A Reckoning for Amazon? Financial Expert Jeff Yastine Explains.

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jeff yastine amazon reckoning
Is a reckoning for Amazon on the horizon? Jeff Yastine thinks so.

For most people, Amazon is a convenient place to do some shopping. However, business and financial experts understand that Amazon’s convenience has a more sinister bent. Moreover, the era for said convenience may be coming to an end.

That is the argument posited by Jeff Yastine. Yastine is the current editor of Total Wealth Insider, which is a publication by Banyan Hill Publishing. Yastine leads the publication, fostering its goal of education regarding current investment trends and the latest financial news. In this regard, Yastine has experience in both journalism and finance. He has a long history in the industry, having studied journalism at the University of Florida before taking a position as a television reporter in North Carolina. By 1993, Yastine’s career was moving upward, and he nabbed a spot on the respected PBS program “Nightly Business Report.”

Therefore, Yastine’s most recent thoughts about Amazon should be taken seriously. Given Amazon’s dominance in the market, predictions of trouble for the company may seem overstated to most. Indeed, Yastine’s voice of reason may sound silly when joined by bombastic tweets from President Donald Trump, who has sharply criticized the retail giant.

However, Yastine’s persistent point is not based on hyperbole or fearmongering. Instead, Yastine’s prediction is based on a keen understanding of antitrust laws and an awareness of worldwide financial news. According to Yastine, Amazon’s time of unchecked power may be coming to a necessary close.

First, in order to understand Yastine’s view on Amazon, it is important to understand the purpose of American antitrust laws. Antitrust laws are designed to promote fair business practices. In essence, these laws are intended to keep one company from using unfair practices that create market dominance. America is heavily rooted in free trade, which is why some people may question the need for regulation. However, cases like Amazon prove why antitrust laws are important. Some companies use practices that do not benefit the market or the consumer. Instead, these companies use practices that promote their own interests to an unfair extent. When this happens, competition begins to die out, and the consumer is impacted. In order to protect free trade, antitrust laws kick in.

For years, Amazon has avoided this issue, and the company’s rise has been a story of American success. However, Yastine is quick to point out that this rise is facing serious backlash lately. Consider the comments from Bill Simon, the former CEO of Walmart.

As a financial journalist, Jeff Yastine has gleaned information from the brightest financial minds in the world. He has interviewed famous economic thinkers like Warren Buffet, Michael Dell, Sir Richard Branson, Steve Ballmer and Nobel Prize laureate Richard Thaler. Although Yastine did not interview Simon himself, he is still able to accurately assess what Simon is trying to say regarding current business practices used by Amazon.

In an interview with CNBC, Simon describes Amazon’s practices as “anti-competitive” and “predatory.” Some people may think that Simon is only jealous, given that his company directly competes with Amazon. With his ample experience in the field, Yastine has a different perspective.

To explain his position, Yastine has drawn up facts regarding the current state of business in America. Last year, 26 major retailers filed for bankruptcies. These are not small companies, but these are companies with more than $50 million in liabilities. In 2018, other prominent retailers have declared bankruptcy as well. This includes Claire’s and Bon-Ton. Yastine acknowledges that these companies are failing because of their own poor business choices. Even so, Yastine argues, that does not negate Amazon’s influence.

According to Jeff Yastine, Amazon has an advantage that these companies simply cannot replicate. Amazon is a platform business, which sells a little of everything. With so much inventory, it is possible for Amazon to match the competition and easily out-price them. This is the predatory pricing that Simon was describing, and it undercuts the competition and effectively ensures Amazon’s dominance.

For years, Amazon has been rewarded and even celebrated for this practice. However, it is this rise to the top that may eventually be Amazon’s downfall. As Amazon’s pricing platform continues to weed out the competition, the company’s dominance becomes a key target for antitrust charges.

If this sounds impossible to the American consumer, Yastine is quick to remind people that such moves are already happening overseas. On March 15, Amazon’s offices in Japan were raided by an antitrust watchdog group. According to official reports, the raid was conducted based on suspicion of antitrust violations. Amazon was suspected of using its suppliers to pay for the steep discounts offered on its online shopping platform. Essentially, Amazon was being accused of offering discounts to promote sales but not carrying the financial burden of said discounts. In this manner, Amazon was able to gain all the benefits without shouldering any of the costs.

Given that this news is from Japan, some people may not think it is relevant in the United States. However, there are signs that Amazon is facing the same trouble at home. Simon’s comments are indicative of the turning tide against Amazon. The tweets from President Trump are also noteworthy. It may be easy to overlook such tweets as over-the-top, but the tweets indicate that the government is aware of and concerned about Amazon’s practices. Indeed, if the current administration wanted to, pursuing antitrust action against Amazon is entirely possible and probably justified.

Yastine has been explaining this for years. “The stirring of antitrust activity goes hand in hand with overheated markets that only amplify the power of a few companies that become too big, too dominant,” he said in an interview last year. “In a word, too powerful.”

While comments from Simon and President Trump may be easy for some to overlook, Yastine’s professional assessment should be regarded more seriously. Given his expansive experience in financial journalism, Jeff Yastine understands the ebb and flow of the market. His assessment that Amazon is due for a reckoning is likely to prove true sooner or later.

For the latest on Jeff Yastine’s financial and stock predictions, connect with him online at Facebook, Twitter and LinkedIn.

 

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