The part Kenny show on news talk with Marter private network during current restrictions. Don't ignore your health concerns. Our expert team is ready to help. A fulfillment center sounds like an upmarket spa with a bit of mindfulness thrown in, but if it's an Amazon fulfillment center, it's basically a huge warehouse where your shopping orders are fulfilled. And Amazon's announcement of a fulfillment center in Ireland came with much excitement for job seekers who might get to work there and shoppers alike who expect their orders to be delivered more promptly.
But will the fulfillment center kill small business as we know it? I'm joined now by professor of economics at Desu Business School, Edgar Morgenroth and Marcus Earls, a spokesperson for Books Upstairs Bookstore, and they recently launched their own online store.
Good morning and welcome to you both.
Edgar, first of all, you're looking at the economics of this thing and how it might affect the larger retail picture in Ireland. Is this a good thing or a bad thing?
This morning, Pat, I think this is a worrying thing, it's not new, of course, you know, online shopping has taken a greater share off of the sort of market over the years now over the last 10, 15 years. And, you know, Craigslist obviously has made it difficult for for Amazon to trade out of the U.K., into Ireland. And we were getting our stuff from from the U.K. So they have responded to this, but they didn't in business to make money.
And they make a lot of money.
And as we know, you know, Jeff Bezos, the richest man in the world, you know, they really do know how to make money.
And they make this by displacing traditional retail.
And in the Colvert crisis, we've been sort of stuck trying to shop a lot online and they are trying to capitalize on that.
And ultimately, that's going to decimate retail, particularly in the smaller towns. But also, I think in in the bigger cities.
And it's going to fundamentally change the way our town centers are going to look now.
Currently, Amazon uses unpassed to deliver its stuff from wherever if it's traditionally the U.K., but it could be German, it could be anywhere.
And now, obviously, in terms of working out the tariffs and the VAT and all the rest of it, it just makes it more complicated. It doesn't make it any less profitable for them to trade from the U.K., but a lot more tedious and a lot more form filling and all of that origins and all have to be sorted out.
So it suggests to me that if they do set up this fulfillment center, that using compost locally, that people will get their stuff much more quickly. That's probably going to happen more quickly, and I think in general, this is one thing that you have to say for Amazon is that their customer service is very good and that they have built their market share on the basis of their customer service. So the speed at which you're going to get it, how complaints are going to be dealt with, if there are any and so on.
And of course, the force, that kind of customer service focus on their resellers as well. Of course, they don't just sell themselves, they're marketplace. So that's that's what they have been focusing on.
And clearly with breaks, that was going to be difficult.
You know, they were likely to have more complaints, more delays, et cetera. So in that sense, it makes sense for them to to have an operation in Ireland to to to actually deal with that.
Even the question of returns, if they're more expensive things that would be subject to tariffs and then the telly you buy is problematic and you have to send it back.
Is there a tariff applied on its way back into the U.K. and then back again to you just to too much trouble so you can see why they're doing it.
But is there an opportunity for Irish retailers who have either currently an online presence or could generate one to piggyback on Amazon's distribution system as resellers?
Is that an opportunity? Well, there are a lot of reasons using the Amazon platform. The one thing, though, about that is that that Amazon make sure to make money out of that as well. And the way to set up that system is that those resellers will never be able to undercut Amazon itself. So if you if you were to buy a book from a reseller that will never be cheaper than if you were buying it straight from Amazon so that they set it up in that way.
And, you know, the way Amazon deals with customers is great. But the way Amazon deals with with both their employees and and resellers that use the marketplace is perhaps not as great. And and so it's probably better for Irish retailer to develop their own platform. But then they're competing with this big platform and that's that's going to be the problem for them.
And one of the Newstalk texta says Amazon Open here is fantastic news. Until Little and Aldi arrived here, we were known as Treasure Island because we were charged way more than similar EU countries. Amazon will employ people, pay rent, pay tax, like other Irish businesses. It's a win win for customers. Bring it on, says Tony in Galway.
Well, we should now talk, given you mentioned books and how can you cut at the Amazon price? Morrisroe, spokesperson for books upstairs who have also an online presence recently developed. What do you say, Maurice, to add the notion that you can never undercut Amazon? Therefore, as a reseller of books, there's no money to be made. Yes, I think it's true that you can't undersell Amazon and you have to find other ways of surviving as a business.
