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Amazon, the world’s most remarkable firm, is just getting started

310 points by gpresot 10y ago

chiph 10y ago
Amazon needs to solve the counterfeit goods and scammer seller problems it has. I reported a scammer on Wednesday and in the span of time I was in the chat with them, 3 more scammers appeared for that same SKU. I've been a customer since the late 90s and if they don't get this fixed, I'm going to start looking for another e-tailer to use.
- larakerns 10y ago
  Not that AliExpress is much better with counterfeit, but it is the "fresh" contender to the West. There might be a movement away from Amazon's core business as AliExpress / Ali* expand here.
  - M_Grey 10y ago
    I doubt it... most of the counterfeit junk on Amazon is just Ali products and sellers leaking over.
    - Arizhel 10y ago
      Yeah, but at higher prices. You might as well just buy straight from the source on Ali and skip Amazon altogether.
      - hbosch 10y ago
        That is not a great solution for consumers. People don't want cheaper counterfeits - they want the real thing. Ali doesn't do this better than Amazon.
        Arizhel 10y ago
        I think you're missing the point. The point is you're going to get crappy counterfeits on Amazon, so it's better to just buy them on Ali where you'll get them cheaper. If you want the real thing, don't buy on Amazon.
        deleted 10y ago
        [deleted]
        marcosdumay 10y ago
        In fact, Ali does let you choose the seller of the item, and lets you contact him as much as you want before the transaction. So, no, Ali does this better than Amazon.
      - M_Grey 10y ago
        Well yeah... if I wanted to buy cheap counterfeits; most of the time I don't.
        Arizhel 10y ago
        Then Amazon probably isn't a good place for you to shop.
- brightball 10y ago
  At their scale, I wonder what would be involved?
  - ceejayoz 10y ago
    Let companies claim an SKU via a verification process, maybe? Let me pick whether I buy from the "owner" of that SKU - never commingled stock - or if I want to take a chance on the commingled unverified vendors.
  - tyingq 10y ago
    a) When co-mingling inventory, keep track of the original source, and penalize them (not the seller) for product issues, bad product reviews, etc. Or stop co-mingling if you can't have accountability. b) Separate somehow bad reviews and complaints about SELLERS from bad reviews, complaints about PRODUCTS. Again, more direct accountabilithy. Today, when you leave a bad review or complain about crap counterfeits or bad service, shipping, etc, it just doesn't affect the actual bad actor in the way it should.
    - ikeboy 10y ago
      Both of these are already done. Complaints about commingled inventory will hurt the one who sent them in. You can review the seller and the product separately.
      - tyingq 10y ago
        Not sure I agree. If I get a counterfeit product as a customer, I am guaranteed to leave a bad review. I don't see some process in place that automatically routes that from a PRODUCT review into a WHOEVER_ACTUALLY_PUT_THAT_IN_THE INVENTORY review. I can't even really tell Amazon that the product is counterfeit. The closest thing is "not as described".
        ikeboy 10y ago
        If you leave that review, it will go back and hurt the seller. I've seen advice in some of the groups I'm in for sellers that says if a listing gets shut down, look at recent reviews to determine if anyone was unhappy. Also, if you return and mention the word counterfeit, that will be picked up. I've had one listing temporarily shut down because of a return that said they were worried it was counterfeit, then I sent amazon invoices and they let me sell again.
- tux1968 10y ago
  This. They've already lost my family as customers because it's just too hard to figure out what is safe to order. Maybe few people will react the same way we have -- Amazon better hope so, or get their act together quickly.
- menacingly 10y ago
  For me, this problem went away when I started dealing exclusively with items "shipped from and sold by" amazon.com. Do you still experience counterfeit stuff if you do that? Hopefully not, or I'll have to revise my strategy. I love Amazon, but the ebay side of their retail business is total shady junk
  - nommm-nommm 10y ago
    >Do you still experience counterfeit stuff if you do that? Hopefully not, or I'll have to revise my strategy. Yes, you do. There was a post just a few days ago on Hacker News about "sold and shipped by Amazon" sending out cheap counterfeits of his book. https://news.ycombinator.com/item?id=13924546 https://news.ycombinator.com/item?id=13924546 http://www.inc.com/sonya-mann/amazon-counterfeits-no-starch.html http://www.inc.com/sonya-mann/amazon-counterfeits-no-starch.... I suspect the counterfeit problem is much larger than the public can even see, most counterfeit complaints are handled by Amazon or not noticed by the consumer so they aren't made public.
    - secabeen 10y ago
      My understanding is that in some cases, Amazon will blend together FBO items in their warehouse, mixing the stock that Amazon sells with the stock that other vendors send it to be sold. They're assuming that for a new book, the items are fungible, so it doesn't matter. This breaks when scammers print lower-quality counterfeit copies that appear identical at first glance. You order "Sold by Amazon.com", but when they grab one off of the shelf, you get the copy that "123Books" added there.
  - bratsche 10y ago
    I've been seeing some items that are ONLY sold by 3rd party sellers. For example, go search on Amazon for Nintendo Switch. I get it, there isn't much stock out there.. but on Amazon there is no way to say, "Pre-order for whenever you get more in stock." Instead you're forced to buy from 3rd party sellers. Now go and look at some of those sellers. There are tons and tons of sellers who have either 0% positive feedback, or they just started and have no feedback. I'm worried that more items are going over to this Ebay-like model of shady sellers.
- Arizhel 10y ago
  Bah. I've already stopped buying a ton of stuff from them, and for small cheap stuff my first stop is Ebay. I consider Ebay sellers far more reputable than Amazon ones (I know, that sounds bad, but that's how bad Amazon is). On Ebay, I can tell immediately if a seller is in China for instance. I can also easily see their feedback rating and read peoples' complaints. Amazon seems to make this stuff very hard to find. And Amazon's prices aren't all that great these days either. Finally, I got sick of being hounded to buy Amazon Prime ages ago.
  - nommm-nommm 10y ago
    Amazon has generic listings for everything so its hard to tell exactly what you're getting and from who. And since sellers share the same listing you can't apply any real filters to try to weed out the sketchy sellers other than "too cheap." Someone who isn't trying to be obvious about it would be selling at a higher price point. I don't really have a problem finding legit sellers on eBay whereas Amazon is basically a crapshoot. I actually ordered a book from Amazon listed as "new." I got a tracking number from USPS shipped from Maryland or whatever. Book comes FedEx from India!! Yes, seller is buying fraudulent shipping to make it look like their books are shipping from the US!!! Worse, the book was in garbage condition. I mean really worn, ripped cover and all. Had to get a refund from Amazon. When I reported the seller to Amazon no action was taken that I could see, if it was up to me blatant fraud like that would be a auto-ban. I left a review warning other users of the sellers practices and the seller actually tried to convince me they weren't actually listing fraudulent tracking numbers with "we used to ship USPS but we had problems with packages getting stolen." Which makes no fucking sense at all. Additionally, even worse (if this could get worse), I now believe that book to be a counterfeit/unauthorized printing. I didn't know that was a actually a thing until this week, but the book's quality and price-point is a huge indication. I thought the price point went down due to used books in the market and the book was just not great. I just Googled and counterfeits of this book are common and mine matches the description of the counterfeit version. :-/ I've heard horror stories about sellers who create a detailed listing for a product and a second seller comes along and changes the listing making seller 1 sell products not as described in the listing. I don't know if its true, but people claimed it happened to them.
