A monopoly is a type of market structure where there is only one dominant seller. It is extremely hard to enter an industry with a monopoly as a result. The monopoly would be responsible for most of the sales in that industry. When people talk about monopolies, Amazon is brought up a lot, and for good reason. It is the biggest online retail company and is still growing extremely fast. However, it is not close to being a monopoly or part of an oligopoly. Last year, Amazon sold 150 billion dollars in retail sales. The total retail sales last year in the country were 3.7 trillion dollars. This means that Amazon is only responsible for about 4%(!!!) of total retail sales. Amazon was the biggest online seller, but Walmart still outsold them by a long shot last year and they are mentioned a lot less than Amazon. To be fair, they are not growing at a speed close to Amazon's, but they still sold 500 billion dollars. That number in sales is more than three times Amazon's number. Amazon could easily become a monopoly in the future the more we use online shopping, but right now there is a lot of work to be done.
https://www.businessinsider.com/amazon-stock-price-not-a-monopoly-2017-8
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It's interesting that Amazon only made up 4% of retail sales, since it seems like they have a lot of control over the retail market. I think it's also interesting since a lot of times, a monopoly is associated with a lack of competition in a market, but Amazon's variety of sellers and products has diversified the market and provided competition to traditional retail stores that made up much of retail sales in the past. And while Amazon isn't a monopoly, their growth is significant in terms of yearly improvements. While online shopping may monopolize shopping as a whole in the future, I agree that it'll take Amazon a while to become a true monopoly.
ReplyDeletehttps://economyandmarkets.com/markets/reasons-amazon-not-monopoly/
Great post Henry! Amazon is not a monopoly yet because it doesn't have complete control on its supply of goods or service - there is competition as you mentioned. Amazon only constitutes 4% of America's retail sales - if it constituted 50%, it would be considered a monopoly (according to US Department of Justice). So, in its current position, Amazon is clearly not a monopoly.
ReplyDeletehttps://www.forbes.com/sites/brittainladd/2018/07/29/amazon-is-not-a-monopoly-president-trump-yet/#317533054735