Last Christmas, Amazon sold presents. This year, it will also sell live, 7-foot Christmas trees, too. It’s the internet giant’s latest venture in its quest to sell everything.
Jeff Bezos’ company has spent the past two decades growing massive. The bookseller became a digital marketplace, then a web services company, a competitor for Apple’s Siri, a movie streaming platform, and a grocery chain. It’s too massive, claim critics, who say the company is becoming a new kind of monopoly. Also massive are the live Christmas trees the company plans to start shipping in its hallmark brown boxes this November, the Associated Press first reported. Not packaged: the experience of picking out a tree in person with loved ones, the Christmas tree industry says.
“It’s a special thing for many families, the family togetherness,” Tim O’Connor, executive director of the National Christmas Tree Association, told The Daily Beast. “The ritual, if you will, of everyone getting together, taking the time to select their Christmas tree.”
But O’Connor said he and his organization welcomed Amazon’s move into the Christmas tree market.
“We recognize that online purchases are helpful and important and a part of people’s lives today, so we welcome Amazon as part of the Christmas tree team,” he said, adding that Amazon is “a customer of their farms, not a competitor. Amazon will buy the tree they sell from a local grower. The same tree that would be sold on a farm or at a retail location. Amazon is now a customer buying those same trees… It’s not competitive at all, it’s the market expanding.”
Eliane Wilk and her husband, Shawn, have been selling Christmas trees on the streets of Los Angeles for 40 years. Over the course of the season they usually sell 6,000 to 7,000 trees but expect that Amazon would eat into that.
“I think we would lose a percentage,” Eliane Wilk told The Daily Beast. “Ten to 15 percent, maybe.”
She said most customers would still come to pick out their tree in the festive atmosphere of their two stands, enjoying hot chocolate and getting a tour of the stock with a worker who helps them decide what tree is best. “It’s the personal touch,” she said.
According to an Amazon holiday book reviewed by the Associated Press, a 7-foot tree from a North Carolina farm will sell for $115.
O’Connor said the price was slightly higher than average, but not unreasonable. Tree prices vary by location, O’Connor said. His group conducts surveys of tree prices, the mean average of which is $75.
“My general reaction is that, in the places where I would anticipate people buying these trees, that price is probably a reasonable one,” factoring in shipping, he said. “For different people, that price point would be fine or too much.”
George Nash, who lives in Vermont and runs about 20 tree stands in Manhattan, was less optimistic.
“That’s just dandy,” he said derisively when he heard the news of Amazon’s plan.
Nash and his wife sell about 20,000 trees each season, with 50 or so employees depending on them for seasonal work. “They make very decent money doing this,” he said.
Nash said that he hoped the fact that they have a lot of repeat business and tailor cost of the trees to the income-level of the neighborhood would protect them from a big hit. He noted that Whole Foods, which is owned by Amazon, already sells trees, and that it is hard for them to compete because Whole Foods has fixed overhead costs.
“Maybe it will be OK,” he said. “What I’m really concerned about is that one day there’s only going to be one store in the world and it’s going to be Amazon.”
Indeed, most products available for sale on Amazon are from other retailers and critics argue that’s part of the problem. Although Amazon sells some products under its own label, its biggest business move has been establishing its website as the default online retailer. The company is expected to account for 50 percent of America’s e-commerce market by the end of 2018, up 20 percent from last year.
The digital domination has turned the site into a fighting pit for third-party sellers, who in moving to Amazon, give up some competitive edge, legal scholar Lina Khan argues.
“Because online platforms serve as critical intermediaries, integrating across business lines positions these platforms to control the essential infrastructure on which their rivals depend,” Khan wrote of Amazon in a highly cited 2017 paper, which made the case that Amazon was poised to become a new kind of monopoly. “This dual role also enables a platform to exploit information collected on companies using its services to undermine them as competitors.”
In other words, Amazon is acting as kind of a management company for a digital shopping mall, if that mall also sold its own line of goods against competitors inside. Amazon, the company that controls the mall infrastructure, will always have an advantage.
Take Amazon’s breakfast cereal sales, for example. A Recode investigation this week revealed that Amazon has increasingly placed sponsored products at the top of its search results. When a shopper searches for breakfast cereal, the top three Amazon results were promoted advertisements, paid for by cereal companies that wanted to come first in the search results. Amazon makes money every time users click on an ad, and advertising is the company’s fast-growing industry, Recode noted.
The next results were for “Amazon brand” cereal: in this case, cereal from Whole Foods, which Amazon acquired last year. Because Amazon owns the platform and the cereal, the preferential placement came free. Finally, underneath the promotions, were the organic search results for “cereal,” which are themselves subject to algorithmic jockeying between companies vying for the best reviews and search terms.
Companies might feel greater pressure to shell out for ads on Amazon. Few users click past the now ad-packed first page of search results, and “spending on sponsored products in Amazon’s search increased 165 percent in the second quarter of 2018 compared with a year earlier, according to data from marketing agency Merkle,” Recode reported.
Now Amazon users will be able to find full-sized Christmas trees in those same search results.
Wilk, the Los Angeles tree seller, said she hopes her expertise will keep customers loyal
“We make a cut in the trunk so the tree drinks up the water and we make sure the tree is in the stand the right way,” she said. “I don’t think Amazon is going to do it.”
But, she said, some locals will undoubtedly decide to order a tree with just a few clicks.
“It might be small at first but who knows what comes in the future,” she said. “People get more and more used to ordering on Amazon.”