- differentView 10y ago
  > I'm going to start looking for another e-tailer to use. What alternatives are there that don't have the same problem?
  - chiph 10y ago
    Walmart.com also has problems with fraudulent sellers (gray-market items) but it's not as bad.
- magic_beans 10y ago
  I'm sure your departure will affect their profits greatly.
- diminoten 10y ago
  This is a problem for a small subset of people, so no, they don't really have to solve this.
- aRationalMoose 10y ago
  What sort of counterfeits are we talking that is so bad that they lose your business?
  - chiph 10y ago
    So far I've had counterfeit auto parts and water filters show up. The problem is I never used to have these issues when buying from them. The part was correct - every time. Now when I order something I have to allow an extra week or two before I can actually use it, just in case I have to do a return. Like in the auto parts example - If I want to replace something on the car that requires disassembly, I schedule a Saturday for it. But then the part arrives and it's of poor quality because it's counterfeit, so I have to reschedule my time, and perhaps a friend's time who was going to come over and help. If this happens once, it's an annoyance but dealt with. If it happens repeatedly (it took 3 tries to get the legit water filters because of co-mingled stock at Amazon), it's waaaay beyond annoying.
- kilroy123 10y ago
  I agree. I'm pretty sure I've been a victim of this, though it's hard to prove. I'm far more skeptical about Amazon now.
tabeth 10y ago
I know this problem isn't unique to Amazon, but what are people's thoughts on the potentially unsustainble levels of e-commerce. I know plenty of people who are in serious debt (primarily student and credit card) and still blow tons of money on Amazon. Given that the general levels of debt are approaching 2008 levels [1], is this something to be worried about in general, or is it irrelevant? The main reason for asking is that if large percentages of Amazon's growth can be attributed to a rise in consumer debt, then wouldn't Amazon be disproportionally damaged by another recession and/or some sort of debt bubble burst? [1] http://money.cnn.com/2017/02/16/pf/americans-more-debt-in-2016/ http://money.cnn.com/2017/02/16/pf/americans-more-debt-in-20...
- EGreg 10y ago
  Ease of use means a lot. And the US obsession with consumer culture has trained people that buying is good, and "ending is better than mending".
  - tonyedgecombe 10y ago
    I don't think it's just the US, most developed countries seem to be going down the same road.
- TulliusCicero 10y ago
  > I know plenty of people who are in serious debt (primarily student and credit card) and still blow tons of money on Amazon. I don't think this is specific to Amazon. As a whole, Americans seem to be too lax about taking on consumer debt.
  - Diamons 10y ago
    Because some believe this country won't last the next 10 years
    - notheguyouthink 10y ago
      On that note, where is safe to put your money i wonder? Is there more and less stable mediums to hold your money?
mabbo 10y ago
I've said before on hackernews, but people never seem to grasp the scope of Amazon. They aren't an e-commerce website anymore; that's just the tip of the iceberg. Bias: I spent a good five years there. In logistics alone: hundreds of warehouses in a dozen countries; hundreds of delivery stations, a fleet of drivers (independent contractors all) in the tens or hundreds of thousands; a fleet of airplanes (and an airport I hear?); and I read an article a while back saying they were buying a big ol' container ship because why not? Oh and the drones of course, whenever they get off the ground (eh? see what I did there?) Then you add on AWS, Kindle, the prototyped no-cash-register stores, and whatever else they've got cooking that no one knows about. This company is my best bet for "Weyland-Yutani" from the "Alien" series.
- ericcholis 10y ago
  Also under logistics, "seller-fulfilled prime", adding good quality shippers to their delivery network.
  - nommm-nommm 10y ago
    I thought "seller-fulfilled prime" was just the seller shipping however they want as long as it was comparable to prime in shipping time. But only select sellers will be offered this.
- mattmanser 10y ago
  It is impressive. Do you think there's a chance of decline if Bezos leaves and the next Ballmer comes along? Profits up, but ultimately company declines and lets competitors eat it's lunch?
  - ra1n85 10y ago
    I don't. Amazon is successful because of its fast moving, demanding culture. No product is ever left to coast - everyone is pushed to be bigger, faster, cheaper, etc. Amazon realizes this, and does a lot to reinforce its culture internally. They do an excellent job of this, even in remote offices. I think Bezos has done a terrific job of building something that will succeed without him. And that's a good thing for him - he's free to play with space travel, now.
gordon_freeman 10y ago
As per the article their PE ratio is above 172 and it already reflects their "would-be" profits after 2020. Isn't this too much risk to invest in AMZN?
- dood 10y ago
  Amazon always reinvests most of their profits into growth, so the PE ratio is somewhat irrelevant, or at best misleading. Edit on downvotes: this is not a controversial opinion, see this respected analysis from 2014: http://ben-evans.com/benedictevans/2014/9/4/why-amazon-has-no-profits-and-why-it-works http://ben-evans.com/benedictevans/2014/9/4/why-amazon-has-n...
  - greedo 10y ago
    Whenever someone says that an established metric is irrelevant to discussing a publicly traded company, I think they're mistaken.
    - snovv_crash 10y ago
      Whenever people optimise for metrics at the expense of what the metric is supposed to be a proxy for, I think they're mistaken.
      - greedo 10y ago
        Agreed. P/E ratio shouldn't be the sole metric used to evaluate a public stock, but it is a useful proxy for evaluating its current price. And when a stock has an outlandishly high P/E ratio, there needs to be an outlandishly compelling story behind the stock. I don't see that with Amazon; I see a company that does the majority of its business in the US, has trouble overseas with some of its offerings, and that has plentiful competition worldwide.
        snovv_crash 10y ago
        How about if we made an improved metric, which takes Amazon's story into account? Something like static-profit/equity, with static-profit being the profit they would be making if they weren't investing in growth? I suspect this is difficult to get exact numbers for since separating per-item costs vs growth-investment costs won't be separated. But I don't think it would be hard to estimate given a slightly more detailed breakdown of operating expenses.
gdulli 10y ago
