PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

U.S. Tech Empowers Small Business

By at 14 May, 2024, 4:25 pm

by Raymond J. Keating –

Many misguided assumptions continue to swirl in and around political and policy circles about large businesses, especially so-called “Big Tech.”

Basic notions about business, consumers and the free enterprise system seem to be forgotten or ignored. For example, that businesses can only gain and keep market share by offering goods and services that consumers want or need. Even the largest business must compete against current, emerging and future rivals (domestic and international), and history shows that if they stagnate or falter, even the largest firms will decline and perhaps fail. That reality is only intensified in today’s dynamic, fast-changing marketplace.

For good measure, among the customers of large firms are small businesses. And the small business part of this story doesn’t stop there, but it turns out that small businesses serve and partner with large businesses, including “Big Tech.”

That’s clear from the latest edition of Amazon’s “Small Business Empowerment Report.” There is a wealth of information here about the relationship between small businesses and Amazon. Consider a few key takeaways:

● Amazon is an astounding marketplace for small businesses. Over 60 percent of sales in Amazon’s store come from independent sellers, and these sellers overwhelmingly are small and mid-size businesses. Independent sellers in 2023 sold more than 4.5 billion items.

● Independent sellers in the U.S. averaged more than $250,000 in annual sales via Amazon. For good measure, more than 10,000 independent sellers topped $1 million in sales for the first time.

● As is widely known, small businesses are the main source of job creation in our economy, and, as noted in the Amazon report, “independent sellers in Amazon’s store employed more than 1.8 million people in the U.S. in 2023.”

Of course, Amazon understands the importance of working with these independent sellers. The report highlights a host of services offered to independent sellers, such as advertising and promotion tools; global sales services; and Fulfillment by Amazon, which “allows independent sellers to have Amazon provide the storage, picking, packing, fulfillment, and customer service for their orders.” The point is that, as in any partnership, when one party does well so does the other.

The Amazon report reflects the reality of how businesses of different sizes interact in our economy, from competition to cooperation. And one word in the title of this Amazon report – “empowerment” – better captures the economic realities of small businesses interacting with and tapping into the tools leading U.S. technology firms.

Our economy is deeply integrated and interrelated, and when government takes misguided, costly actions against one group of individuals or businesses, the negatives don’t stay within the walls of those targeted businesses, but spread far and wide. Yes, that means that uninformed policy attacks on leading U.S. technology firms create real costs for America’s entrepreneurs and small businesses.

View the new interactive site map and download Amazon’s 2023 Small Business Empowerment Report.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His latest books on the economy are The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist, The Weekly Economist II: 52 More Quick Reads to Help You Think Like an Economist and The Weekly Economist III: Another 52 Quick Reads to Help You Think Like an Economist.

 

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