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Amazon's biggest problem

Amazon has already mastered the problem of getting their customers the most product choices and giving them the fastest and easiest way to buy them. The secret to its future success is getting products to its customers faster.

Amazon delivery via Prime Air drone
Source: Amazon Inc.
Amazon delivery via Prime Air drone

Actually, the secret is getting those products to them just as fast as they get it when they actually buy them at the store. That same-day or same-hour delivery goal is the true Holy Grail for web-based retailers. Once they're able to do that, there's really no reason to shop at a brick and mortar store anymore.

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So what's the big roadblock in Amazon's way?

The road itself.

Or to be more specific, the government's roads.

As long as Amazon has to rely on government-built and -maintained roads, airports, and shipping ports, it will find it very hard to continue to innovate where it counts.

To clarify, the government doesn't exactly build the infrastructure. It decides where roads should be built based on political and commercial needs, (political first), hires the private construction crews to build the roads, and then "maintains" them with more private companies who may or may not be led by government cronies, relatives, or campaign donors.

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The company has been trying everything to get around the problem for years. But building more warehouses and working around the clock have only done so much. That's why Amazon is floating the idea of using airborne drones to make deliveries right to residential homes.

But Amazon is already getting pushback from the FAA on that one, and more government agencies will join in that pushback if Amazon presses on with that idea.

That's because transportation and infrastructure are government-run monopolies that the government never wants to give up.

And woe to the private companies who DO try to build that by desperately trying to get around the business-stifling government-built and maintained trade pathways.

This isn't the first time that innovation has been killed off by poor infrastructure. You might think Concorde service died worldwide after that infamous SST Air France crash in 2000. But the truth is, the entire business model failed years earlier when travelers realized that paying a fortune to get from New York to London in under three hours made little sense when you still couldn't get to the airport in less than four hours for any amount of money.

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But the news isn't all bad. Amazon's story doesn't just put a spotlight on the problem, it also provides us with some very good answers.

Free-market supporters are often at a loss to provide specific answers to that supposedly rhetorical "who will build the roads?" questions often posed by smug statists.

Well, now we know the answer is "Amazon" and all the other fast-growing companies whose future depends on getting products to consumers nationwide and worldwide in a faster and better way. Of course, the car companies and oil companies would probably shoulder the cost too, but you get the idea. The point is, the idea that private companies would jump at the chance to create and maintain infrastructure doesn't seem far-fetched at all when you consider Amazon's challenges.

But will the government ever get out of the way and let it happen? Will national and local politicians ever give up the time-honored tradition of shaking down all the infrastructure businesses for campaign donations?

For the government, infrastructure projects and policy are the political gift that keeps on giving. For the people, not so much.

Now that Amazon CEO Jeff Bezos owns the Washington Post, he might think about getting more libertarian voices into his paper to help change that. Perhaps that was his plan all along, but so far I don't see the Post elevating or amplifying the arguments that would help Amazon, the tech sector, and just about every other innovating entrepreneur out there.

Time for that to change.

Commentary by Jake Novak, supervising producer of "Street Signs." Follow him on Twitter @jakejakeny.

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