• Latest
  • Trending
The Amazon Effect on the Economy in USA

The Amazon Effect on the Economy in USA

February 3, 2023
Empowering Muslim Women: Stories of Leadership and Resilience

Empowering Muslim Women: Stories of Leadership and Resilience

August 30, 2023
Remarkable Insights into Islam's Rich Diversity

7 Remarkable Insights into Islam’s Rich Diversity: Unraveling the Mesmerizing Tapestry of Faith

August 30, 2023
Al Taawoun Outperforms Ronaldo’s Al Nassr in Recent Saudi Pro League Clash

Al Taawoun Outperforms Ronaldo’s Al Nassr in Recent Saudi Pro League Clash

August 19, 2023
Oliver Anthony's "Rich Men North of Richmond": A Deep Dive into America's Musical Phenomenon Amidst Socio-Political Tensions

Oliver Anthony’s “Rich Men North of Richmond”: America’s New Viral Sensation

August 19, 2023
The Enigmatic Jinn

The Enigmatic Jinn: From Childhood Fears to Adult Fantasies

August 18, 2023
A Grandmother's Encounter with Jinns Inspires a Legacy of Fearlessness

Unyielding Courage: A Grandmother’s Encounter with Jinns Inspires a Legacy of Fearlessness

June 25, 2023
Mbappe

Mbappe Informs Paris Saint-Germain of Contract Decision, Club Contemplates Sale

June 13, 2023
Lockport caves

Tragedy Strikes Lockport Caves: A Dark Day for Underground Tours

June 13, 2023
student loan bill

Empowering Nigerian Students: Unveiling the Transformative Student Loan Bill

June 13, 2023
anthrax disease

Unmasking Anthrax Disease: A Comprehensive Guide to the Deadly Disease

June 12, 2023
sihr in Islam

Sihr in Islam : Unveiling the Definition, Significance, and Consequences

June 4, 2023
25 Halal Ways to Make Money Online: From Freelancing to E-commerce and More

25 Halal Ways to Make Money Online: From Freelancing to E-commerce and More

April 17, 2023
Saturday, September 23, 2023
  • About
  • Advertise
  • Privacy Policy
  • Contact Muslim-news.com
M-NEWS
  • News Today
  • Muslim Lifestyle
    • Evidence Islam is Truth
    • Fatwa
    • Etiquettes
  • Education
    • Local Scholarships
    • International Scholarships
  • Islamic Stories
    • Stories
  • Login
No Result
View All Result
M-NEWS
Home Marketing

The Amazon Effect on the Economy in USA

Amazon.com can be found everywhere. By disrupting the way people shop, Amazon has created economic ripple effects that go far beyond the customer’s wallet. Amazo impacts inflation, jobs, and investment, directly and indirectly.

Soltechblog by Soltechblog
February 3, 2023
in Marketing, Video
0 0
0
0
SHARES
1
VIEWS
Share on FacebookShare on Twitter

The Amazon Effect on the Economy: Amazon started with books and then added everything from techs to mobile phone accessories until it became “the everything store.” Add the convenience of having it delivered promptly to your doorstep, and customers have rewarded Amazon with open wallets.

According to Digital Commerce 360, Amazon’s revenue from U.S. consumers’ web purchases amounted to 30.7% of U.S. online retail sales in the first quarter of 2021.1 In 2020, e-commerce spiked to account for approximately 21.3% of U.S. retail sales, meaning Amazon accounted for about 6.5% of all retail spending.2 This huge increase can be attributed to the surge in online shopping as a result of the global pandemic due to the novel COVID-19 virus.

Related posts

But Who Wants To Work?

But Who Wants To Work?

February 5, 2023
The Roadside Stand Honey Sales

The Roadside Stand Honey Sales

February 5, 2023

If you consider the macro picture, consumers spending more is a good sign because it contributes to the GDP. That being said, consumer spending on Amazon is not significant enough to tip the GDP scale. However, it could be in the future.

How Amazon Eliminates Inflation

Amazon has disrupted traditional retail and accelerated the demise of struggling players. Without storefronts, the company’s overhead costs are significantly lower than other retailers out there. That gives it the edge to undercut rivals on prices and operates on a thinner profit margin.

Some economy watchers are worried about Amazon’s deflationary impact. Ideally, low unemployment is accompanied by wage growth, which in turn fuels inflation as companies pass on the costs to consumers. That is the logic of the Phillips curve, but Amazon has disrupted it as well.

