Over the last year, one news story has competed with the abundance of COVID-19 talk, and that is the closures of hundreds of thousands of small businesses across the globe. With stay-at-home orders, restrictions on store hours, curfews, and a general fear of being outside, governments are trying to put an end to the virus. But this is changing spending patterns that put small businesses at a disadvantage.
The State of Small Businesses
According to the Canadian Federation of Independent Business (CFIB), around 158,000 small businesses will shut-down due to COVID-19, which is around 14% of small businesses in Canada.
For our neighbours in the south, the pandemic has claimed over 73,000 small businesses to date. With all this loss, who is profiting?
Amazon’s Reign
While many companies have struggled just to get by, one company has been thriving: Amazon.
Since the start of the lockdown, total e-commerce sales have nearly doubled, which makes sense. People are stuck indoors and getting items right at your doorstep is convenient. With Amazon controlling nearly half of the online market, they have experienced their strongest year-on-year growth. This has been the company’s biggest quarterly profit since 1994, which is the year Amazon started.
With a new government taking control in the US, many are worried about what that means for the market that Amazon already controls heavily. Joe Biden, who was inaugurated just a few weeks ago, is an Amazon shareholder, like many other politicians. The continued growth of the online shopping store might make many politicians richer, but small business owners may be put out of work.
Jeff Bezos, Founder and CEO of Amazon, has held the title of the world’s richest man since 2018. Breaking a nearly 20-year reign by Bill Gates, Bezos was quick to leave his mark among the rich. With a net worth crossing the $200 billion threshold, Bezos quickly became the richest man in modern history. With all that money and power, he is now encouraging his Washington contacts to continue with the lockdowns. This move puts the nail in the coffin for his small business competitors. Try as they might, these owners cannot afford the hefty fines for staying open.
In the end, Bezos and Amazon get richer, benefitting shareholders everywhere, especially those calling the shots in Washington D.C.
With new leadership in the US, will more strict relegations come into play? Will more small businesses be forced into bankruptcy as Jeff Bezos continues to get richer?
What Can You Do?
The good news is that you can support small businesses. Many small businesses offer their products or services online as well. Every purchase goes a long way. Resist the convenience of Amazon, and think about the people whose lives have been turned upside down over the last year. Everyone has been affected by COVID-19 in some way, shape, or form, but there are ways to make it better for some.
Supporting small businesses in your community or elsewhere is a simple way to help. Many small businesses have to turn to Amazon as a way to sell with the powerhouse taking a large percentage of the sale. At GSGF, we support small companies such as Annmarie, a clean skincare brand, and Brave Soles, an eco-friendly shoe company
