Walmart Saves You Money; Amazon Saves You Time


Like most Americans I am fascinated by modern technology as exemplified by the big five American technology companies: Amazon, Apple, Facebook, Google and Microsoft.
The allure of Apple (a telephone merged with a pocket-sized computer), Facebook (a vast social network) and Microsoft (windows operating system and the personal computer) are easy to understand.  Google has accomplished the amazing feat of organizing all human knowledge with its search engine.

Amazon is the most humdrum of the five giants.  It primarily does online retail.  But ecommerce is revolutionizing much of the business world and therefore all aspects of our lives.

  • Retail in America accounts for one in nine jobs.
  • Total retail employment in the U.S. is growing since ecommerce has added far more jobs in the last two years than brick-and-mortar jobs have been lost. Furthermore, fulfillment center wages are 31% higher than for traditional retail in the same geographical area.
  • In 2016 Amazon accounted for more than half of the growth in online spending.
  • More than 1/3 of American households now pay $99 per year for Amazon Prime which provides free two day shipping on all orders.
  • Amazon’s own inventory now accounts for less than half of the sales on its site, i.e. ever more independent retailers use its giant warehouses.
  • Amazon earns more than 1/3 of its revenue from ecommerce outside of North America (but not much in China where Alibaba is king).
  • Amazon now pays sales taxes in every American state which has such a tax.

Conclusion. The giant retailer, Walmart, which has brought Americans low-cost goods from around the world, is now struggling to compete with online retailer Amazon. Walmart saves us money but Amazon saves us time as well as money.  Only a free market system like ours, which goes all out to encourage innovation, could lead to such progress.

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