The announcement that Amazon Business is opening up in Germany was interesting, and there is no doubt that the firm has a lot to offer to the corporate buyer. As a solution to some of the traditional tail-spend issues facing procurement departments in large organisations, Amazon could be an interesting solution.
The firm remains one of the most innovative organisations in the world, as their test retail store showed (see our article yesterday). However, it will be interesting to see if this move into being a supplier to the corporate world (rather than to the consumer) places some additional and unwelcome focus on Amazon’s business practices and approaches.
Tax issues are complex of course, but in the past Amazon has been criticised for paying less tax in certain countries where it has major sales by channelling the revenue through others. However, itv.com reported last year that Amazon “pays all applicable taxes in the countries in which it operates and, since May, has stopped channelling British sales abroad. Its tax arrangements in Luxembourg are currently under investigation by the EU to ensure they don't amount to state aid”.
Then there are the stories about tough conditions in their warehouses, and staff on low wages sleeping in tents to save the bus fares from their homes to their Amazon work place. However, that story seems to have been based on pretty flimsy evidence … “he had opted to stay in a tent as it was easier and cheaper than commuting from his home in Perth, although his camping equipment had disappeared by Friday afternoon. Another tent appears to have been abandoned, with rubbish, discarded sleeping bags and cans of cider among the items strewn around nearby”.
However, just as Apple (probably unfairly) gets more publicity for working conditions in its Far East factories than other manufacturers, simply because it is the market leader, then Amazon has become the shorthand for all the issues around people doing repetitive jobs in large warehouses. We suspect the firm is no better and no worse than many others, but it is the name everyone recognises.
And as the Amazon moves into the world of becoming a corporate supplier, it may find it comes under even more scrutiny from those corporate customers, who are more interested than ever in social responsibility-type issues. Those potential customers may well ask – is Amazon a force for good or evil in the world? Have they been responsible for putting lots of bookshops and record shops out of business, or spurred on other retailers to become more efficient and distinctive? Are they creating a publishing monopoly or helping prospective authors get into print for the first time? Do they offer amazing choice, convenience and value (for people with mobility or health issues, the firm has been a godsend), or are they creating a huge monopoly with more power than is healthy?
We suspect Amazon will put more effort into its own CSR efforts as it moves into the business-to-business world. It may look to become a better local citizen wherever it operates, and a better customer to its own suppliers, as well as being a great supplier itself. So perhaps more scrutiny from the best CPOs in the business will actually help Amazon become an even better firm.