The Rise of “Mom & Pop” Businesses

I know one of the ranting points of many folks is how the “mom & pop” business have almost disappeared from America. But according to an article I recently read they are mounting a very striking comeback. Thanks to Amazon!

Several of the items I have purchased recently are obviously from small and medium sized business. Amazon encourages small businesses to engage with them. They are not like brick and mortar stores who have only so much shelf space. Customers don’t have to roam down isle after isle to try to find what they are looking for. Amazon is an ideal place for small businesses.

Of course I realize that Amazon wants their share of the profits for their small business sales but really they are not much different from most brick and mortar business in that regard. According to USA Today, Amazon has helped 1.9 million U.S. based small and medium sized business (SMB) to generate more than $160 billion in sales in 2018. The number of SMBs with more than $1 million in sales grew by 20% last year.

Amazon is indeed good for many small businesses. But that isn’t just some making your stuff, it also include authors who self-published books. They made about $260 million for their prose. Publishing a book used to be an expensive proposition but now with e-books, even I am contemplating becoming a “published author”.

And that is still not all that Amazon offers small business. They are now encouraging entrepreneurs to build, with Amazon’s help, their own package delivery services.

I remember when Jeff Bezos first started Amazon, he impressed me by stating up front that Amazon would not be issuing any dividends. Instead he would be plowing all profits back into the company. He definitely had a LONG term view of what he wants his business to be. His view of the company made me buy some Amazon stock. I wish I had bought much more than I did!

Being a database guy myself, I can appreciate how he built efficiency into his business model. Thanks to his unique database algorithms he managed to do what no one else even envisioned. A big part of his recent profits are providing that structure to other businesses.

I’m pretty sure that an Amazon type business model that will dominate 21st century sales of goods and services. Just like so many other jobs today, you don’t have to be physically located and any particular part of the country to be a successful business anymore.