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WITH A WHOLESALE switch from bricks-and-mortar retail to online shopping accelerated by Covid-19, internet behemoths like Amazon have been among the big winners over the past 16 months.
While we’ve all been stuck at home, some of us have been lucky enough to have disposable income, but nowhere to spend it. A one-click purchase and a package swiftly delivered to your door can be quick thrill, a small luxury, or sometimes even an urgent need.
Amazon is not the only thing that’s been taking off in a rocket. Jeff Bezos, Amazon’s founder, world’s richest man, and plausible Lex Luthor super-villain impersonator has boarded a manned space flight this afternoon, travelling to the edge of space for approximately 11 minutes on the first manned space flight of Blue Origin, his hobbyhorse outfit aiming to bring space tourism to the masses – well, more accurately, to the super rich.
‘What´s the harm?’, you might wonder, if an innovating entrepreneur gets filthy rich by providing a service that keeps consumers coming back for more. For good or ill, Amazon has revolutionised retail. Even if you don’t use it to buy stuff, it’s often useful to browse and compare prices. We have information at our fingertips that previous generations could only dream of. Arguably, the rise of the internet – as well as cheaper imports from Asia – has helped keep a lid on price increases for all manner of goods over the past two decades. Lower prices, more choice and greater convenience have all been a boon to consumers.
But, does it come at a price?
Certainly, Irish retailers would argue. For decades, independent shops on the high street have been under pressure from chain stores, who have themselves had to compete with or locate in out-of-town shopping centres, and big-box retailers like Ikea more recently. The shift online has long been underway, but the pandemic surge has accustomed us to the convenience of one-click shopping for groceries and a whole range of other goods. That won’t be sustained as things normalise post-Covid, but neither is it likely to go back to business as usual. Amazon’s position as global leader will only to be further entrenched.
One up-shot of Brexit is that Amazon is to establish a new 1,000-job ‘fulfilment centre’ in Dublin. With some 5,000 existing employees, the company is already one of the largest private sector employers in the country. But fulfilment centre jobs will be a different beast to those in data centres or the company’s Web Services arm.
Lots of people are going to be desperate for any job they can get by later this year, while consumers might not see any downside to and faster deliveries. But, workers beware! One of the ways Amazon manages to keep prices so low is by squeezing every last drop out its warehouse workers, treating them as expendable and crushing efforts to organise in trade unions. Fair game, if it keeps prices low, some might say. But, do we really want people in Irish workplaces –’pickers’ in fulfilment centres, or delivery drivers, for example – to be under such time pressure to meet performance targets that they have to urinate in plastic bottles because they can’t take time to use the bathroom?
There has been much lauding of ‘essential workers’ during the pandemic. Not only were we clapping frontline health workers, but many of us have developed a newfound appreciation for workers keeping the show on the road: stacking supermarket shelves, delivering food and, yes, fulfilling Amazon orders. We have a duty to ensure the dignity of all Irish workers.
Another way Amazon manages to keep prices so low is that, by virtue of its massive size, it has massive power to drive down prices offered by publishers and other suppliers. We are unlikely to see an upsurge in Irish businesses selling products to Amazon just because they have a physical presence here. And, those that do are likely to be forced to sell at rock bottom prices.
Not only has the company been accused of using sharp practices with its workers and suppliers, it also pays little or no tax on its super-size profits. The company recorded a record €44bn sales in Europe in 2020, up a third on 2019, but didn’t pay a cent in corporation tax. Why? Because it is believed to have shifted funds between various affiliates in its corporate structure so as to record a €1.2bn in its Luxembourg-based EU HQ. For once, Ireland is not the tax villain of the piece. Globally, the company more than doubled its profits to $21.3bn for the year.
We have been conditioned to think of ourselves as consumers first, citizens or workers a distant second or third. We all have so much going on in our lives, with so many competing demands for our time and money, that it’s easy – maybe too easy – just to take the cheapest, most convenient option. Hands up: I do it myself.
But it’s important to consider that our penchant for fast fashion, for instant gratification at bargain basement prices, has a hidden cost. As we gradually return to normal, we need to stop the creeping Amazon-ification of our economy.
Individual consumers can make a difference by voting with their wallets. But more fundamental changes need to be voted through the Dáil as part of a wider agenda of decent work and fair taxation. We need new legislation to protect gig economy workers; ensure the right to disconnect; and, most important of all, give all workers the right to collective bargaining. Everyone should have the right to a living wage, job security and decent work conditions.
As for big business, it needs to pay its fair share of tax. If reform of Ireland Inc’s corporate tax regime is to be forced upon it – which seems more likely amid global pressure after Ireland was one of just nine countries out of 139 to hold out on the recent historic OECD deal on corporate tax – why don’t we seize the opportunity for progressive tax reform and re-think our national business model?
