>>>CHEF’S KISS<<<
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This thread has mostly been about the retail marketplace, where I’m barely even an end user… but their business development strategy is literally just tax advantaged price dumping. The reason Amazon never owes any corporate income tax is because they ‘lose’ the vast majority of their corporate profit every year entering new industries at a steep loss to buy market share.
Honestly this business model is incredibly toxic and a huge problem. I know it’s not popular around here to care about corporate profits, but it’s wildly unfair to expect any business to compete with Amazon’s lack of any need to turn a profit within several years.
Normally you see this kind of behavior from people defending a monopoly. They’ll drop prices well below costs to make it impossible for the upstart to continue to exist. Amazon does this to the incumbents in an industry.
The only thing that gives me comfort is that most of the other companies trying to copy this strategy have executed it so poorly (usually by picking the wrong targets, I say this as someone inside one of the worst targets imaginable that keeps drawing startup bros to get absolutely wrecked) that all they’ve really succeeded in doing is blowing up Saudi investment money via Softbank.
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For years it was basically impossible to compete with SolarCity on a commercial project they wanted and they pushed prices down in residential because they didn’t mind losing $80m per quarter. They are partly why pretty much every large installer went out of business and then they collapsed too (resurrected as Tesla - shadow of former self (35% market share in 2015 and about 6% now))
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I only return stuff that doesn’t work, I will never feel guilty about that.
Amazon made selling free shipping/delivery something all online services now use. From dinners to groceries to other retailers.
That being said becsuse of what else I get prime might be the only one that is not a scam.
If this were true, they wouldn’t show profit on their Income Statement. But they do. In the last 3 years, they have reported more than $42 billion of Net Income:
The biggest reason they don’t pay as much federal income tax as you might expect is that their deductible stock-based compensation is much higher than what’s reported on their Income Statement:
Another big chunk is that they receive significant Research and Development tax credits from the U.S. government, but that isn’t particular to Amazon and those credits are not particularly controversial (at least according to the accounting and econ people I’ve spoken to).
I find all the stanning for manufacturers overcharging Amazon customers to be extremely weird.
I know you guys keep flipping the wording but it’s disingenuous at best.
And the idea that I should want to shop 20 different manufacturer websites and alternate retailers to get the best deals on my purchases every week as being pro consumer is flat out nuts.
A large number of the anti Amazon arguments here are still fully anti consumer and I do not understand it.
It’s called “honey” and ironically Amazon bought them. But it’s a plug-in that finds the best promo codes for you on any purchase it can and plugs it in.
Amazon’s website is balls.
I should post in Elon thread but I remember some defending billionaires going into space being a bit benevolent.
Now that super villain Bezos is sending himself into space next month how do we feel about it? Hopes and Prays obviously but clearly he became richest man in world so he could build a spaceship and fling himself into space. At least Elon hasn’t gotten to that level.
It’s cool that decades of public research into space has given bajillionaires a new way to show off their wealth. When will Elon get to be a space tourist?
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I have no love for the petty-bourgiouse notion of the idealized small business, but when I see a real flesh and blood manufacturer in conflict with their natural enemy, global world destroying multinational monopoly, I don’t have to ask myself whose side I’m on.
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This
There are lots of reasons to hate Amazon. Most of the ones listed here are pro business and anti consumer in general.
As Johnny might say, fuck consumers. They’re the problem.
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Eh, these need to be defined but it’s pretty clear to me that the consumer getting the lowest price no matter what might not be what is actually best for society.
Or maybe being pro-consumer in the way you are defining it (which I’m not 100% sure of) might be bad for society as a whole.
Just thinking out loud.
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They aren’t overcharging you, Karen. If they are, then there’s a sweet arbitrage opportunity sitting there for the taking that no one in the world has figured out yet.
QQ. I mean seriously what a bizarre sense of entitlement. Why do you think you deserve to always get the best deals while also paying none of the search costs? Does your local supermarket have the lowest price on every item they sell? Are other retailers not allowed to run promotions if Amazon says no?
You have all of the underlying economics completely backward. The “pro-consumer” argument being presented here is that the law of one price should be artificially enforced on sellers with different cost structures resulting in a market-wide distortion in pricing that specifically favors Amazon and only Amazon.
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I don’t know how it could be any clearer to the Amazon stans. Vendor has a product that it makes sense for them to sell if they get $20 in their pockets. Amazon says that’s cool but you have to give us $8 dollars to sell on our site so guess you need to list it for $28. Vendor says that make sense but if they come directly to our website, we will sell it for $22 … and also Walmart only charges us $6 so we will list it for $26 on Walmart.com.
Amazon says fuck that, we need the appearance of being the cheapest, but also we “deserve” the highest fee because we are the biggest player, so you have to list it for $28 everywhere or you can fuck off. This is clearly leveraging their massive market power in a way that is harmful to consumers! Explicitly and unequivocally so! Again, don’t know how it can be made any clearer…
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Maybe charts will help. These numbers are ldo made up, but I’m (hopefully) taking a product line to market later this summer and this is literally the situation I will be facing.
Current practice, enforced by Amazon and hated by sellers
| Amazon | Ebay | Etsy | Own Website | |
|---|---|---|---|---|
| Manufacturing costs | $10.00 | $10.00 | $10.00 | $10.00 |
| Logistics | $7.00 | $5.00 | $5.00 | $5.00 |
| Marketplace fees | $2.40 | $1.20 | $0.60 | $0.40 |
| Seller profit | $2.00 | $5.20 | $5.80 | $6.00 |
| Consumer’s Cost | $21.40 | $21.40 | $21.40 | $21.40 |
What sellers want to do that Amazon forbids
| Amazon | Ebay | Etsy | Own Website | |
|---|---|---|---|---|
| Manufacturing costs | $10.00 | $10.00 | $10.00 | $10.00 |
| Logistics | $7.00 | $5.00 | $5.00 | $5.00 |
| Marketplace fees | $2.40 | $1.20 | $0.60 | $0.40 |
| Seller profit | $2.00 | $2.00 | $2.00 | $2.00 |
| Consumer’s Cost | $21.40 | $18.20 | $17.60 | $17.40 |
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The problem is that it forces the manufacturer to distribute the cost of Amazon’s services across their entire top line instead of charging customers directly for the extra convenience.
It’s much cheaper to distribute a product through a physical retail store that can receive product by the truckload than it is to send it parcel direct to your house. Amazon is effectively preventing anyone from incentivizing customers to buy the product in a more efficient manner.
Also Amazon is a terrible partner to literally every vendor and large customer it has. To retail customers it’s all about surprise and delight but weirdly once you get above a certain size Amazon shifts to strong arming you pretty much immediately.
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