Jason Carpenter Explains the Economic Impact of Online Shopping

Buying items online has slowly become the new norm for millions of Americans who have completely turned to companies like Amazon and eBay. Consequently, this is causing a lot of brick-and-mortar stores to go out of business due to their inability to attract customers who are unwilling to make the trip to their location. Nevertheless, it is also opening up new opportunities for them as they shift into the field of online sales themselves.

For instance, Walmart used to be a company that strictly sold items in its stores around the nation. Nowadays, however, they also allow people to buy things online and have them delivered to their residence. So, the effects of online retailing range from very positive to some very negative consequences. Thus, what is the overall impact of this trend on the local economies in areas where online sales are growing fast?

Difficult Era for Small Businesses

According to a seasoned retail manager Jason Carpenter, the rapid pace of online development has caused many small businesses to lose their market share and struggle to maintain profitability. In some cases, relocating or looking for new strategies is necessary to keep up with conglomerates and businesses that are taking over the world via the internet. So, how exactly does this happen and why?

First, the "how" portion of the question is quite easy to explain. Online retailing is effortlessly taking over the market through innovation and access to a wealth of assets. For example, instead of relying on traditional outlets and stores, these companies leverage people's growing interest in smartphones, computers, and similar technology to their advantage. The way that they do so is by integrating into average people's devices and constantly marketing their products to them. Consequently, people are more likely to make transactions because the product they want is right at their fingertips.

As far as the "why" part of the questions, however, the answer does seem to be a bit more complex. After all, it is hard to explain why individuals who used to buy things in stores are now turning to online purchases so quickly. One could label this a pure byproduct of human laziness that causes people to settle for having things delivered to them. Regardless of the explanation, it is hard to deny that the impact on the economy is quite negative given the level of difficulty that smaller brands in the area have to face to succeed.

Loss of Revenue for the Municipalities

Another downside of growing online sales is the fact that they are costing municipalities around the nation a lot of money. According to Jason Carpenter, this is best explained by showcasing the way in which Amazon operates. Although they are a multi-billion-dollar company, they only have a few headquarters that are distributed around the world. So, they continuously operate in almost every country worldwide while only holding a few physical locations.

Well, the absence of those stores means that the local government cannot charge them property taxes, expect them to hire people who live in the area, nor expect them to be involved in any community events. This also has major tax implications for the areas in which Amazon does not have an HQ. So, they are losing out on many benefits that traditional brick and mortar stores would have brought to the area.

Easy Access to Business

Even though there are a lot of negative effects of online sales, one can always find a silver lining. In this case, it would be the fact that people who are passionate about starting their own business can do so much more easily. For instance, opening up a product or service-based store used to require a physical location, long-term leases, and so on. Nowadays, however, using the internet to establish an online brand is one of the most common ways in which people get started. Thus, the accessibility to business for those who have an entrepreneurial spirit is better than ever before.

Similarly, accessibility to established companies that operate online means that people will be able to purchase things even when they may not be in a position to visit a store or find it in their city. Someone who lives here in Waco, per se, may realize that purchasing a vehicle is quite difficult since the market is rather small. So, they can rely on online dealerships from other cities who are near Waco to find their dream car. That way, the online market will help the local economy thrive by opening more alternatives for the paying customers that are in need of items that are not sold in-store.