It seems like you can buy anything online these days, but there are some things Amazon cannot deliver. Independent businesses beat Amazon in job creation, economic impact, and diversity. “Shop Local” is a common phrase, but few truly grasp the massive economic impact small businesses have on our economy. Get the facts about the power of local, and learn why independent businesses are crucial to our community’s success.

1. The Power
of Local:
3 Reasons to Rethink
Your Amazon Account
Photo from ecommerceguide.com

2. Why “Pick”
on Amazon?

3. 1. They’re huge
• More than half of all online shoppers skip search engines and
go directly to Amazon to shop.
• $1 out of every $2 spent online is spent on Amazon (that's
50% of all online purchases).
2. They’re everywhere and in nearly every industry
• Retail, grocery, web services, video and TV, shipping, Twitch
(gaming), Zappos, Shopbop, IMDB, Audible, Amazon
handmade (Etsy), Diapers.com, Amazon Business (Staples),
music streaming, publish books, 7 fashion lines (national top
seller of apparel), second largest seller of electronics, kindle,
echo, and now they are opening brick-and-mortar stores.

4. Reason #1
Level Playing
Field

5. Amazon competes with companies AND
sets terms by which they reach the market
Photo from bookseller-association.blogspot.com

6. Point 1: The Amazon Marketplace is not the free market
Amazon has the market dominance:
• Amazon is a privately controlled marketplace and it has market
dominance which gives sellers little alternative. In this arena,
Amazon both competes with other companies and sets the terms
by which these businesses can reach the market.

7. Point 1: The Amazon Marketplace is not the free market
To put that in perspective…
• Two-thirds of all books are sold online and Amazon captures 70%
of those sales. Removing a book from Amazon could lead its
sales to plummet by 50% or more.
• Amazon suspended pre-orders, delayed shipping times, and
modified its search algorithms to direct shoppers away from
thousands of books by the publisher Hachette during the
renegotiation the publisher's terms with Amazon. While the
parties negotiated, Amazon suppressed the career prospects and
incomes of over some 3,000 authors.

8. Controls consumer choices and
takes advantage of third party users
Photo from lifehacker.ru

9. Point 1: The Amazon Marketplace is not the free market
Amazon has tons of data:
• They can use its massive amounts of data to control consumer
choices and take advantage of third party sellers and producers.

10. Point 1: The Amazon Marketplace is not the free market
1) With that data Amazon can exploit manufactures
• Amazon has begun to exploit the data it has gathered from
manufacturers to compete directly with them by producing the
same products.
• Example: Upstream Commerce tracked 857 apparel items first
offered for sale by Marketplace sellers and found that, within 12
weeks, Amazon began selling 25% of their top-selling items.
Then Amazon can lower the price of the product so they become
the default seller and place their items before third-party sellers.

11. Point 1: The Amazon Marketplace is not the free market
2) With that data Amazon can manipulate choices & prices
• Amazon uses their data to shape what we see and adjust prices
accordingly. It is estimated that Amazon makes at least 2.5 million
prices changes a day.
• How do you know what you are not seeing?

12. Reduces choices available to consumers +
impacts liberties as producers and workers
Photo from classroom.synonym.com

13. Point 1: The Amazon Marketplace is not the free market
RESULT 1: Stunting business and product growth
• In a diverse retail sector, products can find their way to consumers
through a vast number of streams and tributaries. When this gives
way to a single river, fewer products make it downstream.
• As a result there is less diversity, invention, innovation, and jobs.

14. Point 1: The Amazon Marketplace is not the free market
RESULT 2: Starting a new business has become less possible
• Number of new businesses launched each year has plummeted
by more than one-quarter in the last decade according to an
analysis by the Kauffman Foundation.
• In national survey by the Institute for Local Self reliance and their
national partners, small business owners said competition from
online retailers is their number one challenge.

15. Small businesses created nearly 2 million of the
roughly 3 million private sector jobs generated in
2014 (Small Business Administration).
Photo from forbes.com

16. Point 1: The Amazon Marketplace is not the free market
RESULT 3: Stunts job growth
• Larger competitors crush small business, which hobbles job
growth, because young, growing businesses are responsible for
virtually all, new job creation.
• Small businesses created nearly 2 million of the roughly 3 million
private-sector jobs generated in 2014 (Small Business
Administration).

17. Reason #2
Economic
Prosperity

18. Point 2: This Is Not the Way to Economic Prosperity
(It is for few NOT FOR ALL)
Amazon is:
1. Destroying more jobs than it’s creating
2. Replacing stable and full-time careers with temporary labor
3. Undercutting the wages

20. Point 2: This Is Not the Way to Economic Prosperity
1) Net loss of jobs
• At the end of 2015, Amazon displaced enough sales at brick-and-
mortar stores to force the elimination of about almost 300,000
retail jobs.
• Counting full-time, part-time, and temporary employees Amazon
created 1450,000 jobs. That’s a net loss of nearly 150,000
American jobs! That doesn’t take in to account the small
businesses’ service providers that also loose clients.
• Amazon’s job creation is NOT A NET GAIN!

21. Majority of jobs created are not pathways
to wealth
Photo from Huffington Post

22. Point 2: This Is Not the Way to Economic Prosperity
2) New jobs created are not pathways to wealth
• Amazon is replacing thousands formerly stable and full-time jobs
in industries such as warehousing and with temporary
employment.
• Flex labor / gig economy loopholes:
• Temporary employees are not eligible for most benefits or basic standard
labor law protections.
• Misclassifying workers allows employers to save on workers compensation
insurance, payroll taxes, and overtime.
• Temporary workers have to pay self-employment tax and cover benefits
usually provided by employers (i.e. health insurance and retirement plans).

