Here's what Trump has wrong about Amazon
Throughout his campaign, Donald Trump has waged a war against Amazon and its owner, Jeff Bezos.
Trump accused Bezos of using the Washington Post, which he owns, "like a toy" to protect his so-called "monopoly," so politicians "don't tax Amazon like they should be taxed" in an interview with Sean Hannity in May.
But the president-elect may be targeting the wrong beast.
For starters, many have pointed out that Amazon has a number of e-commerce competitors, like Jet.com, eBay and the growing Alibaba, to name a few. It may be the largest marketplace for consumer goods -- but it is a marketplace.
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In fact, by going after Amazon, Trump might actually be doing harm to scores of small businesses, which he actually has vowed to protect.
"One thing he doesn't yet realize about Amazon -- and I think it will change his thinking about Amazon when it comes to it -- is Amazon is not one large company. On the outside, it's like that, but on the inside, it's not one big bad company; it's 3 million marketplace resellers, and 3 million small businesses that constitute the bulk of Amazon's revenue," Fred Dimyan, co-founder of Potoo Marketing, told AOL Finance.
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Regardless of whether Trump eases up on Amazon, considering the vast majority of products on Amazon are manufactured in China, third party vendors and small businesses will likely still see an impact in coming years dependent on the president-elect's actions in office.
"The cost of manufacturing in the United States is not slightly higher than manufacturing in China, it's significantly higher than manufacturing in China, so I would expect if there are more tax or importing regulations put on, higher prices will be passed directly on to consumers -- not just on Amazon but everywhere," Dimyan said.
Consumers are expected to absorb the extra costs, though, so Dimyan doesn't expect e-commerce or retail to take a huge hit by an increase in prices.
"They have no choice -- they have to buy a certain amount of goods and e-commerce isn't a fad. Ecommerce is a long-term macro-trend. Whether it's Amazon or something else, people are just going to love sitting home shopping and getting stuff delivered to them next day," he said.
That's not say he's already done his fair share of damage, albeit indirectly.
The 2016 election took its toll on the retail industry, but on the consumer side, it was less about uncertainty and volatility, like we saw in the markets. Dimyan, whose company managers third party websites for manufacturers on Amazon, says it actually came down to screen time.
"We did see an increase during the peak of the election time with online buying, and this was across the vast majority of our clients. People are looking at their TVs or following updates on their Facebook or the internet, versus actually shopping on Amazon," he said.
By: Chelsea Huang
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