Once, Ireland was a low-cost manufacturing centre. But we moved up the value chain when we could no longer compete on wages. Rethinking corporation tax is our next big challenge.
For the last three decades at least, we have been a low – or sometimes no! – tax paradise for multinationals, but we’ve never really put in the hard yards to harness their dynamism to bolster our indigenous industry, our start-up ecosystem or our research centres of excellence. This should be central to a new, progressive industrial policy. We can and must move up the value chain again. Because, the game has changed.
Victor Duggan is an economist.
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I hate using amazon. But when group buying, the prime free delivery makes it so much cheaper. My ethics have to come after my wallet at the moment.
@Stephen Nix: Eh, no they dont
@Simon Gregory: Did anyone actualy watch the video? Im sorry compared to SpaceX this looked like a bunch of lads in a gigant tampon flying up. Landing few sec later and calling themselves astronauts.
@Simon Gregory: That’s his choice and not yours.
@Stephen Nix: when you’re wallet is empty, all you’ll have left is ethics. And if you’ve dumped them already…..
@Simon Gregory: my ethics involve not getting clealry ripped off, so it’s a pretty easy choice
I honestly do my best to support local business. But Amazons’ customer service, speed of delivery, value and wider choice is very difficult to ignore.
Sometimes people and even ‘economists’ forget that the Amazon shelves are in a lot of ways populated by independent business owners the world over who are taking a hit on their instore margin for the volume potential on offer. Amazon is only one channel that Irish businesses can utilise in e-commerce and indeed only one employer that deliver. In fact Amazon don’t deliver… they do it through public sector third parties- so the writers point there is mute. The customer has access to better information and the concept of value across industries is more easily definable as a result. Brick and Mortar shops need to get smarter about how they reach the customer. The skills and knowledge gaps out there unfortunately is a key reason for job losses.
@Glenn Halpin: Amazon does deliver, and has had delivery drivers in dublin since last Nov.
Big batch of stuff gets shipped nightly, sorted in warehouse, then out for delivery. You van even see where the van is on your order, and how many stops away.
@Glenn Halpin: I think the future for physical shops is incorporating AR glasses into the experience. Imagine thumbing through a rack of clothes and the glasses pull out the sizes/price specs/model picture without having to take it off and directions to recommended matching clothes. Incorporate online shopping and backroom stock info for anything not to hand. You’d need good AI and sensors to keep track of where everything is in the shop.
I’d love it for a food shop, recommended meals with the ingredient locations flagged plus your glasses is tracking your food and expiration dates at home. Then your car roof-drone carries the bags out in a dedicated basket.
@Watchful Axe: Don’t know if you’ve seen Microsoft hololens, but that future you predict is on it’s way
You had a full Amazon spread back in December after articles calling for people to shop local. Nobody believes you.
Sweet. I agree. Yet you had an article trashing, consumerism. Yet had a full site advertisement days later . Contradiction much?
Lovely sounding article, shame it’s never going to happen.
Trying to persuade already hard pressed people living in this rip off of a country to shop local is a complete waste of time, people budget shop with their food going to Aldi and lidl to save money so if we will do it with food we certainly will have no issues doing it with other products, the high street is dead in the water if u ask me, the situation for small shops was already precarious before covid and now its a lost cause, personally I buy almost everything online, the choice, the speed of delivery, the convenience, the value, its all just so much better an experience than getting into your car, wasting time, stuck in traffic, trying to find parking, queueing and last bit not least the extortionate cost compared to buying online, it’s not even a competition at this stage, online 100%
@Hugo Bugo: Hey Hugo, the key with the full stop is just to the right of the one with the comma.
@Hugo Bugo: Ditch the car.
@Sean O’Doherty:,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,.
@Hugo Bugo: burn lol
@Hugo Bugo: online all the way? You should watch Wall-E and see what’s on the way. Your understanding of the way the economy works is scary in its absence.
Victor is an economist that is ignoring a number of key factors, for example:
Globally there is an ongoing trend toward a majority of shopping moving to online shopping. That isn’t a total move, it’s a majority, therefore brick and mortar will not go away, stores need to move toward omni-channel retail which has been made easier by companies like Uber Eats, etc.,
Amazon allows independent sellers to sell…. The business model of many, many independent retailers includes utilising Amazon as a channel within its omni-channel approach
If Ireland fights and resists the global trends, as every article on thejournal seems to fight against them, then not only will it be stuck in the past but it will struggle to catch up…. Look at broadband rurally if you want an example of how that can happen.
@Local Ore: sorry, but with 150Mb rural broadband you’re talking through your hat..