I've had an account since 1997 and I'm close to canceling, not getting started. I've weaned off, only making a few orders a year, which I still do because I get Amazon credit card rewards. I was okay with missing out on fast free shipping unless I paid $100/year, because I could still get slow free shipping. But now that I don't get the best price on a given product without Prime, shopping there feels like a bad value. The competition competes well on price now without extracting an annual fee. As of a few weeks ago my Amazon rewards card gives me lower rewards than if I paid for Prime, so I'm looking for a new card. I'd chosen a card without an annual fee for a reason. For the first 15 years Amazon trained me to buy online from one place. But in the last 5 it trained me off of that behavior. I have the added motivation to reject Amazon because of its treatment of employees and its business practices, but as just a customer and not an activist it's become a bad deal anyway.
- coding123 10y ago
  I haven't yet seen any online retailer compete on time to ship compared to prime. One of my few online purchases OFF Amazon was some Vet-only cat food - and it took them 2 weeks. Not only that but I ordered it on a Thursday, and there was a label that was generated that day, but watched thet tracking - it didn't get into UPS' hands until Tuesday. I would have shit a 1000 bricks if Amazon did that. I do get however that the company itself has a lot of internal problems to fix.
  - Arizhel 10y ago
    You're comparing Amazon to one random e-tailer that you picked somehow. I've stopped most of my Amazon buying in the last year or so, and most e-tailers are just fine with their shipping times. They have better prices too. AFAIC, Amazon is a has-been. It's a great place, however, to get crappy Chinese counterfeits at inflated prices, if you're looking for that kind of thing.
  - nommm-nommm 10y ago
    Chewy.com ships prescription cat food in two days for free. It's free shipping if you spend more than $49 (easy with prescription food...) or sign up for auto-delivery (which also gets you 5% off). They also have excellent customer service, easy to use website, and great prices. Auto-delivery is stupid convenient too since my cats eat exactly the same amount each day so my usage is very constant. I'm not affiliated, just a happy customer. I didn't even know about it until I got an AMEX offer for them a few years ago. Amazon "free" shipping seems very costly to me amortized unless you impulse order a whole bunch of cheap stuff very often. Paying for upgraded shipping on an as-needed basis seems like a better value. Or simply reduce consumption... You're also comparing apples to oranges.
npguy 10y ago
Ethereum will be a solid threat to AWS. Overall.
toddmorey 10y ago
My family has migrated more purchases to Amazon than I even realized. I got tipped off when I noticed that now the recycle bin fills up so much faster than the trash can. Which brings up the main issue I have for to-the-door delivery: the packaging. The insane amount of boxes inside of boxes really makes me feel guilty. There was a project at Amazon in 2008 to have consumer friendly, "frustration free" [1] packaging, as most packages are optimized to stand out on store shelves and prevent theft. (Of course that makes them bulky and hard to open. With posed toys that secured with wire and screws, it's even more maddening.) Where has that effort gone? Did it fall out of favor with manufacturers and / or consumers? I would love to have Amazon drop off my order in as little packaging as possible and even collect & reuse special durable bottles and such for frequently used items like laundry detergent. This seems like an opportunity as they increasingly build local warehouses and take ownership of the supply chain and delivery logistics. [1] http://www.adsavvy.org/amazoncoms-new-frustration-free-packaging-is-eco-and-customer-friendly/ http://www.adsavvy.org/amazoncoms-new-frustration-free-packa...
- MengerSponge 10y ago
  I'd be much more enthusiastic about their frustration free packaging if fraudulent items weren't so endemic. I know it isn't guaranteed, but blister packs from the manufacturer are less likely to be tampered with, right?
  - nommm-nommm 10y ago
    Fraudsters just manufacturer their own fake blister packs that look just like the company's.
- jclardy 10y ago
  When amazon delivers things via Prime Now they typically come in brown paper grocery bags. Obviously when handing things off to UPS/USPS/FedEx you can't really do that. Though I will say recently I have had some things shipped in their actual product boxes. I ordered a food processor and it arrived in its store packaging. I guess the issue there becomes package theft, considering you can easily know the contents. Maybe some simple brown paper wrapping around it?
vxxzy 10y ago
What is the consensus here on HN? More and more I feel like Amazon is becoming the next Standard Oil. In the case of Amazon, they are leveraging technology in all spaces and optimzing everything. Could they be the next Standard Oil?
- sidcool 10y ago
  What happened with Standard oil?
  - dastbe 10y ago
    The 30 second answer is that standard oil owned an incredible percentage of the oil market, both in horizontal expanse as well as vertical integration. They were broken up by the government through antitrust regulations, and IMO the most interesting part is the constituent parts became worth quite a bit more after breakup.
    - and0 10y ago
      Curious about how anti-trust laws for an e-commerce firm might play out in 5-10 years, with the internet + globalization having come so far since Microsoft, I'd imagine even the US government would start to lose leverage breaking up something like Amazon.
- pnathan 10y ago
  Generally, HN is bullish on Amazon, with the usual bear crowd. IMO: Amazon has not turned the screws in ways that are causing signficant complaint. I would guess, based on the usual history of duchies, founders, etc, when Bezos starts checking out, Amazon's behavior will begin to significantly alter, and that will trigger a very interesting time. I'd guess that by 2025 (8 years out), enough pressure will have built up for antitrust and similar to be applied to the online giants. "Why is Google a virtual monopoly in search? Facebook ubiquitus in social media? Amazon in retail/online services", and the pressures from society will begin to force hearings and so forth. I would guess that the end game will be that the definition of utility services will be expanded and an load of regulation will be piled on them to ensure that it's not exploitative.
sidcool 10y ago
The growth trajectory of Amazon baffles me. In its early days, I had heard a lot about Amazon's failure prophecies from luminaries of the Tech world. Their real power is behind the scenes, far away from their shopping apps. There's no doubt they will be in the forefront of many initiatives over the next decade.
- udkl 10y ago
  The real power is behind their culture. Amazon has incredible 'leadership principles' that are the cornerstone of it's culture. This strong culture keeps the company innovating and relevant.
tehabe 10y ago
For me as customer, Amazon is almost the best, some times I think it could be better. The UX for their video service is awful, but okay. For its employees I hear only bad things, like that Amazon won't talk to the union in Germany or what The New York Times wrote a couple of years ago. I'm so conflicted about this company. But it matters. Both sides matter.
- dokument 10y ago
  Wasn't that NYT article found to not be very accurate?
  - pnathan 10y ago
    No. While one or two data points may be fuzzy, and it's the case that Amazon gives teams a lot of leeway in culture definition, it's wholly internally consistent with the quiet conversations you get with people in Seattle.
- rayvd 10y ago
  I'm not so sure that not talking to a union is a bad thing. :-)
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brilliantcode 10y ago
