How the “Amazon Effect” is Shutting Down Businesses

– Hey there, Jamie
Davidson with AMZ Insiders. A little bit about ourselves, myself and my two fellow
co-founders, Jason and Brad, sold over 75 million
dollars last year on Amazon. This year we’re projected to do well over 100 million dollars. And today we wanna talk to
you about a question we get which is when you hear
what is the Amazon effect. So you may have heard of
this, you may have not. There’s a term called the Amazon effect and you’ll hear it thrown out a lot. You’ll hear it in news
articles all the time and they’ll usually talk
about a struggling retailer and the retail industry in total, the traditional brick and mortar business, and the death in large part of the brick and mortar business, not the complete death but for in terms of traditional brick and mortar retails. And they usually, almost every
article that’s referred to, they’ll be reference to the Amazon effect. And the point, what the Amazon effect is is just the impact that the
growth of the Amazon platform and Amazon as a company
has had on changing retail, how things work, how consumer behavior how they acquire goods, purchase goods, how we get physical products. And that’s called the Amazon effect, which is ultimately tied to
the financial performance of these traditional
businesses that can’t survive up against a new model
that’s much more efficient in so many ways, and it’s
actually an understatement to say it’s much more efficient. In the Amazon model, what’s
really unique about it is it allows sellers to
plug into the models. The majority of Amazon products,
over 85% are actually sold by third party sellers selling
through the Amazon platform. So when you buy something from Amazon, you’re typically you know, if you buy, I’m in our warehouse here, but
if you were to buy something off of Amazon, typically
this is not Amazon’s product. This is in this case, if you
bought this you’d be buying our product, this is our product. We’re a third party seller
leveraging the Amazon platform. What Amazon’s doing by
creating the platform, they’ve allowed this
economy, world wide economy basically to flourish
and ecosystem flourish for people to all plug in
and benefit financially of this huge growth of ecommerce. And it’s also a reward to
the customer to be able to get really good products
’cause we’re all competing for really good quality at
a really great price, right? Because you don’t need
all these store fronts and brick and mortars and
teams of customer service and all these things,
when you can just simply order it online, right? And you can sell things
where people can go, point and click on their computer, and even more popular right
now is point and clicking on their phones. So they’re just simply
going to their phone and Amazon makes it incredibly easy, they’re the best at this. If you’ve been to the Amazon app, to buy something at Amazon you could do it in like 15 seconds. Go find your item, click on
it, it’ll be at your doorstep within two days. If not tomorrow or even
maybe in a couple hours by this evening. That is the power of Amazon,
that’s the Amazon effect when we talk about the whole industry. What that means, for one
thing it scares the heck out of competitors. So the really kind of
inefficient, old retailers think of companies like Kmart in the U.S., Sears, those type of retailers, those are kind of the first
to really, really you know, be in a lot of trouble. Those retailers are already in trouble by more efficient
companies like the Walmarts and Targets and Lowe’s and so forth. But really, Amazon scares
the heck out of the biggest retailers so Walmart, which
used to be big bad Walmart that everyone was scared of
Walmart, Walmart, Walmart. Well Walmart is very scared of Amazon and whether they would probably
not use the word scared, that definitely is one of
the appropriate descriptions of how they think of Amazon. Because they know the power of Amazon and the online space is so powerful, that it is really certainly a
threat to Walmart’s existence. So Walmart naturally is trying to compete and that’s why they mimic
some of the platforms they would have. With this Amazon effect,
you know that sellers, it’s so hard to compete
because Amazon’s so far ahead of everybody, they have
this incredible opportunity. There’s so many people that
have made lots and lots of money, and we’ve built
a huge ecommerce business all leveraging the power, the technology, the breath, the marketing
skills, all of Amazon. I mean Amazon if you can
remember way back when, I think it was 1997 Amazon
started out as a book company. Amazon was just selling
books online, right? And then what happened,
you wanna talk about the Amazon effect. Think about Borders books,
when’s the last time you been in one of those? It doesn’t exist anymore. Think about music you know,
back then CDs, everything else, music stores went out a long time ago too similar to how iTunes crushed
a lot of that industry, but the ability to buy stuff online there’s just so many
industries and stores. And as Amazon’s progressed
it’s leveled the playing field, it’s eliminated those stores but at the same time it’s
created so many great opportunities for people like me and you, anyone that’s interested in
getting involved in ecommerce. It’s allowed us to step
in and basically get into the commerce space,
which before in the past you had to be part of a major retailer or you had to be a mom
and pop shop down below. But now because of the power of Amazon, really anyone has the
ability to get under way. So again that is, if you
hear the Amazon effect, that’s what it’s talking about, the impact of it. And the Amazon effect’s not going away, it’s only getting bigger so
you’ll continue to see more and more situations of it, which there’s always kinda
winners and losers of it too. There’ll be changes you know over time, technology grows so you
either can be on that side that guys are kinda getting squashed or you can position
yourself on the other end and taking advantage of the opportunity, taking advantage of the
opportunity that Amazon presents. The huge growth that’s
happening with ecommerce and position yourself
on that side of things, and learn how to sell on Amazon, learn how to have your
own ecommerce business and grow it yourself and take advantage of this huge growth ’cause more
and more is gonna continue to come this way. So why not be on that side
of things and take advantage and build your own ecommerce business? And be part of this incredible growth that the Amazon effect has caused. So if you like this video
all about the Amazon effect, we have a free workshop, click below. I talk specifically exactly
how we leveraged Amazon ourselves to build our
very own 75 million dollar plus business on Amazon, soon to be over 100 million. We go through the exact steps we used but more importantly, we
talk about how you can follow our processes and
take advantage of this exact opportunity for yourself
to build your very own ecommerce empire using and
leveraging the power of Amazon. So if you like this
video be sure to give us a thumbs up, and really important
make sure you subscribe. Every week we put out great new content all about Amazon, our
story, our taking advantage of this incredible growth
we’re seeing with ecommerce and how you can take
advantage of this opportunity. So again be sure to subscribe, and lastly we’d love to hear from you. If you have any questions about
anything related to Amazon, please go ahead and leave a comment below. Again we’d love to hear from ya or any feedback you have. (light music)

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