Amazon puts the heat on small businesses

  • The Baltimore Sun
  • Thursday, March 26, 2015 3:27pm
  • Business

BALTIMORE — Sandy Piper’s family has been merchants in Baltimore’s Hampden neighborhood for more than 40 years, but when she retires someday, she’s not sure there will be a business left.

Expenses have increased, customers aren’t spending more and online shopping has cut into sales at Sandy’s Bargain Center. Now, with the announcement that Amazon will launch one- and two-hour delivery in the city, she’s worried that even last-minute purchases won’t lure people into the shop.

“I can’t tell you what the future is going to look like,” said Piper, 51. “Hopefully I’m not out of business in 10 years, but if I am … it’s probably because of the Internet.”

Traditional retailers have long grappled with how to best adapt and compete in the online shopping age, and Amazon’s Prime Now is seen as yet another hurdle for Baltimore’s small merchants.

“Volume is everything in the retail business,” said Patrick Donoho, president of the Maryland Retailers Association. “Every time somebody clicks for Amazon, that’s a lost sale for a brick-and-mortar store. I call it death by a thousand clicks.”

The one-hour delivery guarantee will be available in coming weeks in select ZIP codes to Amazon Prime subscribers, who pay $99 a year for unlimited free two-day delivery on more than 20 million items. Consumers will pay $7.99 for one-hour deliveries. Two-hour delivery will be free.

Thanks to the opening in the next couple of weeks of a massive Amazon distribution center in the area, consumers will be able to get goods from toilet paper and soap to headphones, toys and TVs in short order at their doorsteps. Amazon said the service is focused on “daily essentials,” but also includes books, music, shoes, apparel and other purchases.

It’s expected to catch on in the Baltimore area the way it has in New York, the only place it’s available now, retail experts say. Amazon plans to continue adding Baltimore-area ZIP codes — and new categories of merchandise. It has similar plans for Miami.

“We will continue to listen to customers and respond to the items they need and want,” Amazon spokeswoman Kelly Cheeseman said.

The city and state offered Amazon about $43 million in job creation and property tax credits, as well as loans, to persuade it to put a warehouse in Baltimore.

City officials were “pleasantly surprised” that Amazon chose to roll out the one-hour service in Baltimore as one of its early markets, said William Cole, president of the Baltimore Development Corp.

Amazon has said it intends to hire about 1,000 people at the distribution center by the end of 2015, but the warehouse, with 2,000 parking spaces, has room for additional workers. Cheeseman said the company has hired additional workers for Prime Now but did not disclose the number.

“I would have to believe that if it is successful and continues to grow, that it will mean more jobs for Baltimore-area residents,” Cole said. “I just think it’s nice that Baltimore is at the front end of new technologies for once, as opposed to having to wait.”

Benn Ray, president of the Hampden Village Merchants Association, said it was “bad policy” to offer incentives to the company to locate in the city, given the threat to traditional retailers, which are reliable producers of tax revenue.

Ray, a founder of Atomic Books, said his comments may be a “tad hyperbolic,” but even more limited effects will hurt businesses.

“It’s all pure conjecture at this point, but Amazon initiating a one- or two-hour delivery in Baltimore City — there’s going to be economic impact and it’s not going to be good for anyone else that’s selling what Amazon has been selling. And what Amazon is selling is what everybody else is selling,” he said.

Cole said it is too early to determine Amazon’s impact on brick-and-mortar shops.

“It’s certainly impossible to evaluate the impact until you see how quickly this particular product penetrates the marketplace,” he said. “It’s something that we’ll have to evaluate.”

Ernestine Hohman, a longtime store manager, is one merchant who expects no ill effects.

“The majority of the people that live in our area (are) … hands-on,” she said. “They like to see what’s in the store other than those essential things.”

Donoho, for one, said despite his concerns about Amazon’s growth, he never expects online shopping to completely replace buying in stores.

“I don’t see brick and mortar going away,” Donoho said. “It’s the lifeblood of the community. … You need retail to make a vibrant downtown.”