Amazon, the world's biggest net unprofitable website, kept afloat by investors expectation of turning on net profits in some distant unknown future. It's like, the laws of gravity doesn't apply to American tech firms but ruthlessly expected from the rest. It's only a matter of time before Walmart kills Amazon. Walmart has enough cash to copy Amazon and steal their market share. The unchallenged status of Amazon will signal Walmart to enter it's turf and steal away the competition. Whether I buy a box of condoms on Amazon or Walmart need not matter. Whoever gets it to me quickly and cheapest wins. Short AMZN and long WMT
- pgrote 10y ago
  "It's only a matter of time before Walmart kills Amazon. Walmart has enough cash to copy Amazon and steal their market share." I am intrigued by your statement. How do you think Walmart can accomplish this task?
  - brilliantcode 10y ago
    It's very easy, people have been buying from Walmart longer than Amazon. edit: Walmart has enough cash to copy Amazon in everyway at a discount-Walmart has been watching Amazon very carefully and is able to learn without failing or expending capital. When the capex fails to yield the returns investors were hoping for, it will significantly hurt confidence in Amazon. Amazon is built upon share price. When it goes down so does it's survival prospects. Nothing goes up forever. Walmart on the other hand is far more robust and stable. When Amazon trips, Walmart would be in a very good position to put the final blow. Yet the market continually overvalues Amazon. I actually saw someone comparing Amazon to Weyland-Yuteni from Aliens!
    - sumedh 10y ago
      > Walmart has enough cash to copy Amazon in everyway Reality does not work that way, sometimes a cash rich company just does not get it. Since you are so confident about the future I assume you have shorted Amazon and gone long on Walmart.
  - 10y ago
cafebabbe 10y ago
And not a single word about climate change and sustainable growth. Oh well.
faragon 10y ago
Amazon is too big to fail.
RcouF1uZ4gsC 10y ago
I am reminded of the story of Sears. https://en.wikipedia.org/wiki/Sears https://en.wikipedia.org/wiki/Sears When times are good, it seems impossible to imagine how a company could fall, but it can happen to anyone.
- dmix 10y ago
  Considering they had a great catalog business and totally missed the internet, I don't think that really applies here. Amazon is very well situated to be a part of multiple different industries developing on the horizon. It's media business alone could be huge if they figure out the marketing angle. They are really doing a poor job of pushing "Prime Video". I just went to the website and couldn't figure out how to get back to https://primevideo.com https://primevideo.com which I found last time. They have two different interfaces for browsing videos. I didn't even know they had such a great selection of original content either. I would have tried them out over Netflix for a couple months long ago. This may be their weakness. They are good at building products and the infrastructure that goes with it, but they are bad at marketing. Largely because they didn't have to develop this internal skillset with their ecommerce business. So if anything it will be that that hurts their ventures. I doubt they are going to be a Sears given that they have diversified and future-proofed properly,
  - beamatronic 10y ago
    I think what they were trying to say is that some day a historian may state, about Amazon: "Considering they had a great Internet business and totally missed the _________________." Something will perhaps come along after the Internet, which none of us can imagine right now. Sears had been on top of their game, had everything figured out and optimized, but they didn't adapt.
  - skinnymuch 10y ago
    In 1990 you wouldn't have the hindsight of saying how Sears messed up. Just like there's no possible hindsight for current times. Sears seemed unbeatable back then. Like amazon now.
- 10y ago
dgudkov 10y ago
Sometimes I'm afraid to think what would happen if Amazon merges with Google. No other combination would be so terrifying: neither Google+FB, nor FB+Apple, nor anything else. Amazon and Google control so much nowadays. It's probably very good that they're still independent companies and sometimes competitors.
- intopieces 10y ago
  Speaking as someone who works at one of these companies, we're happy about it too. The "other guy" is what excites me about my work. I would dread being the only player in the market.
  - droopyEyelids 10y ago
    Not to be a dick, but someone who works at a company doesn't really have an important opinion with regards to that company's competition in the global market. The owners of a company are who count, and they're generally investors who would be happy to form a monopoly and perform an innovation-free rent extraction on the planet for the rest of time if possible.
saosebastiao 10y ago
Amazon has one of the most phenomenally dangerous vulnerabilities of any company I've ever seen. All it takes is a mildly critical look at how they fund their growth. Amazon requires massive amounts of employees in order to grow. They throw increasingly-more-expensive new employees at increasingly-less-viable new businesses. These businesses are always massively cash-flow negative, and with the right amount of luck some of them might one day turn a profit. They fund this growth in three ways: 1) Issuing new shares of stock, 2) Paying employees with stock, and 3) Funneling cash flow from mature businesses back into the business. Because of accounting difficulties and not-so-explicit public reporting requirements, Amazon gets away with hiding how much they use #1 and #2, and can make people believe that #3 is the dominant source of funding. But the fact that they don't tell us how much #3 contributes is indicative of the fact that it doesn't; if you can't prove positive information, you hide negative information. Now here is the vulnerability: A moderate negative impact to their stock price sets off a chain of events that could destroy the company. The most critical employees holding the ship together are paid mostly via stock...with 2 year vesting times. As long as the stock prices keep growing, they overdeliver on compensation. But if stock prices fall, everybody gets a paycut. If the stock were to drop 50%, these employees would get a 25% pay cut. And they'll jump ship in massive numbers, as you would expect any time a company cuts pay by 25%. Without a cash reserve, all the potential remedies make the problem worse. Amazon could respond by offering more stock to employees. This lowers the stock price through dilution, and people rarely consider stock offers with falling prices to be an incentive. They could respond by selling more stock and making up for the pay in cash, but they would kill their stock price if they needed to sell enough to offset a 25% cut in pay. They could kill off unviable businesses that suck the most cash, but their stock price hinges on the existence of those unviable businesses to make investors believe there is growth potential. They could try to spin off businesses, but the high growth businesses prop their stock price up and the low growth businesses are worth less to the market than the value amazon receives from their cash flow. Everything they could possibly do will reinforce the drop of the stock price and flight of talent. In other words, Amazon can't just reset expectations and lay a few people off. They're sitting on a classic example of a runaway positive feedback loop[0]. Amazon knows it relies on stock speculation of growth potential to not die, that's the reason why you're reading this PR fluff right now. Amazon is the death star; the visible parts make it look like a tool for universal domination, but it's just a small torpedo blast away from nonexistence. [0] https://en.wikipedia.org/wiki/Positive_feedback https://en.wikipedia.org/wiki/Positive_feedback

