I've got no clue on the issue of finance, but I've heard this statement thrown about, and as a layman when it comes to this stuff, it makes me scratch my head. Are they some sort of bubble that's just going to burst? Seems like it's been as stable a presence in the world as has been in my lifetime right next to Apple.
Is it just people who think they have a clue but actually don't? What is making Amazon go right now?
Read "The Everything Store" it's a great book on Jeff Bezos, the Amazon flywheel and the 20 year history of the company.
Just my opinion, and not a political thing at all, but everyone wants to pay as little as possible for everything they buy yet the minimum wage must also go up as high as it possibly can. To me those things don't go together... Wont businesses be more profitable and pay their employees more (and be able to hire more employees for that matter) if they can make 5 cents instead of 1 cent per item sold? If they're competing with Amazon good luck with that.
We are already feeling that crunch in the tire selling business. As a consumer, you're fine with paying the discount guys as little as possible for a tire, but if you were competing with them and you have to pay your employees and you have an overhead, you're not fine with it. To me, the same thing applies to Amazon. Unfortunately, the middle man is a much bigger part of the American job scene and the overall economy than people would like to believe, and Amazon is about as close to a monopoly as your local cable company. Hopefully for everyone something happens to limit their impact.
Just my opinion, and not a political thing at all, but everyone wants to pay as little as possible for everything they buy yet the minimum wage must also go up as high as it possibly can. To me those things don't go together... Wont businesses be more profitable and pay their employees more (and be able to hire more employees for that matter) if they can make 5 cents instead of 1 cent per item sold? If they're competing with Amazon good luck with that.
We are already feeling that crunch in the tire selling business. As a consumer, you're fine with paying the discount guys as little as possible for a tire, but if you were competing with them and you have to pay your employees and you have an overhead, you're not fine with it. To me, the same thing applies to Amazon. Unfortunately, the middle man is a much bigger part of the American job scene and the overall economy than people would like to believe, and Amazon is about as close to a monopoly as your local cable company. Hopefully for everyone something happens to limit their impact.
My wife doesn't drive, so she uses them CONSTANTLY. I use them pretty often. We've both noticed a decline in Amazon. More wrong or broken shipments, more bad customer service. I think they're having trouble scaling up.
As others have noted here, Amazon does what it does so well few can compete. And although I appreciate the convenience, I'm not sure it's the best thing for society here if a huge # of people can't work because they're driven out by Amazon.
The little guys are getting crushed and it makes me sick to be honest.
I would be worried about adding Amazon now, in light of its performance. Value will outperform growth going forward, and Amazon is not a 'value' stock.
The little guys are getting crushed and it makes me sick to be honest.
This is a powerful critique of the Amazon model to me. It suggests that Amazon isnt merely outcompeting the competition, but is effectively parasitic -- freeriding on the service provided by the competition.
I dont know what the solution is. I dont think we should be overly concerned with the "mom and pop" store owner. This is always a pet peeve of mine (especially with family farms). There isnt a right to run a profitable small business. If you can do it, great for you; but many businesses are well suited to chains and other large corporate structures moreso than one-off stores.
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As a side note my company (a marketing/ad agency) has a division who helps clients run their Amazon store through their SEO practices (essentially a rudimentary version of Google shopping). Being one of the few agencies to offer this as a service has given me an under the hood look at their back end business model. About 50%-70% of listings on page 1 of an Amazon search are paid so the revenue they are making off of advertising is starting to pick up steam. They also offer their data to be use externally on ad campaigns.
Data will be Amazons next big move. They have 20 years of shopper data, many on a single and identifiable email address that never changes as someone ages.
If they were a company with a lot of users but were unprofitable (i.e. Uber), that might throw into question sustainability. But they are very profitable and have a robust model.
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my friend owns a high end running shoe store which I helped him run before I started my own career. He's pressed daily by customers who come in to get fitted, use his equipment (machine to read your arches and stride) and then leave when they can save $10 on the shoes they want unless he matches the price. Amazon can't match his level of service but it doesn't even matter since they will walk out and get 2 day shipping.
The little guys are getting crushed and it makes me sick to be honest.
