September 4 -- Amazon's notoriously low
prices have always given traditional retailers a run for their money. But as
the online behemoth builds new warehouses to cut shipping times, small shops
are getting even more nervous.
Amazon already has 40 massive fulfillment
centers around the country, helping it provide remarkably speedy delivery.
"Prime" subscribers get free shipping with even faster delivery: Two
days, guaranteed.
But it's about to get even faster, as Amazon
builds another five distribution centers this year. The company won't disclose
where, but the warehouses are expected to be near several major cities --
including rumored locations outside of Manhattan.
Joe Perrotto owns Power Equipment Plus, an outdoor equipment retailer with three
locations, including one outside of Philadelphia. He already keeps a close eye
on what Amazon charges for things like lawn mowers and leaf blowers and tries
to price his products accordingly. But faster Amazon delivery will squeeze him
further.
"They'll have the convenience and
immediacy of retail," said Perrotto. "Ultimately, it's going to erode
our profitability as we try to offer a price advantage to counter their
convenience advantage."
It's the latest in what some view as Amazon's
war on small businesses. First came the rock-bottom prices. Then came the Price
Check app, allowing shoppers to scan items and compare in-store prices to those
on Amazon -- essentially turning independent shops into a showroom for Amazon.
Amazon didn't comment about its impact on
small businesses, but spokeswoman Kelly Cheeseman did say new fulfillment centers
have boosted local employment
and increased demand at restaurants.
For example, Ziggy's Pizza and Sandwich Shop
in Gladeville, Tenn., saw its daily deliveries jump 20% this year after
Amazon's warehouse opened in a nearby town.
"It's definitely a positive for the
community," said Ziggy's owner Adam Shireman.
Other small business owners welcome Amazon's
expansion and hope to ride the wave with it.
Sara Selepouchin Villari produces her own line
of handcrafted towels and sells them directly to Amazon, which stores them in
nine warehouses across the country. It takes care of the orders, shipping and
pays Villari a cut.
The more warehouses Amazon adds, the closer
she is to her customers.
"During the holidays, it'll be
awesome," she said. "When I have customers asking about expedited
shipping, I'll be able to point them to Amazon. I'm going to go home and have
dinner with my family."
Villari also owns a boutique in Philadelphia, Girls Can Tell, but she's not worried customers will turn to
Amazon. While Amazon threatens stores that sell generic items easily found
online, Villari has filled her shop with unique artisan
products.
"A good boutique has been curated. You're
going to stumble upon gifts you never knew existed," she said.
But benefiting from Amazon's new warehouses
isn't an option for Meyer Dagmy, owner of the Mashern Army/Navy
supply store in New
York City. He tried selling through Amazon, but found it almost impossible to
sell his goods at prices that could compete online. In some cases, he'd even
lose money on a sale.
Now he just hopes Amazon stays away from his
specialty: Military and tactical gear.
"Amazon's got bigger fish to fry than me.
But if they get into my niche, they could take me out of business," he
said.
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