310 points by gpresot 10y ago

chiph 10y ago

Amazon needs to solve the counterfeit goods and scammer seller problems it has. I reported a scammer on Wednesday and in the span of time I was in the chat with them, 3 more scammers appeared for that same SKU. I've been a customer since the late 90s and if they don't get this fixed, I'm going to start looking for another e-tailer to use.

larakerns 10y ago
Not that AliExpress is much better with counterfeit, but it is the "fresh" contender to the West. There might be a movement away from Amazon's core business as AliExpress / Ali* expand here.
- M_Grey 10y ago
  I doubt it... most of the counterfeit junk on Amazon is just Ali products and sellers leaking over.
  - Arizhel 10y ago
    Yeah, but at higher prices. You might as well just buy straight from the source on Ali and skip Amazon altogether.
    - hbosch 10y ago
      That is not a great solution for consumers. People don't want cheaper counterfeits - they want the real thing. Ali doesn't do this better than Amazon.
      - Arizhel 10y ago
        I think you're missing the point. The point is you're going to get crappy counterfeits on Amazon, so it's better to just buy them on Ali where you'll get them cheaper. If you want the real thing, don't buy on Amazon.
        deleted 10y ago
        [deleted]
      - marcosdumay 10y ago
        In fact, Ali does let you choose the seller of the item, and lets you contact him as much as you want before the transaction. So, no, Ali does this better than Amazon.
    - M_Grey 10y ago
      Well yeah... if I wanted to buy cheap counterfeits; most of the time I don't.
      - Arizhel 10y ago
        Then Amazon probably isn't a good place for you to shop.
brightball 10y ago
At their scale, I wonder what would be involved?
- ceejayoz 10y ago
  Let companies claim an SKU via a verification process, maybe? Let me pick whether I buy from the "owner" of that SKU - never commingled stock - or if I want to take a chance on the commingled unverified vendors.
- tyingq 10y ago
  a) When co-mingling inventory, keep track of the original source, and penalize them (not the seller) for product issues, bad product reviews, etc. Or stop co-mingling if you can't have accountability. b) Separate somehow bad reviews and complaints about SELLERS from bad reviews, complaints about PRODUCTS. Again, more direct accountabilithy. Today, when you leave a bad review or complain about crap counterfeits or bad service, shipping, etc, it just doesn't affect the actual bad actor in the way it should.
  - ikeboy 10y ago
    Both of these are already done. Complaints about commingled inventory will hurt the one who sent them in. You can review the seller and the product separately.
    - tyingq 10y ago
      Not sure I agree. If I get a counterfeit product as a customer, I am guaranteed to leave a bad review. I don't see some process in place that automatically routes that from a PRODUCT review into a WHOEVER_ACTUALLY_PUT_THAT_IN_THE INVENTORY review. I can't even really tell Amazon that the product is counterfeit. The closest thing is "not as described".
      - ikeboy 10y ago
        If you leave that review, it will go back and hurt the seller. I've seen advice in some of the groups I'm in for sellers that says if a listing gets shut down, look at recent reviews to determine if anyone was unhappy. Also, if you return and mention the word counterfeit, that will be picked up. I've had one listing temporarily shut down because of a return that said they were worried it was counterfeit, then I sent amazon invoices and they let me sell again.
tux1968 10y ago
This. They've already lost my family as customers because it's just too hard to figure out what is safe to order. Maybe few people will react the same way we have -- Amazon better hope so, or get their act together quickly.
menacingly 10y ago
For me, this problem went away when I started dealing exclusively with items "shipped from and sold by" amazon.com. Do you still experience counterfeit stuff if you do that? Hopefully not, or I'll have to revise my strategy. I love Amazon, but the ebay side of their retail business is total shady junk
- nommm-nommm 10y ago
  >Do you still experience counterfeit stuff if you do that? Hopefully not, or I'll have to revise my strategy. Yes, you do. There was a post just a few days ago on Hacker News about "sold and shipped by Amazon" sending out cheap counterfeits of his book. https://news.ycombinator.com/item?id=13924546 https://news.ycombinator.com/item?id=13924546 http://www.inc.com/sonya-mann/amazon-counterfeits-no-starch.html http://www.inc.com/sonya-mann/amazon-counterfeits-no-starch.... I suspect the counterfeit problem is much larger than the public can even see, most counterfeit complaints are handled by Amazon or not noticed by the consumer so they aren't made public.
  - secabeen 10y ago
    My understanding is that in some cases, Amazon will blend together FBO items in their warehouse, mixing the stock that Amazon sells with the stock that other vendors send it to be sold. They're assuming that for a new book, the items are fungible, so it doesn't matter. This breaks when scammers print lower-quality counterfeit copies that appear identical at first glance. You order "Sold by Amazon.com", but when they grab one off of the shelf, you get the copy that "123Books" added there.
- bratsche 10y ago
  I've been seeing some items that are ONLY sold by 3rd party sellers. For example, go search on Amazon for Nintendo Switch. I get it, there isn't much stock out there.. but on Amazon there is no way to say, "Pre-order for whenever you get more in stock." Instead you're forced to buy from 3rd party sellers. Now go and look at some of those sellers. There are tons and tons of sellers who have either 0% positive feedback, or they just started and have no feedback. I'm worried that more items are going over to this Ebay-like model of shady sellers.
Arizhel 10y ago
Bah. I've already stopped buying a ton of stuff from them, and for small cheap stuff my first stop is Ebay. I consider Ebay sellers far more reputable than Amazon ones (I know, that sounds bad, but that's how bad Amazon is). On Ebay, I can tell immediately if a seller is in China for instance. I can also easily see their feedback rating and read peoples' complaints. Amazon seems to make this stuff very hard to find. And Amazon's prices aren't all that great these days either. Finally, I got sick of being hounded to buy Amazon Prime ages ago.
- nommm-nommm 10y ago
  Amazon has generic listings for everything so its hard to tell exactly what you're getting and from who. And since sellers share the same listing you can't apply any real filters to try to weed out the sketchy sellers other than "too cheap." Someone who isn't trying to be obvious about it would be selling at a higher price point. I don't really have a problem finding legit sellers on eBay whereas Amazon is basically a crapshoot. I actually ordered a book from Amazon listed as "new." I got a tracking number from USPS shipped from Maryland or whatever. Book comes FedEx from India!! Yes, seller is buying fraudulent shipping to make it look like their books are shipping from the US!!! Worse, the book was in garbage condition. I mean really worn, ripped cover and all. Had to get a refund from Amazon. When I reported the seller to Amazon no action was taken that I could see, if it was up to me blatant fraud like that would be a auto-ban. I left a review warning other users of the sellers practices and the seller actually tried to convince me they weren't actually listing fraudulent tracking numbers with "we used to ship USPS but we had problems with packages getting stolen." Which makes no fucking sense at all. Additionally, even worse (if this could get worse), I now believe that book to be a counterfeit/unauthorized printing. I didn't know that was a actually a thing until this week, but the book's quality and price-point is a huge indication. I thought the price point went down due to used books in the market and the book was just not great. I just Googled and counterfeits of this book are common and mine matches the description of the counterfeit version. :-/ I've heard horror stories about sellers who create a detailed listing for a product and a second seller comes along and changes the listing making seller 1 sell products not as described in the listing. I don't know if its true, but people claimed it happened to them.
differentView 10y ago
> I'm going to start looking for another e-tailer to use. What alternatives are there that don't have the same problem?
- chiph 10y ago
  Walmart.com also has problems with fraudulent sellers (gray-market items) but it's not as bad.
magic_beans 10y ago
I'm sure your departure will affect their profits greatly.
diminoten 10y ago
This is a problem for a small subset of people, so no, they don't really have to solve this.
aRationalMoose 10y ago
What sort of counterfeits are we talking that is so bad that they lose your business?
- chiph 10y ago
  So far I've had counterfeit auto parts and water filters show up. The problem is I never used to have these issues when buying from them. The part was correct - every time. Now when I order something I have to allow an extra week or two before I can actually use it, just in case I have to do a return. Like in the auto parts example - If I want to replace something on the car that requires disassembly, I schedule a Saturday for it. But then the part arrives and it's of poor quality because it's counterfeit, so I have to reschedule my time, and perhaps a friend's time who was going to come over and help. If this happens once, it's an annoyance but dealt with. If it happens repeatedly (it took 3 tries to get the legit water filters because of co-mingled stock at Amazon), it's waaaay beyond annoying.
kilroy123 10y ago
I agree. I'm pretty sure I've been a victim of this, though it's hard to prove. I'm far more skeptical about Amazon now.