This is a powerful critique of the Amazon model to me. It suggests that Amazon isnt merely outcompeting the competition, but is effectively parasitic -- freeriding on the service provided by the competition.
I dont know what the solution is. I dont think we should be overly concerned with the "mom and pop" store owner. This is always a pet peeve of mine (especially with family farms). There isnt a right to run a profitable small business. If you can do it, great for you; but many businesses are well suited to chains and other large corporate structures moreso than one-off stores.
Amazon is not parasitic, those folks who walk into the shoe store and use the equipment are the parasites unless Amazon is advising them to do it. In the same way, people who want to support small business or a higher minimum wage are perfectly free to not make their purchases at Amazon or it's rivals.
But people want it both ways, and that's not Amazon's problem or fault.
But upon reflection, it's hard to sustain this argument in the face of so many industries that have gone by the wayside as technology advances. I'm sure that many mom and pop bit and bridle stores went out of business after the Model T arose, and I am happy to say goodbye to print newspapers as the internet replaces many of them. The idea of the govt bailing out such dying industries makes me sick.
Amazon (and for that matter Walmart, Home Depot, and Lowes) have produced better results for a wider range of consumers. I miss the small stores, but there's a reason they have mostly gone out of business. I have personally saved an enormous amount of time and gas money by mostly using Amazon. It's business model serves those of us who hate wasting time, and who shop when we know what we need (as opposed to discovering what we think we need by looking around in a store.)
It is also what drove Circuit City and HH Gregg out of business and is driving Best Buy down a similar path.
It isn't that Mom and Pop stores (or even chains) aren't trying to evolve - it is that they effectively can't because of rent and overhead that amazon doesn't have to contend with. It's one thing to be Kodak and miss out on the digital age but another thing entirely to carry the same merchandise Amazon does, but can't sell it because you aren't cheap enough.
I wouldn't let a broker tell me what to buy. Do your own research and buy what you want.
Maybe in certain niches and on items that don't weigh anything, but overall I don't think most brick and mortar stores can support an online business. The cost of running and operating a site, the labor dedicated to fulfilling online orders, and the actual shipping costs likely don't make it worthwhile. And that doesn't include the inability to offer free 2 day shipping which used to cost $10 or so when I was helping my friend with his shoe store.
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This doesn't directly answer your caveat (and I never thought of that problem, since, as I mentioned, it's not at all how I shop). It's just a side point, but relevant: to some degree, by turning into an internet marketplace for third party sellers, Amazon has helped some smaller stores thrive if those stores are able to adapt to make sales online.
Maybe in certain niches and on items that don't weigh anything, but overall I don't think most brick and mortar stores can support an online business. The cost of running and operating a site, the labor dedicated to fulfilling online orders, and the actual shipping costs likely don't make it worthwhile. And that doesn't include the inability to offer free 2 day shipping which used to cost $10 or so when I was helping my friend with his shoe store.
I think he's referrring to the Amazon Affliliate program, where businesses sell their items thru Amazon. That eliminates the need to build, run and operate a site. You just need to manage product listings on Amazon's site.
Moreover, they also have the option of using the "Fulfilled by Amazon". Program. This is more costly in fees charged by Amazon, but they handle the entire order fulfillment process. The seller ships a box(es) of their items for sale to an Amazon warehouse. When customers purchase the items, Amazon handles shipping the items, communicating with the buyer, and handling any returns or shipping issues. And the items are eligible to be sent via 2-day Prime shipping. From the customers perspective, it's as if they're buying from Amazon itself.
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In comment 13525065 UConn4523 said:
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my friend owns a high end running shoe store which I helped him run before I started my own career. He's pressed daily by customers who come in to get fitted, use his equipment (machine to read your arches and stride) and then leave when they can save $10 on the shoes they want unless he matches the price. Amazon can't match his level of service but it doesn't even matter since they will walk out and get 2 day shipping.
The little guys are getting crushed and it makes me sick to be honest.
This is a powerful critique of the Amazon model to me. It suggests that Amazon isnt merely outcompeting the competition, but is effectively parasitic -- freeriding on the service provided by the competition.
