Amazon Will Directly and Adversely Affect the Connecticut Marketplace

Amazon’s third plant is coming to North Haven, CT.

There’s an old saying: “We cannot change the wind but we can adjust our sails.”

Amazon is going to cause businesses to do some serious business sail adjusting, and even then, many will sink in the economic Amazon tsunami. Amazon’s third plant is coming to North Haven and will hire 1,800 people at first, but the number will likely increase to 3,000. Workers are lining up for these $15 per hour jobs, and they don’t need a resume, they complete an application form.

But the tough news doesn’t stop there. Amazon offers add-ons like 401K, tuition reimbursements, and flexible hours. Graduating students, part time seekers, full timers, seasonal workers seeking some extra holiday money (add in your current employees), will all feel the magnetic pull of the giant.

Connecticut has already become Amazon Country

Connecticut is home to some 12,000 businesses already selling products or services on Amazon., and they pay dearly for the privilege. Amazon has captured the Connecticut business marketplace online, and now they will capture your current and potential employees. Amazon routinely uses the information it gleans from sellers on its platform to directly compete against them, according to many studies. When sellers post new products, Amazon starts selling many of those items itself. My Point? Amazon isn’t going to play nice with you!

Plus, as the holidays approach they will need more employees to handle orders. With better than 1,800 people to be employed in the new North Haven plant, better than 500 in Windsor and those in Wallingford, you have more than Amazon just expanding their marketplace, they intend to be the marketplace. Let me assure you, this isn’t Chicken Little crying that the sky is falling; this is a hard business reality.

The Amazon business issues we face are hardball serious:

  • Unskilled workers will get $15 hour so an unskilled worker will be only $3.00 short of the semi-skilled guy running a machine. How is that going to come across to him?

  • An employee being paid $12 per hour can go to Amazon for $15, work full time and pick up nearly $5,000 per year extra plus other benefits. Your part time workers will do the same math and at half the hours will gain a few thousand dollars more a year than they make with you. How long do you think it will take for people to leave your company?

  • If you are running processes in-house, assembling products and materials, you will have to deal with these labor costs and defecting workers. If you go with a Temp Agency as a solution, even at $13 per hour the actual cost to use an unskilled, temporary employee will be more like $18 per hour for unskilled labor.

  • With Amazon building a new plant in North Haven they will have over 5,000 employees across the state. That is only going to grow and continue to draw the skilled, unskilled and semi-skilled workers that your company needs.

There is an alternative. Find yours.

As a business owner/leader you will need to find solutions to maintaining a profitable business, and serving customers in the wake of Amazon’s presence. As difficult as the situation seems, here at Atlantic Coast Fulfillment, I am confident that with clear thinking and guts you can deal with this whole issue successfully. I say that because we have done just that here in my company. Here’s what we’re doing.

I see this loss of labor to Amazon as way to support companies directly affected by it. Companies that have people working at getting materials and products assembled, packaged, and distributed will not be cost-effective due to higher wages and/or losing worker productivity. That will be even more hazardous with labor intense, specialized project needs. And how will all that play out when unique projects come along requiring a new way to be assembled and packaged etc. Who will figure that out? I am convinced that companies dealing with this issue not only face higher wages, costs and productivity, but they still have demanding customers who expect top of the line results regardless of how and what your labor force is paid. It’s bad enough to lose workers, but it’s fatal to lose customers.

Our approach relieves the wage, labor, productivity, and quality issues by offering those companies the alternative of out-sourcing their specialized needs to us. Over the years we have invested hundreds of thousands of dollars in specialized equipment. Plus, with our well-researched and tested methods and processes, we can still do the work better, faster and at lower cost than most companies can do in-house right now and when wages rise. This is no recent strategy; we have been working on it a long time. Having the right people and applying the measurable efficiency of proven processes keeps us ahead of the upward wage curve. Instead of just rushing to raise your prices, cutting staff, reducing hours, or scaling down benefits, you would be well served to find the least invasive solution for your business, and what we offer just may be the solution that keeps you profitable and productive. As always I am available to discuss the topic with you.

Wayne Suchy

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