tabeth 10y ago

I know this problem isn't unique to Amazon, but what are people's thoughts on the potentially unsustainble levels of e-commerce. I know plenty of people who are in serious debt (primarily student and credit card) and still blow tons of money on Amazon. Given that the general levels of debt are approaching 2008 levels [1], is this something to be worried about in general, or is it irrelevant? The main reason for asking is that if large percentages of Amazon's growth can be attributed to a rise in consumer debt, then wouldn't Amazon be disproportionally damaged by another recession and/or some sort of debt bubble burst? [1] http://money.cnn.com/2017/02/16/pf/americans-more-debt-in-2016/ http://money.cnn.com/2017/02/16/pf/americans-more-debt-in-20...

EGreg 10y ago
Ease of use means a lot. And the US obsession with consumer culture has trained people that buying is good, and "ending is better than mending".
- tonyedgecombe 10y ago
  I don't think it's just the US, most developed countries seem to be going down the same road.
TulliusCicero 10y ago
> I know plenty of people who are in serious debt (primarily student and credit card) and still blow tons of money on Amazon. I don't think this is specific to Amazon. As a whole, Americans seem to be too lax about taking on consumer debt.
- Diamons 10y ago
  Because some believe this country won't last the next 10 years
  - notheguyouthink 10y ago
    On that note, where is safe to put your money i wonder? Is there more and less stable mediums to hold your money?

mabbo 10y ago

I've said before on hackernews, but people never seem to grasp the scope of Amazon. They aren't an e-commerce website anymore; that's just the tip of the iceberg. Bias: I spent a good five years there. In logistics alone: hundreds of warehouses in a dozen countries; hundreds of delivery stations, a fleet of drivers (independent contractors all) in the tens or hundreds of thousands; a fleet of airplanes (and an airport I hear?); and I read an article a while back saying they were buying a big ol' container ship because why not? Oh and the drones of course, whenever they get off the ground (eh? see what I did there?) Then you add on AWS, Kindle, the prototyped no-cash-register stores, and whatever else they've got cooking that no one knows about. This company is my best bet for "Weyland-Yutani" from the "Alien" series.

ericcholis 10y ago
Also under logistics, "seller-fulfilled prime", adding good quality shippers to their delivery network.
- nommm-nommm 10y ago
  I thought "seller-fulfilled prime" was just the seller shipping however they want as long as it was comparable to prime in shipping time. But only select sellers will be offered this.
mattmanser 10y ago
It is impressive. Do you think there's a chance of decline if Bezos leaves and the next Ballmer comes along? Profits up, but ultimately company declines and lets competitors eat it's lunch?
- ra1n85 10y ago
  I don't. Amazon is successful because of its fast moving, demanding culture. No product is ever left to coast - everyone is pushed to be bigger, faster, cheaper, etc. Amazon realizes this, and does a lot to reinforce its culture internally. They do an excellent job of this, even in remote offices. I think Bezos has done a terrific job of building something that will succeed without him. And that's a good thing for him - he's free to play with space travel, now.

gordon_freeman 10y ago

As per the article their PE ratio is above 172 and it already reflects their "would-be" profits after 2020. Isn't this too much risk to invest in AMZN?

dood 10y ago
Amazon always reinvests most of their profits into growth, so the PE ratio is somewhat irrelevant, or at best misleading. Edit on downvotes: this is not a controversial opinion, see this respected analysis from 2014: http://ben-evans.com/benedictevans/2014/9/4/why-amazon-has-no-profits-and-why-it-works http://ben-evans.com/benedictevans/2014/9/4/why-amazon-has-n...
- greedo 10y ago
  Whenever someone says that an established metric is irrelevant to discussing a publicly traded company, I think they're mistaken.
  - snovv_crash 10y ago
    Whenever people optimise for metrics at the expense of what the metric is supposed to be a proxy for, I think they're mistaken.
    - greedo 10y ago
      Agreed. P/E ratio shouldn't be the sole metric used to evaluate a public stock, but it is a useful proxy for evaluating its current price. And when a stock has an outlandishly high P/E ratio, there needs to be an outlandishly compelling story behind the stock. I don't see that with Amazon; I see a company that does the majority of its business in the US, has trouble overseas with some of its offerings, and that has plentiful competition worldwide.
      - snovv_crash 10y ago
        How about if we made an improved metric, which takes Amazon's story into account? Something like static-profit/equity, with static-profit being the profit they would be making if they weren't investing in growth? I suspect this is difficult to get exact numbers for since separating per-item costs vs growth-investment costs won't be separated. But I don't think it would be hard to estimate given a slightly more detailed breakdown of operating expenses.