Greater competition and lower prices can limit the ability of companies to pass on any wage increases to consumers. Those worries were echoed in the wake of the Whole Foods acquisition in 2017.4 Chicago Federal Reserve President Charles Evans noted that mega-mergers can put downward pressure on inflation.

Work vacancies at Amazon

By the end of 2021, Amazon employed approximately 1.5 million employees worldwide.  between 2020/2021 alone, the company added more than 400,000 jobs.  That includes both full-time and part-time employees. Although over one million seems like a large number, it is actually low by retail industry standards because Amazon does not have a significant storefront presence. A traditional store requires far more employees. For example, Walmart employs approximately 2.3 million people worldwide.

Amazon also engages several third-party contractors and companies for tasks like deliveries. Those people go door-to-door, dropping off Amazon packages. However, they are not employees of the company.

In a way, these are jobs for people. Therefore, some credit could go to Amazon for job creation. On the other hand, hiring contractual workers helps the company keep its costs in check. Some have criticized the company for harsh working conditions.

Another angle of the jobs conversation is how many jobs Amazon is eliminating. Consider how much the company is hurting other retailers, forcing them to shutter stores and cut back on costs. Job gains at Amazon may not mean anything for overall employment.

The company came under fire from Sen. Bernie Sanders. He introduced a bill, Stop Bad Employers by Zeroing Out Subsidies, or the Stop BEZOS Act, in Sept. 2018. He proposed levying taxes on large companies to the extent that their employees relied on public benefits. Sanders had attacked Amazon and founder Jeff Bezos on account of worker pay and worker safety conditions. In response, Amazon raised its minimum wage to $15 per hour, on November 1, 2018, much higher than the federal minimum wage of $7.25 per hour.

Amazon’s quest for innovation and technology to achieve operational efficiency has people worried about the elimination of jobs. Those worries are not far-fetched considering that the company has introduced cashier-less Amazon Go stores in several large U.S. cities.

Amazon Facilitates Small Businesses

Amazon’s logistics infrastructure doesn’t just do the shipping across the globe; it also aids another group of people: small businesses. Listing their products on Amazon helps them increase their customer reach, and the delivery essentially becomes Amazon’s headache.

“More than 1.9 million small and medium-sized businesses sell in our store, and they make up close to 60% of our retail sales,” the company said in its 2020 letter to shareholders.

As small businesses thrive, further job creation and spending are bound to happen. According to Amazon, 1.1 million jobs have been created outside of the company as a result of the Amazon Marketplace.

Amazon as a Taxpayer

Amazon does pay taxes, but it pays far less than some people believe that it should. For 2020, Amazon’s effective income tax rate was 9.4%—versus the 21% statutory corporate tax rate. The company paid $1.8 billion in federal income tax on $20 billion in profits—versus the $4.1 billion that Amazon would have paid with the 21% tax rate.

Amazon saves billions on taxes using tax credits and stock option tax breaks. Over the three-year period, 2018 to 2020, Amazon paid an effective federal tax rate of 4.3% on income in the U.S. Longer-term, Amazon has been just as good at avoiding taxes, with an average effective federal tax rate of 4.7% over the last 10 years.

Amazon is structured to minimize corporate income taxes. The company reinvests profits into expanding its business instead. While some joke that this policy makes Amazon the largest nonprofit organization in America, reinvestment leads to increased market share and capital gains. Amazon’s lower tax bill helps the company to expand, and expansion helps Amazon to reduce its taxes.

Not having a physical presence or employees in many states also saved Amazon from having to collect sales tax. Sales tax is a complicated subject with rates and rules varying across states. The most straightforward explanation in this context is that tax laws in many states need the physical presence of an online retailer in the state to collect sales tax. Therefore, Amazon saved on tax by not having its own warehouses or employees in certain states.

The problem was not specific to Amazon, however, as it applied to any online retailer shipping goods across state lines. As time passed, Amazon started collecting sales tax on all products that were sold in or delivered to states that have such a tax.

Investing in Amazon

Amazon became the second trillion-dollar company by market cap on September 4, 2018. As of Jan 2022, it holds third place behind Apple and Microsoft, boasting a $1.875 trillion market cap.15 Another milestone, in July 2020, the company crossed the $3,000 mark for its share price, which has been steadily increasing since.16 Amazon’s founder and executive chair, Jeff Bezos, is frequently the wealthiest person in the world, depending on current market prices.17

The multi-year run for Amazon shares has been phenomenal. The company made its stock market debut in 1997, and $100 invested then would have turned into six figures. Amazon has significantly outperformed the S&P 500 over the last several decades, but it has been a rocky road at times. In particular, Amazon lost more than 90% of its value when the dot-com bubble crashed.18

Here, past returns are clearly not indicative of future results. Amazon’s strong performance during the 2020 bear market is a sign that the company is maturing. The thousandfold return available to early investors in Amazon simply cannot be repeated. Without hyperinflation, a trillion-dollar company will never be worth a quadrillion dollars because that is more than the combined value of every stock market in the world.

