It is no question that Amazon has spread its wings across quite a few industries. From batteries to baby wipes—they’ve seemed to find a way to make an Amazon version for just about everything.
Some products, however, are better than others. Recently, there was an article from “The New York Times” stating that Amazon is beating out many electronics companies due to the insanely low prices of their products and their seller’s products. This may, in turn, lead to the eventual decline in bigger name brands that can’t compete with Amazon’s low prices.
If you’ve studied economics at any length, you know this could easily become a monopoly. In other words, Amazon would become the price setter. With that kind of power, they would run the industry.
“The New York Times” states, “We’re going to get better products for ludicrously low prices, and big brands across a range of categories — the Nests and Netgears of the world — are going to find it harder than ever to get us to shell out big money for their wares.”
But some may rebuke this theory with the statement, “The quality probably isn’t near as good!” Wrong. They apply the same principles to their Amazon sellers as they do themselves.
Allen Fung, the General Manager of Sunvalley’s American Division told “The New York Times,” "’It’s not a race to the bottom,’ Mr. Fung said. ‘Sellers are forced to create better products at lower pricing, and sellers who aren’t able to do that just get weeded out.’” Here is a photo of Mr. Fung, courtesy of Jason Henry at the New York Times.
But how do they determine what is acceptable in the eyes of the consumer? Simple—they listen to the reviews. If your reviews are poor, you get the boot. Because most companies can’t achieve both simultaneously, Amazon swoops in with both.
What does this mean for the future of electronics or any other brand for that matter? Only time will tell. Naturally higher quality and lower prices will lead to the purchase of more products. Everything has its time to end though, for one reason or another.
What do you think will be the future of the overall marketplace now that Amazon is king? Let us know in the comments on Facebook!
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