gdulli 10y ago

I've had an account since 1997 and I'm close to canceling, not getting started. I've weaned off, only making a few orders a year, which I still do because I get Amazon credit card rewards. I was okay with missing out on fast free shipping unless I paid $100/year, because I could still get slow free shipping. But now that I don't get the best price on a given product without Prime, shopping there feels like a bad value. The competition competes well on price now without extracting an annual fee. As of a few weeks ago my Amazon rewards card gives me lower rewards than if I paid for Prime, so I'm looking for a new card. I'd chosen a card without an annual fee for a reason. For the first 15 years Amazon trained me to buy online from one place. But in the last 5 it trained me off of that behavior. I have the added motivation to reject Amazon because of its treatment of employees and its business practices, but as just a customer and not an activist it's become a bad deal anyway.

coding123 10y ago
I haven't yet seen any online retailer compete on time to ship compared to prime. One of my few online purchases OFF Amazon was some Vet-only cat food - and it took them 2 weeks. Not only that but I ordered it on a Thursday, and there was a label that was generated that day, but watched thet tracking - it didn't get into UPS' hands until Tuesday. I would have shit a 1000 bricks if Amazon did that. I do get however that the company itself has a lot of internal problems to fix.
- Arizhel 10y ago
  You're comparing Amazon to one random e-tailer that you picked somehow. I've stopped most of my Amazon buying in the last year or so, and most e-tailers are just fine with their shipping times. They have better prices too. AFAIC, Amazon is a has-been. It's a great place, however, to get crappy Chinese counterfeits at inflated prices, if you're looking for that kind of thing.
- nommm-nommm 10y ago
  Chewy.com ships prescription cat food in two days for free. It's free shipping if you spend more than $49 (easy with prescription food...) or sign up for auto-delivery (which also gets you 5% off). They also have excellent customer service, easy to use website, and great prices. Auto-delivery is stupid convenient too since my cats eat exactly the same amount each day so my usage is very constant. I'm not affiliated, just a happy customer. I didn't even know about it until I got an AMEX offer for them a few years ago. Amazon "free" shipping seems very costly to me amortized unless you impulse order a whole bunch of cheap stuff very often. Paying for upgraded shipping on an as-needed basis seems like a better value. Or simply reduce consumption... You're also comparing apples to oranges.

npguy 10y ago

Ethereum will be a solid threat to AWS. Overall.

toddmorey 10y ago

My family has migrated more purchases to Amazon than I even realized. I got tipped off when I noticed that now the recycle bin fills up so much faster than the trash can. Which brings up the main issue I have for to-the-door delivery: the packaging. The insane amount of boxes inside of boxes really makes me feel guilty. There was a project at Amazon in 2008 to have consumer friendly, "frustration free" [1] packaging, as most packages are optimized to stand out on store shelves and prevent theft. (Of course that makes them bulky and hard to open. With posed toys that secured with wire and screws, it's even more maddening.) Where has that effort gone? Did it fall out of favor with manufacturers and / or consumers? I would love to have Amazon drop off my order in as little packaging as possible and even collect & reuse special durable bottles and such for frequently used items like laundry detergent. This seems like an opportunity as they increasingly build local warehouses and take ownership of the supply chain and delivery logistics. [1] http://www.adsavvy.org/amazoncoms-new-frustration-free-packaging-is-eco-and-customer-friendly/ http://www.adsavvy.org/amazoncoms-new-frustration-free-packa...

MengerSponge 10y ago
I'd be much more enthusiastic about their frustration free packaging if fraudulent items weren't so endemic. I know it isn't guaranteed, but blister packs from the manufacturer are less likely to be tampered with, right?
- nommm-nommm 10y ago
  Fraudsters just manufacturer their own fake blister packs that look just like the company's.
jclardy 10y ago
When amazon delivers things via Prime Now they typically come in brown paper grocery bags. Obviously when handing things off to UPS/USPS/FedEx you can't really do that. Though I will say recently I have had some things shipped in their actual product boxes. I ordered a food processor and it arrived in its store packaging. I guess the issue there becomes package theft, considering you can easily know the contents. Maybe some simple brown paper wrapping around it?

vxxzy 10y ago

What is the consensus here on HN? More and more I feel like Amazon is becoming the next Standard Oil. In the case of Amazon, they are leveraging technology in all spaces and optimzing everything. Could they be the next Standard Oil?

sidcool 10y ago
What happened with Standard oil?
- dastbe 10y ago
  The 30 second answer is that standard oil owned an incredible percentage of the oil market, both in horizontal expanse as well as vertical integration. They were broken up by the government through antitrust regulations, and IMO the most interesting part is the constituent parts became worth quite a bit more after breakup.
  - and0 10y ago
    Curious about how anti-trust laws for an e-commerce firm might play out in 5-10 years, with the internet + globalization having come so far since Microsoft, I'd imagine even the US government would start to lose leverage breaking up something like Amazon.
pnathan 10y ago
Generally, HN is bullish on Amazon, with the usual bear crowd. IMO: Amazon has not turned the screws in ways that are causing signficant complaint. I would guess, based on the usual history of duchies, founders, etc, when Bezos starts checking out, Amazon's behavior will begin to significantly alter, and that will trigger a very interesting time. I'd guess that by 2025 (8 years out), enough pressure will have built up for antitrust and similar to be applied to the online giants. "Why is Google a virtual monopoly in search? Facebook ubiquitus in social media? Amazon in retail/online services", and the pressures from society will begin to force hearings and so forth. I would guess that the end game will be that the definition of utility services will be expanded and an load of regulation will be piled on them to ensure that it's not exploitative.

sidcool 10y ago

The growth trajectory of Amazon baffles me. In its early days, I had heard a lot about Amazon's failure prophecies from luminaries of the Tech world. Their real power is behind the scenes, far away from their shopping apps. There's no doubt they will be in the forefront of many initiatives over the next decade.

udkl 10y ago
The real power is behind their culture. Amazon has incredible 'leadership principles' that are the cornerstone of it's culture. This strong culture keeps the company innovating and relevant.

tehabe 10y ago

For me as customer, Amazon is almost the best, some times I think it could be better. The UX for their video service is awful, but okay. For its employees I hear only bad things, like that Amazon won't talk to the union in Germany or what The New York Times wrote a couple of years ago. I'm so conflicted about this company. But it matters. Both sides matter.

dokument 10y ago
Wasn't that NYT article found to not be very accurate?
- pnathan 10y ago
  No. While one or two data points may be fuzzy, and it's the case that Amazon gives teams a lot of leeway in culture definition, it's wholly internally consistent with the quiet conversations you get with people in Seattle.
rayvd 10y ago
I'm not so sure that not talking to a union is a bad thing. :-)

