Why is Amazon expanding so quickly?
Amazon shopping needs a Prime army |
 | | Nicole Ginelli |
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Amazon is mobilizing a growing army to deliver packages to your door. |
My colleague Karen Weise wrote about a hiring binge at Amazon that has expanded its work force by more than 425,000 from January to October, to more than 1.2 million people, mostly in the company’s warehouses and package handling centers. |
Karen said this hiring spree was unlike anything outside of industries gearing up for war, and her article included bonkers numbers on the company’s rapid employee growth. As the holiday shopping season has kicked off, mostly online, Karen spoke with me about how and why Amazon is expanding so quickly: |
Shira: How did this happen? Does Amazon just need more people to handle our pandemic shopping? |
How unusual is it for a company to add more than 425,000 employees in less than a year? |
Labor economists and historians I spoke with were grasping for precedents. There were times in history when a single large dominant company hired like this: Ford early in the automotive era, the old Pennsylvania Railroad and the Bell telephone companies. But this combination of speed and concentration of work force expansion is extremely unusual. |
You wrote that starting in July, Amazon brought in an average of about 2,800 new people each day? How?! |
Right now, Amazon essentially does most hiring virtually. The company accepts job applications online, and then conducts online assessments with potential new hires instead of a job interview. You can get an offer without talking to anyone. |
How does working at an Amazon warehouse or package center compare with other jobs? |
It doesn’t compare to anything else, really. |
Working at an e-commerce warehouse is more physical than working in most retail stores — and you don’t interact with customers. But it’s also not like traditional workhouse work, which usually involves moving small numbers of very large items on pallets. Working at Amazon or other e-commerce warehouses is about moving a large number of small, individual items. Average pay at Amazon warehouses is higher than a conventional retail job but lower than a traditional warehouse job. |
It’s really a new kind of work, almost like replacing the labor of a typical store customer. Instead of you walking into a store, pulling a T-shirt off a rack and taking it to a cashier to pay and driving it home, people at Amazon are effectively doing those steps. |
That’s not why Amazon is hiring so quickly, but it now has employees in almost every state. The work force is the most potent political message that Amazon has, and the company knows it. It sends workers to meet with their local members of Congress, and the lawmakers are given a safety vest emblazoned with the name of an Amazon warehouse in their legislative district. |
Maybe Amazon isn’t crushing it? |
I have certainly believed — and maybe you do, too — that Amazon is leading the pack as Americans have waded further into online shopping this year. |
But I’ve been puzzling over some financial figures that suggest Amazon isn’t the unquestioned winner from the pandemic-fueled changes in our shopping habits. |
U.S. government figures show that total e-commerce sales in the United States increased by 37 percent from July to September compared with sales in the same months in 2019. Amazon’s e-commerce sales in North America in that same period rose at about the same rate — 39 percent. (Amazon doesn’t publicly release sales for the United States alone.) |
If Amazon were going like gangbusters, I would have expected its sales would be growing faster than everyone else’s. After all, that is what happened for years, as this tweet from an e-commerce analyst shows. |
For those who, like me, like to argue about numbers: The U.S. government and Amazon have different methods of counting that complicate the comparisons. And yes, Amazon is, by far, the largest online store in the United States, and it’s hard to grow really fast when the company’s numbers are already so large. BUT … |
Americans spend more than $700 billion each year on buying stuff online. Amazon’s e-commerce revenue in North America is about $215 billion annually. If the whole pie for the United States can expand rapidly, then Amazon’s very large chunk should be capable of expanding even faster. |
No one should worry about Amazon. The more Americans get into the habit of shopping online, the more it plays to Amazon’s strengths. But probably what we’ve seen this year is that as the pandemic has lifted all e-commerce boats, everyone’s vessel has bobbed a bit higher and Amazon has held steady. (To keen boaters, I apologize for this bad metaphor.) |
Everything shifted online in a bigger way in 2020. Americans are ordering groceries online from Walmart, face masks from Etsy, coffee beans from their local coffee shops, and sneakers, video games and hardware supplies. The whole market expanded and Amazon went along for the ride. |
- “No one understands how dire this is.” My colleagues Ellen Barry and Nicole Perlroth dug into the details of a Vermont hospital hit by a cyberattack, including staff members having to recreate chemotherapy protocols from memory. This might not have been financially motivated like many cyberattacks on health systems, Ellen and Nicole wrote.
- There is drug cartel TikTok: My colleague Oscar Lopez wrote about Mexican drug trafficking groups that showcase bejeweled guns, high-speed boat chases and fields of poppies in TikTok videos that are the latest twist of cartel propaganda designed to disguise the violence of drug trafficking and to attract potential recruits.
- This is the opposite of drug cartel TikTok: Starting with a young teacher obsessed with Disney and theater, thousands of people on TikTok — including Broadway professionals — are building on one another’s videos to create a musical theater adaptation of Disney’s “Ratatouille” movie. “This is no longer a niche TikTok theater joke,” one person told my colleague Christina Morales.
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