Consumers Beware: Amazon Monopoly Will Price Gouge | IBD

What ails the retail industry is no secret: Amazon. In 2016, Amazon sold six times as much online as Walmart, Target, Best Buy, Nordstrom, Home Depot, Macy’s, Kohl’s and Costco. Combined. In 2017, it accounted for nearly 50% of all online sales. Imagine where Amazon will stand in 2018 and beyond.

But while the e-commerce giant’s threat to retailers and their employees has become well-documented, the consequences of Amazon’s market consolidation have gone largely unexplored. As it capitalizes on book sales, food delivery options, and even cloud computing services, the $662 billion market cap company is nearing monopoly status.

What do you stand to lose as Amazon’s retail competition crumbles?

Purchasing power. When competition is eliminated, so too are incentives to keep prices low as a market disrupter. By destroying its competitors, Amazon is also extinguishing any repercussion traditionally associated with price increases — that is, a customer choosing a competitor instead of Amazon.

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Consumers Beware: Amazon Monopoly Will Price Gouge | Stock News & Stock Market Analysis – IBD.