23. Point 2: This Is Not the Way to Economic Prosperity
3) Lower wages
• Amazon pays warehouse workers on average 15% less for
comparable work.
• Low wages disproportionately affect African-American and Latino
workers who compose 45% of Amazon’s warehouse work, but
only 8% of Amazon’s management team.

25. Point 2: This Is Not the Way to Economic Prosperity
Local businesses provide more economic opportunities
• Locally owned businesses create more jobs that employ members
of our community.
• Study by the Institute for Local Self Reliance (ILSR) showed
independent retailers employ 47 people for every $10 million in
sales, while Amazon employs only 19 people per $10 million in
revenue.

26. Local Business Multiplier Effect

27. Point 2: This Is Not the Way to Economic Prosperity
Multiplier effect
• When you spend money at local businesses, the money circulates
longer and has up to three times the impact than money spent at
national chains. That’s because local businesses, re-spend that
money throughout the local economy at a much greater rate.

28. $760 million in subsidies from 2005 - 2014
Photo from barnumcelillo.com

29. Point 2: This Is Not the Way to Economic Prosperity
Subsidies and public incentives fund Amazon’s expansion
• Amazon’s total public subsidies from 2005-2014 for their
fulfillment and data centers nationally equals $760 million.
• To put that in perspective that's 17% of Amazon’s global profits
during this period. Amazon also reported $2 billion in free cash
flow in 2014, but still squeezed local governments for initiatives.
• In 2017, the incentives now total closer to $1 billion.

30. Reason #3
Local
Investment

31. In 2014, Amazon did $2 billion in sales in
Illinois without hiring a single person in state.
Photos from herb.co

32. Point 3: Local Businesses are Invested
• In 2014, Amazon did $2 billion in sales in Illinois without hiring a
single person in the state.
• Amazon expansion on a local level has led to property vacancies,
job losses, and revenue shortfalls that all fall on the community to
fix.

34. Point 3: Local Businesses are Invested
Independent businesses employ members of our community
• Goldman Sachs 10,000 Small Business Program at Delgado
College in New Orleans, LA.
• The 25 local business owners in this cohort (pictured in the slide
before) are responsible for over 350 jobs, counting both full time
and part-time employees. That’s not including all the local service
providers and suppliers they also work with.

36. Point 3: Local Businesses are Invested
Independent businesses keep your dollars local
• Money circulates longer and has a larger impact than money
spent at national chains.
• American Independent Business Alliance estimates, on average,
48% of each purchase at an independent business is re-circulated
locally, compared to less than 14% of purchases at chain stores.

37. Local businesses foster a sense of place, social
capital, promote civic engagement, employ our
community, and bring enjoyment.
Photo by Peter G. Forest - Forest Photography, LLC

38. Point 3: Local Businesses are Invested
Independent businesses bring enjoyment beyond the monetary
exchange for goods.
• We’re more than consumers! Our local business communities
foster a sense of place, social capital, promote civic engagement,
employ our community, and bring sensory and social enjoyment
beyond the exchange of money for goods.

39. We can make
the change!

40. Shift your shopping and sourcing!

41. Make a Change!
• In StayLocal’s 2009 “Thinking Outside the Box” report, we
found that if New Orleanians shift just 10% of their shopping
from a national chain store to a local business, there would be
over $60 million annually injected into the local economy in
the form of re-circulated dollars that would otherwise leave
Orleans Parish.
• At the seven-parish metropolitan level, a 10% shift would add
an additional $235 million into the regional economy

42. Policy Approaches:
- Limit mega retailer's influence
- Protect workers rights
- Promote small business growth
Photo by Peter G. Forest - Forest Photography, LLC

44. Meredith Cherney
Meredith@staylocal.org
504-252-1259
www.staylocal.org
@StayLocal
@StayLocal_nola
Stay in Touch with StayLocal

45. Sources:
"All About Amazon.com Corporation." American Independent Business Alliance. N.p., 06 Apr. 2017. Web.
Eness, Dana, and Dan Houston. Thinking Outside the Box: A Report on Independent Merchants and the
New Orleans Economy. Rep. The Urban Conservancy and Civic Economics, Sept. 2009. Web.
LaVecchia, Olivia, and Stacy Mitchell. Amazon’s Stranglehold: How the Company’s Tightening Grip Is Stifling
Competition, Eroding Jobs, and Threatening Communities. Rep. Institute for Local Self-Reliance, Nov. 2016.
Web.
Goldman Sachs 10,000 Small Businesses Orientation. Delgado Community College, New Orleans. Jan.
2017. Address.
Stay Local!, and Urban Conservancy. 2016 Report: New Orleans Independent Business Trends. Rep. The
Urban Conservancy and Stay Local!, May 2016. Web.
“The decline of American entrepreneurship — in five charts,” J.D. Harrison, Washington Post, Feb. 12, 2015
(citing analysis from the Kauffman Foundation); “Declining Business Dynamism in the United States: A Look
at States and Metros,” Ian Hathaway and Robert E. Litan, Brookings Institution, 2014.
"The Multiplier Effect of Local Independent Businesses." American Independent Business Alliance. N.p., 23
Mar. 2017. Web.
U.S. Small Business Administration. SBA Administrator Honors Nation’s Top Small Businesses. Sba.gov. U.S.
Small Business Administration, Apr. 2015. Web.