Amazon making major profits amid the economic impact of coronavirus pandemic

The tipping point happened when the World Health Organization declared the COVID-19 outbreak to officially be a pandemic on March 11. Immediately, like a chain reaction, businesses began closing down, states started to ban mass gatherings, and schools and colleges began to shut down. Gyms, theaters, non-essential businesses, pretty much everything is closed.

It is estimated that 1 in 5 American workers have found their hours reduced, or are suffering from financial setbacks, according to a new poll. It seems as though almost no business remains unaffected, with the coronavirus pandemic closing down everything from major retailers such as Nordstrom to thousands of small businesses.

What company is benefiting from all of this panic? Amazon. Contrary to other businesses, Amazon is seeing a huge spike in its online business, leading the company to announce that it will hire an additional 100,000 workers to meet the demand it is facing.

Source: www.personneltoday.com

“In addition to the additional 100,000 new roles we’re creating, we want to recognize our employees who are playing an essential role for people at a time when many of the services that might normally be there to support them are closed. In the U.S., we will be adding an additional $2 USD per hour worked through April from our current rate of $15/hour or more, depending on the region,” the company writes.

It is good that Amazon is hiring more staff, and increasing pay, but it is still unknown what will happen to these people when Amazon begins to lose the demand it has now, as brick and mortar stores get back on their feet. However, will brick and mortar stores be able to recover from the economic impact of the COVID-19 pandemic? History suggests that Amazon’s sudden spike in demand may continue long after the pandemic dies down, due to “online shipping addiction.”

The major issue in people shifting towards Amazon is the long term affects of online shopping. It is a well-known fact that once people get hooked onto shopping online, it is hard for them to shift out of said addiction. Amazon has already been attributed to the death of many major retailers such as Toys “R” Us and Sears. With the pandemic literally pushing people towards Amazon, will brick and mortar stores regain the foot traffic they had before once the pandemic dies down?

Source: www.bostonmagazine.com

It was also reported earlier this week that Amazon will stop receiving any shipments other than medical and household goods, obviously due to the massive demand in these segments. As retailers run out of stock and people start to take social distancing seriously, the entire country is turning to Amazon to purchase basic household items.

The Trump administration is considering making around $250 billion available to small businesses in order to cushion the impact of the economic downfall the country is facing. One fact is clear – Amazon is in a position to make a major profit while almost the entire country is facing economic loss. It doesn’t ease our minds that Amazon also has been accused of avoiding paying taxes, by exploiting tax laws to its advantage. Even if we all begin to hate Amazon, in the current scenario, we still depend on the online retailer to get us the items we need. Way to go, Amazon.

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Source: Inverse

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