Joe: You’re listening to the Being Found Show. If you’re not being found, then who is? We’re going to help you be found by more buying customers.
Let’s take a look at Amazon for a minute. They are making a significant impact on the world around us. Amazon is everywhere. They are working on getting into healthcare; they now own grocery stores, they are taking over the e-commerce economy. As a business, it would be at your own peril to look away from the effect Amazon has and to operate separately from that. Facebook, Google, and Amazon are monster companies, and you need to have a game plan if you want to survive as a business.
In his shareholder letter two years ago, Amazon CEO Jeff Bezos said he was looking to team up with banks that could help his company expand its lending program for small businesses that sell on Amazon’s websites. Amazon Lending, which launched in 2011, ultimately found a partner in Bank of America Merrill Lynch, according to people familiar with the matter who asked not to be named because the alliance is confidential. Partnering with Bank of America allows Amazon to reduce its risk and access capital specifically to provide credit to more merchants so they can acquire inventory. So essentially Amazon’s helping to push inventory.
Essentially they are taking the handcuffs or the limitations off companies who may be selling through them. This is like a car dealer offering loans to a car lot retailer so the car lot can have a lot more cars to sell.
Chauncey: In the case of Amazon, I’m not surprised because it focuses entirely on inventory and sales which is what Amazon is all about. In the case of Google, they dabble in a lot of things, and it always comes back to data. As well, Mcdonalds makes the bulk of their money off of real estate, not off hamburgers. Once you become a big company like that, it all becomes like a game.
Our government is recognizing that Facebook and Google have the world at their fingertips and the government is saying they do have some responsibility because of that.
“Amazon Lending is an invitation-only program that makes loans of $1,000 to $750,000, with terms of up to a year, for companies that may have difficulty landing traditional business loans. In June 2017, Amazon said it issued more than $1 billion in loans during the previous 12-month period, compared to $1.5 billion in combined loans for the four years prior to that.”
Joe: So these are short-term loans. Amazon is providing an opportunity to business who have a hard time getting loans through traditional business loans. This makes a lot of sense. We think of businesses as being brick and mortar and having a warehouse and all that. In my house right now, I could run a billion dollar product business and never even see the inventory, and I may not even have assets because that inventory is sitting in one of Amazon’s fulfillment centers. Amazon has warehouses and fulfillment centers.
Chauncey: From what I have read, for a while, Amazon was not actually making a lot of profit, Jeff Bezos was. The company itself was sort of reinvesting, and shareholders were not making a lot of money. They were just reinvested in this massive possibility for profit. There must be some major strategic goal here as basically funding their marketing as these companies grow on Amazon, therefore helping out their shareholders because the bottom line is getting money for shareholders.
Joe: This isn’t just affecting local retailers; this is affecting all businesses. This isn’t going away, and if you want to be found, you need to do something about it. This is the start of a new world.
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