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

Black Press Media operates Sound Publishing, the largest community news organization in Washington State with dailies and community news outlets in Alaska.
Black Press Media concludes transition of ownership

Black Press Media, which operates Sound Publishing, completed its sale Monday (March 25), following the formerly announced corporate restructuring.

Maygen Hetherington, executive director of the Historic Downtown Snohomish Association, laughs during an interview in her office on Thursday, Feb. 15, 2024, in Snohomish, Washington. (Ryan Berry / The Herald)
Maygen Hetherington: tireless advocate for the city of Snohomish

Historic Downtown Snohomish Association receives the Opportunity Lives Here award from Economic Alliance.

FILE - Washington Secretary of State Steve Hobbs poses in front of photos of the 15 people who previously held the office on Nov. 22, 2021, after he was sworn in at the Capitol in Olympia, Wash. Hobbs faces several challengers as he runs for election to the office he was appointed to last fall. (AP Photo/Ted S. Warren, File)
Secretary of State Steve Hobbs: ‘I wanted to serve my country’

Hobbs, a former Lake Stevens senator, is the recipient of the Henry M. Jackson Award from Economic Alliance Snohomish County.

Mark Duffy poses for a photo in his office at the Mountain Pacific Bank headquarters on Wednesday, Feb. 14, 2024 in Everett, Washington. (Annie Barker / The Herald)
Mark Duffy: Building a hometown bank; giving kids an opportunity

Mountain Pacific Bank’s founder is the recipient of the Fluke Award from Economic Alliance Snohomish County.

Barb Tolbert poses for a photo at Silver Scoop Ice Cream on Thursday, Feb. 29, 2024 in Arlington, Washington. (Annie Barker / The Herald)
Barb Tolbert: Former mayor piloted Arlington out of economic brink

Tolbert won the Elson S. Floyd Award, honoring a leader who has “created lasting opportunities” for the underserved.

Photo provided by 
Economic Alliance
Economic Alliance presented one of the Washington Rising Stem Awards to Katie Larios, a senior at Mountlake Terrace High School.
Mountlake Terrace High School senior wins state STEM award

Katie Larios was honored at an Economic Alliance gathering: “A champion for other young women of color in STEM.”

The Westwood Rainier is one of the seven ships in the Westwood line. The ships serve ports in the Pacific Northwest and Northeast Asia. (Photo provided by Swire Shipping)
Westwood Shipping Lines, an Everett mainstay, has new name

The four green-hulled Westwood vessels will keep their names, but the ships will display the Swire Shipping flag.

A Keyport ship docked at Lake Union in Seattle in June 2018. The ship spends most of the year in Alaska harvesting Golden King crab in the Bering Sea. During the summer it ties up for maintenance and repairs at Lake Union. (Keyport LLC)
In crabbers’ turbulent moment, Edmonds seafood processor ‘saved our season’

When a processing plant in Alaska closed, Edmonds-based business Keyport stepped up to solve a “no-win situation.”

Angela Harris, Executive Director of the Port of Edmonds, stands at the port’s marina on Wednesday, Jan. 24, 2024, in Edmonds, Washington. (Ryan Berry / The Herald)
Leadership, love for the Port of Edmonds got exec the job

Shoring up an aging seawall is the first order of business for Angela Harris, the first woman to lead the Edmonds port.

The Cascade Warbirds fly over Naval Station Everett. (Sue Misao / The Herald file)
Bothell High School senior awarded $2,500 to keep on flying

Cascade Warbirds scholarship helps students 16-21 continue flight training and earn a private pilot’s certificate.

Rachel Gardner, the owner of Musicology Co., a new music boutique record store on Thursday, Jan. 18, 2024 in Edmonds, Washington. Musicology Co. will open in February, selling used and new vinyl, CDs and other music-related merchandise. (Olivia Vanni / The Herald)
New Edmonds record shop intends to be a ‘destination for every musician’

Rachel Gardner opened Musicology Co. this month, filling a record store gap in Edmonds.

MyMyToyStore.com owner Tom Harrison at his brick and mortar storefront on Tuesday, Sept. 6, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Burst pipe permanently closes downtown Everett toy store

After a pipe flooded the store, MyMyToystore in downtown Everett closed. Owner Tom Harrison is already on to his next venture.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.