Meet the biggest market disrupter of them all: Amazon.com

Contributing writerDecember 9, 2012 

The biggest and most reliable generators of business news around these parts used to be giants such as The Boeing Co. and Weyerhaeuser. Later, Microsoft elbowed its way onto the scene; add in other high-profile producers of news such as Starbucks and Costco, and there wasn’t a lot of oxygen left for other businesses, even those of some heft.

Many of those companies still attract attention for their global importance and local size (Weyerhaeuser less so, because it has downsized itself and forest products are not a sexy industry). But all of them might feel a bit crowded out of the frame these days by a company that wasn’t even in existence before 1994 – Amazon.com.

Look, there’s Jeff Bezos on the cover of Fortune magazine as its executive of the year. And over there, that’s Amazon being pilloried (along with others) in a lengthy New York Times series on businesses playing the game of economic-development incentives. Here’s news on Amazon battling it out with Apple and Microsoft and Google in the tech-gadget world (tablets and e-readers today, maybe phones tomorrow). Here’s more on Amazon gobbling up half the real estate in Seattle’s South Lake Union area for its headquarters offices. Here’s today’s news on some organization or group mad at Amazon about something.

And now here’s Amazon in our own News Tribune as the center of speculation over a large-scale industrial development in DuPont that might become the online retailer’s second Pierce County facility; its first, in Sumner, opened just last year.

What was the name of that airplane company again? They up to anything?

One of the business buzzwords of the moment is “disruptive,” and it turns out to be a useful and frequently employed term for considering the Amazon saga.

Maybe you can compile a list of companies that can match the breadth and depth of Amazon’s disruptiveness in so short a period, but it’s not likely to have a lot of entries.

The retail industry can attest to how dramatically Amazon has reshaped the sector, forcing well-established and much bigger retailers to chase after it into the online realm if they wanted to retain customers and sales.

Remember, also, that many thought Amazon was just another dot-com flash in the pan that would be swept aside when the bust arrived. Amazon was fine. That it could handle huge volumes of online sales competently and make money at it proved hugely disruptive.

Amazon survived in large measure because it wasn’t willing to stick with books, CDs and DVDs, but instead moved into tech products (Kindle) and services (cloud computing and data storage).

More disruption ensues for those who thought they had those segments to themselves. Lately Amazon has been a disruptive influence in real estate as it aggressively opens even more warehouses and distribution centers such as the one in Sumner and now possibly DuPont.

Microsoft reshaped the commercial real estate market for the Eastside of King County. Amazon’s influence is felt nationwide, which is one reason it frequently finds itself in the midst of debates over incentives for those facilities and what sort of economic benefits they actually deliver.

It’s done all that while developing a corporate image and culture that is short on warm and fuzzy feelings.

Amazon isn’t known for being lavish in compensation to workers. Its willingness to sacrifice short-term margins to establish itself in new business annoys some on Wall Street who want gaudy quarterly numbers. It’s been in fights with other retailers and government officials over the collection of sales taxes. Its relations with book publishers have been at times been contentious. Same with some of those who sell through Amazon. Ditto with state and local officials who lust after Amazon facilities in their communities.

That it doesn’t mind a bit of chaos, controversy and confrontation could prove just as disruptive if Amazon continues to have success with that model.

With Amazon, the understanding is that disruption comes as part of the deal along with the package on your doorstep or the latest distribution center in your nearby industrial park.

Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at bill.virgin@yahoo.com.

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