Tags: amazoneconomic growth
Previous Post

Europe: Brussels aims to coordinate gas purchases in bid to lower costs

Next Post

10 Factors That Can Destroy Your Relationships

Next Post
10 Factors That Can Destroy Your Relationships

10 Factors That Can Destroy Your Relationships

Please login to join discussion

RECOMMENDED NEWS

Old Faces: As Taliban Announces New Afghanistan Government Members

2 years ago
muslim

Trust as the action of the heart

2 years ago

Islamic State Group is Smuggling Boys From al-Hol to Desert Training Camps

2 years ago
Online ‘auction’ is latest attack on muslim women – India and others fear

Online ‘auction’ is latest attack on muslim women – India and others fear

2 years ago

FOLLOW US

BROWSE BY CATEGORIES

  • Education
  • Electrical
  • Entertainment
  • Etiquettes
  • Evidence Islam is Truth
  • Fatwa
  • Finance
  • Government
  • Hadith
  • Health
  • How To
  • International Scholarships
  • Islamic Apps
  • Islamic Stories
  • Leisure
  • Lifestyle
  • Local Scholarships
  • Luxury Goods
  • Marketing
  • Marriage Resolution
  • Muslim Lifestyle
  • News
  • News Today
  • Opinion
  • Politics
  • Property
  • Relationship Request
  • Religion
  • Sport
  • Stories
  • Tech
  • Video

BROWSE BY TOPICS

actions of the heart afghanistan Allah Ansar Bee Keeping Blog breaking news Digital Marketing Eid Ul Ad'ha existense of Allah fatwa God Exists human right indian infection Iran islam islamic marriage islamic story Israeli maktab muslim Muslim Women My journey to islam Pakistan Palestinian Prayer Prayer time Prophet Moosa prophet muhammad quran Raise Righteous Children ramadan ramadan 2021 Sahaabah Saudi Arabia Save Your Soul Scholarships Shari'ah Shaytaan’s Hostility Staying Healthy Story of Prophet Ibraheem Taliban terrorism Virtues

POPULAR NEWS

  • What is Tawheed If it does not only mean acknowledging the existence of Allah?

    13 Quotes On Self Discipline From Prophet Muhammad (PBUH)

    0 shares
    Share 0 Tweet 0
  • 7 Must-Know Lessons Derived From Surat Al-‘Asr

    0 shares
    Share 0 Tweet 0
  • The Killing Of Abul-Bakhtari Ibn Hisham: The Man Who Didn’t Abandon His Friend At The Time Of Death

    0 shares
    Share 0 Tweet 0
  • Etiquette Of Pregnancy In Islam

    0 shares
    Share 0 Tweet 0
  • Where Should A Muslim Take His Creed And Faith?

    0 shares
    Share 0 Tweet 0
Facebook Twitter Youtube RSS

We give you mouth watering news updates and educative contents

Follow us on social media:

Recent News

  • Empowering Muslim Women: Stories of Leadership and Resilience
  • 7 Remarkable Insights into Islam’s Rich Diversity: Unraveling the Mesmerizing Tapestry of Faith
  • Al Taawoun Outperforms Ronaldo’s Al Nassr in Recent Saudi Pro League Clash

Category

  • Education
  • Electrical
  • Entertainment
  • Etiquettes
  • Evidence Islam is Truth
  • Fatwa
  • Finance
  • Government
  • Hadith
  • Health
  • How To
  • International Scholarships
  • Islamic Apps
  • Islamic Stories
  • Leisure
  • Lifestyle
  • Local Scholarships
  • Luxury Goods
  • Marketing
  • Marriage Resolution
  • Muslim Lifestyle
  • News
  • News Today
  • Opinion
  • Politics
  • Property
  • Relationship Request
  • Religion
  • Sport
  • Stories
  • Tech
  • Video
No Result
View All Result
  • News Today
  • Muslim Lifestyle
    • Evidence Islam is Truth
    • Fatwa
    • Etiquettes
  • Education
    • Local Scholarships
    • International Scholarships
  • Islamic Stories
    • Stories

© 2023 Muslim News - Designed by Solitech Concept.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist