The So-Called "Bidding War"

The Size of Amazon

        It is no secret that Amazon is one of the best online shopping sites available in society today. Amazon is an undisputed leader in the e-commerce industry; leaving competitors in the dust. As seen in the chart to the right, Amazon continues to dominate the online shopping industry. By focusing on customer satisfaction, Amazon has differentiated themselves from competitors such as Walmart and Target. Given this competitive advantage, customers are more likely to buy Amazon’s products and see higher value in the goods and services the company has to offer.
As we discussed in class, Amazon announced in September that it would be building a second headquarters. The location is still to be determined, but the company opened up a bidding process for cities in hopes of becoming the home of the second headquarters. In a recent Business Insider article titled Amazon Has Triggered a $5 Billion Bidding War, the author discusses some of the craziest bids that are in the process of being finalized by this Thursday, October 19th.
Among these offers stands Stonecrest, a town in Georgia that is “pledging to rename a part of itself the city of Amazon if the company chooses it.” This exemplifies how serious some cities are about persuading Amazon to choose them as the location of their second headquarters. In addition, cities in New Jersey have offered Amazon “tax breaks worth $5 billion over the next decade if the company decides to build there.” The location of the second Amazon headquarters is appealing because it has the potential to attract customers, create jobs, and boost the economy in the surrounding region. In return, cities are offering Amazon various benefits in order to stand out against other competitors in the so-called “bidding war.” 

Stonecrest, Georgia

The location of Amazon’s second headquarters is a complicated decision. According to a New York Times Article titled, Amazon Plans Second Headquarters, Opening a Bidding War Among Cities, Amazon has a detailed wish list that the city must satisfy. The article states, “the company is requesting the new location have a diverse population, recreational opportunities, and not stray too far from the lifestyle of Seattle.” Apparently the current headquarters in Seattle has twenty-four cafes-which seems pretty hard to beat.
       As seen in both articles, there are many factors contributing to Amazon’s decision, and the company is faced with an opportunity cost. No matter what city Amazon decides on, there will be a loss of potential benefits from the other cities when the final decision is made. Which city will have what it takes to be the second home of the e-commerce giant? I guess we will have to wait and see…