November 14, 2018

Amazon Eats "Local" for Lunch & Real Estate is On The Menu

Amazon's core business is disintermediating previously geo-zoned small-to-mid businesses through economies of scale, computing power, and fullfillment logistics.

In other words: Amazon competes with and replaces "local business". Ask any small-to-midsize retailer. Amazon doesn't need a local footprint; in the retail market they use UPS, USPS, and Fedex to manage the last mile. For Amazon, tech makes "place" irrelevant.

Mayors and County Executives have distilled and delivered to Amazon extremely comprehensive info on local markets, infra, and incentives. Amazon now has the playbook for corporate real estate markets in every major American city, and they got it free. Your tax dollars payed for the complication and transfer of knowledge. Local politicians gave it away.

Losers will be the previously-local winners (soon to be known as legacy placeholders) in the corporate real estate markets, just like local business is the loser in every market Amazon offers. Second-tier losers will be the local law firms that service local corporate real estate companies.

Economics (it's been said) is the story of who eats whom, and today's menu focuses on local real estate sellers and developers.

Ironically, local real estate companies are major financial supporters of the Mayors and County Execs who just threw their industry and their well-heeled livelihoods under the bus. Third-tier losers will be politicos who benefited from local real estate's corrupt largesse.

Imagine local politicians giving away the knowledge base of local business in other contexts - say, manufacturing. They'd be burned in effigy and turned out of office.

Might be fun to watch, except an economy more focused on Amazon is not really good for anybody but Jeff Bezos.

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