I dont know what the solution is. I dont think we should be overly concerned with the "mom and pop" store owner. This is always a pet peeve of mine (especially with family farms). There isnt a right to run a profitable small business. If you can do it, great for you; but many businesses are well suited to chains and other large corporate structures moreso than one-off stores.
Amazon is not parasitic, those folks who walk into the shoe store and use the equipment are the parasites unless Amazon is advising them to do it. In the same way, people who want to support small business or a higher minimum wage are perfectly free to not make their purchases at Amazon or it's rivals.
But people want it both ways, and that's not Amazon's problem or fault.
A business that relies on its competitors to shoulder the cost of service and showing the product is parasitic in my book. Doesnt make them bad people, but one must acknowledge that Amazon is selling some sneakers only because its customers are getting the service elsewhere and steering the business to Amazon. That Amazon is not telling the customers to do it is immaterial to me -- it's a material part of their business and they know about it. Indeed, they have a price check app that lets you comparison shop to Amazon while standing in the store. Amazon is freeriding and siphoning sales off of retail competitors' efforts. Specifically, sales Amazon wouldnt get but for customers' ability to see, touch, and try out the product at competitors' brick and mortar stores.
Yes, but that's a competition of equals. Both brick and mortar stores are putting in the service/display effort. Then they are fairly competing on price.
Whereas Amazon absolutely is generating sales via a one way only exploitation of brick and mortar stores providing service/display.
If it serves the consumers' best interests, then adapt or die, no?
Bad day for apostrophes.
If it serves the consumers' best interests, then adapt or die, no?
Definitely not illegal. I think the freeriding is inherent in Amazon's model though. I think a lot of people, myself included, go browse at real world stores, and either price check against Amazon or order off Amazon a few days later when we firmly commit to the purchase. I sometimes do it just because I know Amazon returns are hassle-free.
The poster I was originally replying to talked about a friend who has people come in for running shoe fittings (using equipment that running stores have), and then buying the shoes for less off Amazon. That is 100% part of Amazon's business model -- it's literally the whole point of the Amazon Price Check app.
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I guess that I tend to not be persuaded by "fairness" arguments unless a business is manipulating the law, or illicitly co-opting processes in play. It's not like consumer's doing this sort of thing is inherent in Amazon's model for sucess.
If it serves the consumers' best interests, then adapt or die, no?
Definitely not illegal. I think the freeriding is inherent in Amazon's model though. I think a lot of people, myself included, go browse at real world stores, and either price check against Amazon or order off Amazon a few days later when we firmly commit to the purchase. I sometimes do it just because I know Amazon returns are hassle-free.
The poster I was originally replying to talked about a friend who has people come in for running shoe fittings (using equipment that running stores have), and then buying the shoes for less off Amazon. That is 100% part of Amazon's business model -- it's literally the whole point of the Amazon Price Check app.
This is why it's good to draw on a wide range of experiences. As I noted above, this isn't how I shop, and as far as my group of friends go, I haven't heard of this as a widespread thing. But from others' perspectives, it it seems to be, and that's important data.
Such is life and he knows it, but its still shitty.
Such is life and he knows it, but its still shitty.
That's completely shitty. If I got that kind of service I would follow through with the purchase. Not that I'm a saint: I'm not above looking at a product at a place like Best Buy and then buying it from Amazon. But if you get personal service, you owe them your business if you decide to buy based on it IMO.
I'll note that I often flip the tables on Amazon. Their product page provides a lot of information to help make product decisions: user reviews, professional reviews, specs, answered questions, etc. I often make a purchase decision via Amazon, but then buy elsewhere at a lower price.
the major complaint I have with Amazon is returns.
Which is why for big purchases like TV's I still use BestBuy.
I've never even had to return a TV, but if I did I'd much rather load it in my car and drive 10 minutes to BestBuy than go through the Amazon return process and bring it somewhere to be shipped.
any by frequent Amazon user, on my account summary page it says I have had 73 orders in the past 6 months.
I use it for books, school supplies, camping gear, pet supplies, Amazon pantry, small electronics (like chargers, cables, cases, etc.) - has anyone been in a BestBuy or Target and looked at their iPhone 6 cases? they have like 2. Thousands on Amazon.
anyway, love the company, great customer service if there's an issue, still not there yet with major electronics.
