Indie Business Survey: Amazon Monopoly a Key Threat

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On Tuesday, August 6, the Institute for Local Self-Reliance (ILSR) released the results of its 2019 Independent Business Survey, a survey of more than 1,000 indie businesses nationwide. The survey revealed that while indies continue to show resilience, their ability to compete is hampered by an uneven playing field with policies that favor their bigger competitors, highly concentrated markets for key supplies and services, and difficulty securing capital, among other barriers. Indie retailers ranked Amazon’s market power as a key threat to their business and believe it should be investigated for antitrust violations.

The findings of the business survey indicate that small business owners don’t believe the primary problems facing their businesses are technology or consumer habit. Rather, they report that they are operating on an uneven playing field and that many recent public policy decisions have fueled market concentration and favored their big competitors.

“This new survey of U.S. independent businesses from the Institute for Local Self-Reliance and the Advocates for Independent Business makes clear the overall strength and resilience of indie businesses, which are more diverse and innovative than ever,” said American Booksellers Association CEO Oren Teicher. “But it also underscores the serious challenges they are dealing with in the face of increasing consolidation and policies that, too often, favor mega-corporations and not the local businesses that are the real engines of job creation and sustainable economies. With this data, indie businesses and policymakers will be in a far better position to work toward strong local communities.”

Of the respondents, indie retailers made up about half of the responses, while the remainder represented a mix of industries, from service providers to manufacturers, banks, wholesalers, and more. In addition to the main questions, business owners provided hundreds of written responses on various topics. The ABA Advocacy team analyzed these for additional insights and quoted a representative sample in this report.

Among the survey findings:

  • Indie retailers overwhelmingly ranked Amazon’s market power as the top threat to their businesses, and only 11 percent of those selling on Amazon’s Marketplace described their experience as successful.
  • Seventy percent of small businesses said Amazon’s market power should be investigated by antitrust regulators.
  • Forty percent of retailers said there has been a significant merger in their industry in the last five years.
  • Independent businesses said they are paying higher prices and receiving less favorable terms as a result of growing concentration among suppliers.
  • Fifty-two percent of independent retailers in cities reported that commercial rents have been rising faster than their sales. Only six percent said rents have been growing slower than sales.
  • Indie retailers are spending an average of three percent of their total revenue on swipe fees.
  • Forty-one percent of those that sought a loan in the past two years did not receive the funding they needed. This figure was higher for businesses that are new, smaller, minority-owned, or women-owned.

Booksellers can download the full report here.