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brilliantcode 10y ago

Amazon, the world's biggest net unprofitable website, kept afloat by investors expectation of turning on net profits in some distant unknown future. It's like, the laws of gravity doesn't apply to American tech firms but ruthlessly expected from the rest. It's only a matter of time before Walmart kills Amazon. Walmart has enough cash to copy Amazon and steal their market share. The unchallenged status of Amazon will signal Walmart to enter it's turf and steal away the competition. Whether I buy a box of condoms on Amazon or Walmart need not matter. Whoever gets it to me quickly and cheapest wins. Short AMZN and long WMT

pgrote 10y ago
"It's only a matter of time before Walmart kills Amazon. Walmart has enough cash to copy Amazon and steal their market share." I am intrigued by your statement. How do you think Walmart can accomplish this task?
- brilliantcode 10y ago
  It's very easy, people have been buying from Walmart longer than Amazon. edit: Walmart has enough cash to copy Amazon in everyway at a discount-Walmart has been watching Amazon very carefully and is able to learn without failing or expending capital. When the capex fails to yield the returns investors were hoping for, it will significantly hurt confidence in Amazon. Amazon is built upon share price. When it goes down so does it's survival prospects. Nothing goes up forever. Walmart on the other hand is far more robust and stable. When Amazon trips, Walmart would be in a very good position to put the final blow. Yet the market continually overvalues Amazon. I actually saw someone comparing Amazon to Weyland-Yuteni from Aliens!
  - sumedh 10y ago
    > Walmart has enough cash to copy Amazon in everyway Reality does not work that way, sometimes a cash rich company just does not get it. Since you are so confident about the future I assume you have shorted Amazon and gone long on Walmart.
- 10y ago

cafebabbe 10y ago

And not a single word about climate change and sustainable growth. Oh well.

faragon 10y ago

Amazon is too big to fail.

RcouF1uZ4gsC 10y ago

I am reminded of the story of Sears. https://en.wikipedia.org/wiki/Sears https://en.wikipedia.org/wiki/Sears When times are good, it seems impossible to imagine how a company could fall, but it can happen to anyone.

dmix 10y ago
Considering they had a great catalog business and totally missed the internet, I don't think that really applies here. Amazon is very well situated to be a part of multiple different industries developing on the horizon. It's media business alone could be huge if they figure out the marketing angle. They are really doing a poor job of pushing "Prime Video". I just went to the website and couldn't figure out how to get back to https://primevideo.com https://primevideo.com which I found last time. They have two different interfaces for browsing videos. I didn't even know they had such a great selection of original content either. I would have tried them out over Netflix for a couple months long ago. This may be their weakness. They are good at building products and the infrastructure that goes with it, but they are bad at marketing. Largely because they didn't have to develop this internal skillset with their ecommerce business. So if anything it will be that that hurts their ventures. I doubt they are going to be a Sears given that they have diversified and future-proofed properly,
- beamatronic 10y ago
  I think what they were trying to say is that some day a historian may state, about Amazon: "Considering they had a great Internet business and totally missed the _________________." Something will perhaps come along after the Internet, which none of us can imagine right now. Sears had been on top of their game, had everything figured out and optimized, but they didn't adapt.
- skinnymuch 10y ago
  In 1990 you wouldn't have the hindsight of saying how Sears messed up. Just like there's no possible hindsight for current times. Sears seemed unbeatable back then. Like amazon now.
10y ago

dgudkov 10y ago

Sometimes I'm afraid to think what would happen if Amazon merges with Google. No other combination would be so terrifying: neither Google+FB, nor FB+Apple, nor anything else. Amazon and Google control so much nowadays. It's probably very good that they're still independent companies and sometimes competitors.

intopieces 10y ago
Speaking as someone who works at one of these companies, we're happy about it too. The "other guy" is what excites me about my work. I would dread being the only player in the market.
- droopyEyelids 10y ago
  Not to be a dick, but someone who works at a company doesn't really have an important opinion with regards to that company's competition in the global market. The owners of a company are who count, and they're generally investors who would be happy to form a monopoly and perform an innovation-free rent extraction on the planet for the rest of time if possible.

saosebastiao 10y ago

Amazon has one of the most phenomenally dangerous vulnerabilities of any company I've ever seen. All it takes is a mildly critical look at how they fund their growth. Amazon requires massive amounts of employees in order to grow. They throw increasingly-more-expensive new employees at increasingly-less-viable new businesses. These businesses are always massively cash-flow negative, and with the right amount of luck some of them might one day turn a profit. They fund this growth in three ways: 1) Issuing new shares of stock, 2) Paying employees with stock, and 3) Funneling cash flow from mature businesses back into the business. Because of accounting difficulties and not-so-explicit public reporting requirements, Amazon gets away with hiding how much they use #1 and #2, and can make people believe that #3 is the dominant source of funding. But the fact that they don't tell us how much #3 contributes is indicative of the fact that it doesn't; if you can't prove positive information, you hide negative information. Now here is the vulnerability: A moderate negative impact to their stock price sets off a chain of events that could destroy the company. The most critical employees holding the ship together are paid mostly via stock...with 2 year vesting times. As long as the stock prices keep growing, they overdeliver on compensation. But if stock prices fall, everybody gets a paycut. If the stock were to drop 50%, these employees would get a 25% pay cut. And they'll jump ship in massive numbers, as you would expect any time a company cuts pay by 25%. Without a cash reserve, all the potential remedies make the problem worse. Amazon could respond by offering more stock to employees. This lowers the stock price through dilution, and people rarely consider stock offers with falling prices to be an incentive. They could respond by selling more stock and making up for the pay in cash, but they would kill their stock price if they needed to sell enough to offset a 25% cut in pay. They could kill off unviable businesses that suck the most cash, but their stock price hinges on the existence of those unviable businesses to make investors believe there is growth potential. They could try to spin off businesses, but the high growth businesses prop their stock price up and the low growth businesses are worth less to the market than the value amazon receives from their cash flow. Everything they could possibly do will reinforce the drop of the stock price and flight of talent. In other words, Amazon can't just reset expectations and lay a few people off. They're sitting on a classic example of a runaway positive feedback loop[0]. Amazon knows it relies on stock speculation of growth potential to not die, that's the reason why you're reading this PR fluff right now. Amazon is the death star; the visible parts make it look like a tool for universal domination, but it's just a small torpedo blast away from nonexistence. [0] https://en.wikipedia.org/wiki/Positive_feedback https://en.wikipedia.org/wiki/Positive_feedback