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Cost of Amazon

A report from economic analysis firm Civic Economics says that sales by Amazon and third-party vendors — in 2018 alone — accounted for up to...

$7000000000
uncollected sales tax

The report also estimates that in just one year Amazon sales displaced the equivalent of...

412000000 sq ft
retail space
 
703000
retail jobs

Cost of Amazon

That lost revenue would have funded public works, public safety, and public education.

Prime Numbers: Amazon and American Communities was commissioned by the American Booksellers Association. The report concludes that despite the convenience Amazon provides, Americans may not comprehend the nature of the trade-off.

Another study, Home Sweet Home: Locals vs. Amazon, demonstrates the significant economic benefit that supporting independent businesses has on local communities. The study, conducted by Civic Economics and commissioned by the North American Retail Hardware Association (NRHA), the Paint and Decorating Retailers Association, and Independent We Stand, specifically compares the impact of conducting business with independent hardware stores versus the sales of hardware and building materials through Amazon. It shows the substantial “local advantage” of indie stores over Amazon in terms of re-circulation of revenue back into the community.

 

Stacy Mitchell on Amazon's Stealth Invasion

Stacy Mitchell is co-director of the Institute for Local Self-Reliance and directs its Independent Business Initiative, which produces research and analysis, and partners with a broad range of allies to design and implement policies to reverse corporate concentration and strengthen local enterprise.

 

Here's What You Just Did

  1. You kept dollars in our economy. An independent bookstore recirculates 28 percent of its money locally, whereas Amazon only recirculates 4 percent.
  2. You embraced what makes us unique. You wouldn’t want your house to look like everyone else’s in the U.S. So why would you want your community to look that way?
  3. You created local jobs. Local businesses are better at creating higher-paying jobs for our neighbors.
  4. You helped the environment. Buying from local businesses conserves fuel for transportation, requires less packaging, and means you get products you know are safe and well-made, because we stand behind them.
  5. You nurtured community. We know you, and you know us. Studies have shown that local businesses donate to community causes at more than twice the rate of chains and online retailers.
  6. You conserved your tax dollars. Shopping in a local business district means less infrastructure, less maintenance, and more money available to beautify our community. Also, spending locally instead of online ensures that your sales taxes are reinvested where they belong—right here in your community!
  7. You created more choice. We pick the items we sell based on what we know you like and want. Local businesses carry a wider array of unique products because we buy for our own individual market.
  8. You took advantage of our expertise. You are our friends and neighbors, and we have a vested interest in knowing how to serve you. We’re passionate about what we do. Why not take advantage of it?
  9. You invested in entrepreneurship. Creativity and entrepreneurship are what the American economy is founded upon. Nurturing local business ensures a strong community.
  10. You made us a destination. The more interesting and unique we are as a community, the more we will attract new neighbors and visitors. This benefits everyone!

 

Here's What Amazon Just Did

  1. In 2018, Amazon and third-party marketplace vendors sold $189 billion of retail goods in the U.S. Since estimates say third-party sellers likely collect and remit only between 14 percent and 33 percent of potential sales taxes to state and local authorities, this resulted in $5.5–$7 billion in uncollected sales taxes.
  2. In 2018, Amazon displaced the equivalent of 62,410 storefronts and a net 412 million square feet of commercial space.
  3. In 2018, by avoiding sales tax and quashing the viability of local bricks-and-mortar retail, Amazon deprived thousands of communities of tax revenue necessary for schools, roads, and police and fire safety, as well as of vibrant downtowns and main streets. 
  4. In 2018, Amazon produced a net loss of 703,000-plus retail jobs nationwide. 
  5. Between 2014 and 2018, Amazon’s sales and operations accounted for a loss of more than $17 billion in sales tax revenue to state and local governments. 
  6. Amazon received the benefits of local subsidies, tax breaks, road improvements, and other government considerations to build its distribution centers, notwithstanding the net loss in jobs, property taxes, and downtown vitality. 
  7. Amazon achieved dominance over the book industry equivalent to Standard Oil’s share of the refined oil market just before it was broken up in 1911.* 
  8. Amazon has cheapened the value of printed and electronic publishing, and dampened opportunities for new authors and diverse ideas, by discounting books to lower than wholesale price and bullying publishers and its marketplace sellers.
  9. Amazon isn’t involved in the communities where most of its customers live.
  10. In 2020, Amazon’s total sales and operations revenue have increased, meaning the above 2018 figures are likely to be understated. 

Sources: Civic Economics, Prime Numbers: Amazon and American Communities, 2018. *Paul Krugman, “Amazon’s Monopsony Is Not O.K.” (New York Times, 2014