There have been many challenges to retail over the years. And, you know, from the British based, highly capitalized companies that arrived in the 80s to the ready made suit before that and even before that, the department store. But this is of a completely different order. And Amazon is laying waste to the retailing scene around the world. Our booksellers like myself have had to deal with the presence of Amazon for a long time and were perfectly aware that it's not going away.
It's a question for society as to whether it should be regulated and whether there are any rights available for the third party sellers on the Amazon platforms. But that's a separate question. Yeah.
And for example, if people go into a bookstore, a traditional Irish bookstore, and it's one of the great pleasures in life is to browse in a bookstore. So you'll get people going in, they'll thumb your books, and then they'll go home and order online from Amazon, you know, the latest bestseller for, you know, 20 percent less.
Well, that's that's that's the sort of nightmare scenario. I think that our approach to book selling gives us a fair chance of avoiding the worst effects of the Amazon steamroller. It's a little more complicated than just being a showroom. And people think don't all think that way. Books Upstairs is the oldest independent bookshop in Dublin. We carry a large and very carefully chosen stock and our website books upstairs study is an extension and reflection of our social and bookselling values.
People like myself and my colleagues, we're integrated in the local culture. We're aware of the importance socialist interests that people have. We're aware of our arts, our history, our politics, and above all, our books. They're an important part of our daily lives. People like us and booksellers like us were of the, as it were, of the cultural soil. And that's simply impossible for a global behemoth like Amazon. Now, our experience is that people react positively to that and we are quite optimistic about our future.
One of the things, of course, is that Amazon, when they're flogging a book to you, it'll probably be something in the top 20 best sellers, you know, the latest thriller, the latest kookery tome, whatever it might be, they are not likely to have that book on nuclear physics that will have an audience of perhaps 10000 rather than 10 million.
It's the no, they won't have that. And they won't be selling that on price. They won't have the history of Stepaside and they won't have the local poet and they won't have the you know, the particular things that would be of of interest within our culture. And if they do have them or can get them from you through third party seller, they'll charge you for them so you can simply walk into a bookshop like ours and pick them up. And many people find that convenient.
And they like the experience of engaging with a bookshop which is culturally committed.
I'm just wondering whether or not the bookshop has another future. When I think of the petrol forecourt where flogging fuel was the only man. Now it's groceries, things that you need your milk, your butter, your eggs, whatever it might be. It's a bottle of wine when you need it. It's something other than the traditional forecourt. I mean, are we talking about the bookshop as cafe meeting place, place for, you know, many other activities?
Exactly. That's what that's that's exactly what we do. We're a literary centre. We're a cafe and we're a bookshop. We have events. We have readings, we have discussions with Guffey, with books and people. It's a pleasant experience for people to have to to come to us. Our challenge at the moment during lockdown is with books upstairs is to extend that that that feeling in that culture online. And we've gone to a lot of trouble to try and do that and to try and convey the same values.
And we have things like themed book bundles for people in lockdown where they tell us the kind of things they're interested in. And then we select some books for them and they have the excitement of opening these, which we wrap specially and adds a bit of a bit of pleasure to and lockdown.
Finally, at what's your website address if people want to order a line from you?
Yes, it's books upstairs datasheet. Couldn't be welcome, Marcus, thank you very much for joining us, Morris Earle, spokesperson for books upstairs.
And Edgar, finally, is Morris being unduly optimistic or is there, you know, a tough time ahead for people like him in all aspects of retail?
I think I mean, individual businesses respond and and there will be niches.
But what I'm worried about is the sort of general picture that, you know, a company that is essentially looking to become a monopolist, you know, will displace a lot of local shops. And, you know, the landscape, the shopping landscape that we're going to be left with is going to look a lot different. And there's a question as to whether you can generate footfall in towns and cities for whatever is left. And I think that that's a worrying thing.
And I think Morris sort of hinted at that. There's a there's a regulatory challenge here.
If Amazon is a monopolist, then prices will ultimately rise.
And, you know, it's not going to be a panacea for for consumers forever. And at that stage, a lot of our other retailers will actually be gone.
So we have to be a bit careful there. Edgar Morgenroth, professor of economics at DSU Business School, and before that, Marsar, a spokesperson for books upstairs at. Thank you both very much for joining us.