I'm pretty sure I remember watching an interview with Bezos and he even admitted Amazon won't last long, If they sustain a high for the next decade or so I'm sure he would be happy. Of course they have made many smart investments to branch out, some of which will and some of which wont help the company in the long run. Amazon will surely be around for sometime, I just don't see them and Google staying on top for the foreseeable future; and that is only natural for any company in a world of competing markets.
It is also what drove Circuit City and HH Gregg out of business and is driving Best Buy down a similar path.
Best Buy will price match any major online retailer. So if you're there, looking at a big TV or whatever, and you find one you like, there's no reason to go home and order it. Just show them the price on your phone and that's what you pay.
It's one of the reasons that BB is still around while CC and the others have gone the way of all flesh. If there are legit customers in your store and you let them leave empty-handed, that's on you.
I remember when Borders was taking off and people were lamenting the loss of the little, indie bookstores because they couldn't compete. Things was, a lot of those little, indie bookstores really really sucked. They deserved to go out of business.
Mega-corporations have shown time and again that they can and will stay powerful for a long time, and usually their demise ends up being tied to not keeping up with innovation.
Just take a look at the Fortune 500 companies - not many flash in the pans there.
People in this thread have already pointed out that with Amazon's expansion into other markets, they have noticed a considerable downgrade in their shipping department. I think as Amazon starts investing more into these other projects other factors of their company that aren't set to last long term and that aren't as profitable will start to die out.
I think Blockchain and Ethereum type technology will be the breaking point for how many of these mega-businesses operate, as its a way around the government monopolization of power and authority that allows them to sustain while not being fully efficient.
To the point above about people using brick and mortar for shopping and Amazon for buying. There are many times I purchase something on Amazon that I could buy cheaper elsewhere but I prefer the convenience of Amazon.
Best Buy will price match any major online retailer. So if you're there, looking at a big TV or whatever, and you find one you like, there's no reason to go home and order it. Just show them the price on your phone and that's what you pay.
It's one of the reasons that BB is still around while CC and the others have gone the way of all flesh. If there are legit customers in your store and you let them leave empty-handed, that's on you.
I remember when Borders was taking off and people were lamenting the loss of the little, indie bookstores because they couldn't compete. Things was, a lot of those little, indie bookstores really really sucked. They deserved to go out of business.
I will and have taken advantage of BB's price match. But a lot of times I decide against the product I checked out. Or it's a "Best Buy Exclusive" that can't be price matched elsewhere, though a very similar model is sold elsewhere.
I think your point on small bookstores was spot on. Most small businesses that get driven out were bad businesses. Years ago Home Depot drove most independent hardware stores out of business. But there are 3-4 not far from me that are thriving by providing top service.
BTW: there's been a resurgence of indie bookstores in the US. There're profitable businesses because they provide good service that customers value and Amazon can't provide. Amazon has no worries, but they've built a nice niche for themselves.
Ditto, feeling a book in your hands is not something you can replicate digitally, both pre and post purchase. If you already know what you want that's one thing, but being in a book store has always been a unique experience for me.
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I'm glad the niche stores are rebounding.
Ditto, feeling a book in your hands is not something you can replicate digitally, both pre and post purchase. If you already know what you want that's one thing, but being in a book store has always been a unique experience for me.
And the way many of them are rebounding is through book signings. Next door to my office is a "small" book store that has 3-4 book singings a month. Some of them are on CSPAN 2. They've got a basement room that can hold about 50-60 people. Always draws a crowd and they must have a receipt from the store to have the book signed. That can't be replicated by Amazon.
The little guys are getting crushed and it makes me sick to be honest.
one thing that isn't mentioned
amazon first 10 plus years in existence they had the benefit of not charging sales tax .. which effectively gave them a large price advantage especially in North Eastern States.
but also they have been smart getting into businesses that you would not think a retailer would get into
paid search generates billions for amazon
and AWS is the leading cloud service if it was spun off of Amazon would be a multi billion dollar company in it's own right.
brick and mortar companies were pretty much here way before Amazon .. they are the ones that blew it ..