind the clothes that you wore, the food that you ate. Now, it's not even a person that's far away. It's a bunch of different people that are disaggregated around the world. So it also leaves a sense of disconnection and it creates this incredible fragility.”
Judge argues it’s now vital for consumers to critically look at how Amazon does its business and treats its workers. She admits that the company’s employees are treated respectfully when compared to conditions other factory workers endure, but there’s still a long way to go.
“We are so blinded. … There are fundamental values we might have regarding the environment … basic living wage … safety and consumer safety protection. … [But] we don't see the violations that occur. And so it's easier for us to discount them.”
She recommends buying directly from merchants through farmers markets, craft fairs, or personal websites.
“There's always people in places behind the goods that we're consuming, and our actions affect them.”