Little things might add up for small businesses vs. Amazon
“Amazon is giving a kick in the butt to a lot of business owners to increase compensation,” says Gene Marks, owner of The Marks Group, a small-business consulting firm in Bala Cynwyd, Pa.
Small businesses near Amazon’s dozens of order fulfillment centers vie with the company for staffers, and the competition will become even fiercer during the upcoming holiday season, when Amazon needs an extra 100,000 people to pack and ship boxes.
Amazon is “doing what they need to do to get employees,” Marks says.
The company, whose market value briefly topped $1 trillion last month, has another motive — placating critics, including some politicians who have called on Amazon to give its employees a raise.
The strong economy and shrinking labor pool has made workers hard to find for employers of all kinds, including big retail chains, fast-food restaurants and small businesses. Some are boosting pay. But higher wages are harder for small businesses to absorb because they don’t have the massive revenue stream of a company such as Amazon.
Meanwhile, small retailers who sell on Amazon expect the internet giant to increase the fees it charges them to help fund the salary increases. But small-business consultants, and owners themselves, say strategizing can help lessen the pain.
Here are three things small-business owners need to know about Amazon’s wage hike:
Owners should say to prospective employees, “We may have a little difficulty giving you the full $15, but what else can we do for you?” says Brent Leary, co-founder of CRM Essentials, a consulting firm.
With fewer workers to juggle, small businesses can more easily offer flexible schedules, transportation or other perks that might make up for slightly lower pay. And companies that employ people in their 20s and 30s find that many of their staffers would prefer more benefits to extra pay.
Moreover, “if you have to increase your prices, your competition probably has to also,” Marks says.
Companies that have to raise prices should be upfront with customers about why it’s happening, Leary says. That will help preserve a good relationship with their customers.
“The reality is, selling online and running a business requires forward thinking and nimble adaptation to current trends/opportunities,” Haver says.
Many owners may look for cost savings elsewhere in their company, perhaps finding cheaper supplies or lower shipping costs.