@John Moylan: NBI is still only rolling out fibre in Galway, Cork and Cavan and plans to complete the 150mb roll out by 2027 as part of the $3bn government plan to deliver rural broadband. You can check their website if you want.
Our company monitors it as we have many (1,000+) Irish employees on flexi work.
I’m not sure of your point other than you possible have 150mb broadband, fair play to you, but it’s not rolled out yet and the scheme had been a total mess until Granahan McCourt won the bid to roll it out
Buying from Amazon UK u have to pay customs & excise tax so not cheaper in long run.
@Christybhoy67: not true. Not every item on amazon UK is shipped from the UK.
@Christybhoy67: Buy from Amazon DE our from other European countries. None of those taxes.
@Christybhoy67: I use Amazon for buying books, BDs, records & CDs. They remove UK VAT (20%) & add on Irish VAT (23%) which they call “Import Fees Deposit” and no further charges are payable.
Amazon get criticised a lot but they do have a transparent charging system in place. This contrasts with a couple of other UK sellers who operate as follows:
1/ Don’t deduct UK VAT
2/ Use a courier to ship (not disclosed when purchasing) which results in Irish VAT AND a handling charge of €15-€18 being levied on the doorstep.
3/ Ignore all correspondence afterwards
If local businesses can’t compete on price they may be able to compete on speed. So I suggest a mechanism where if someone searches for an item Amazon should show a local shop or two with that item in the top part of the search results. Maybe the shop has to advertise but the closest shops with the item in stock take the top spot.
Then you can book via Amazon, so everybody gets their cut, and collect that day.
Always always try and buy local. Occasionally when I can’t source local I use Amazon as a kind of search engine. I find what I’m looking for then I contact seller directly and buy directly from them. Never had a problem and they are delighted as they don’t have to pay Amazon commission.
My son worked in a Wincanton warehouse in Ballycoolin for 2 months and everyone is tracked and constantly screamed at to go faster if they fall below the hourly rate. Which basically means they run around sweating all day to fulfill orders. This practice should be illegal.
I can buy a Swiss made product for half the price in UK. An Irish family firm with the import rights for Ireland they also have rights to car brands. Sell it for 100 plus Euro. Not a chance shop local.
@John O Connor: We’re not in the UK so what has that got to do with anything? And UK wage levels are lower than ours too….
Lower shipping costs.
@Contrary Mary: We’re going to need a bigger boat.
Sites like shopinireland.ie allow you to shop local AND online, and can certainly compete on speed of delivery.
Stephen Nix, the first post, nailed it, “Wallet before Ethics”. It is not the fault of, the likes, of Amazon, it is the fault of the people who buy from Amazon. People are well aware of the pitfalls of Amazon but we conveniently shove that aside and even brag about the bargain we got or how much cheaper it is to shop there, ignoring the real affects on the economy. People, if they want, have the power to stop that but they don’t want it to stop. They don’t want to make the connection between the rising profits and a living wage. Because when they look for a local alternative, they find local businesses are cutting their own throat’s in the long term, by charging extortionate prices and then complain that they are being chucked off the high street. So we March back to Amazon to the detriment of our economy and offer our nurses a 1% pay rise while Pascal protects multinational profits around the World. And it is getting worse. E.G. Hotels have got millions from Govt and double and treble prices with reduced services. Not exactly boosting tourism. Do we seriously think those prices will return to pre pandemic levels. As tough as it might be we are going to have to put ethics before wallet, if we really want proper living wages.
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Amazon…Great service unless you work for them.Watch as they gobble up the competition and decent work.
The employees don’t appear to have great working conditions. Therefore, I won’t be financing his outer-space trips any time soon.
@Philip Duffy: as you can see in the comments above,people dont give a flying monkey about ethics when it comes to their pockets. In no area of life are we in this together. Let it be a pandemic, killing businesses, buying sweatshop items cause theyr all so cool,global warming issues,you name it. Its always about ‘Me, me, me ‘..my money, my difficulties, my needs. F the world, and all. Its never our problem or our responsibility
We’d still have woolly jumpers & wellies if we lived like this muppet wants us to. No one is forcing anyone to shop online or in a supermarket but guess what, the food is fresh & of a standard we expect served to us by people that bath or shower more than twice a year. 25 years ago I wandered into a corner shop & dumped what I’d bought when I left has the egg box & bread packaging stank of BO so heaven knows what the ham had crawling around in it. Then I found a SuperValue & thought ah thank god!
@Joe Thorpe: What are you on about? Think you misread the article… Don’t think he’s suggesting Amazon or the likes are going away. Local businesses are on their knees while large supermarkets and chain stores have remained open throughout the pandemic. They need our support and money or such stores could be lost forever that’s all. Personally I find Amazon obscene anyway so I never use them.
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