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Aren't their margins like, razor-thin? Obviously at Amazon scale, even razor-thin margins mean huge profits, but that doesn't mean that you have any wiggle room

Aren't their margins like, razor-thin? Obviously at Amazon scale, even razor-thin margins mean huge profits, but that doesn't mean that you have any wiggle room within the profit. Imagine you have 100 people working for you, and off of each person, you make 10 cents a day. Now imagine you grow your business and you have 1,000,000 people working for you. At 10 cents per person per day, you're now making $100,000 a DAY! You're rich! If you wanted to give back to your employees, just remember that each one produces 10 cents of profit. If you gave them all 10 cents extra per day, it means nothing to any one of them, but your business now makes $0 profit.

calcifer 8y ago
If your margins are so thin that people are forced to pee in bottles instead of going to the bathroom then your company shouldn't exist.
- prolikewh0a 8y ago
  Also if you're having employees carried out because they can't keep productivity up during 100F + east coast humidity, your company shouldn't exist. http://techland.time.com/2011/09/21/amazon-employees-carried-out-of-115-degree-warehouse-by-paramedics/ http://techland.time.com/2011/09/21/amazon-employees-carried...
- ralusek 8y ago
  They're not forced to do anything, including work there.
  - throwawaymaroon 8y ago
    haha look at this fucking loser here.
  - TaylorAlexander 8y ago
    Not directly. But since people like Bezos own most of the productive machinery of the world, people really don’t have a choice except to work for one of the capital owners. In past times, people were free to work the land for themselves, as the land was held in common. Now somebody owns everything, and those of us who want to eat actually have almost “no choice” but to work for someone else.
  - foxyv 8y ago
    Unless Amazon and the other mega-corps destroyed all the other companies that you could have worked for. Or if all the other companies have the same policies and work hard to set a fixed wage. Or if you have a criminal record and only Amazon will take you to pick packages...
- nojvek 8y ago
  Seriously, there should be a law against this. This is almost bordering on inhumane practices. A billionaire built on modern slavery?
prolikewh0a 8y ago
Your margins are so thin that you're worth $150,000,000,000. Right.
- antonvs 8y ago
  That's largely the value of his stock, though. Not defending him or the inequality as such, but it's not as if he's got $150 bn in cash that he could just distribute to his employees.
  - jtolmar 8y ago
    He has $150 bn in stock that he could just distribute to his employees.
    - jacques_chester 8y ago
      It would not remain worth $150 billion if he did. It would crash quite spectacularly.
      - RugnirViking 8y ago
        You realise that right now he has personally the money to give each and every one of his employees $256 000 in cash or stock options. Thats more than many of his employees make in 5 years. Most of these people don't own their own house. Many of them have probably never travelled outside of the country. That's not his entire company, thats just his own personal wealth. Imagine if his c-suite and upper management all pitched in too.
        jacques_chester 8y ago
        He does not have it as money, he has shares. Rich people do not hold substantial cash or bank deposits; at their scale it is almost criminally wasteful to do so. His shares are market-priced. He is "worth" $150Bn because of today's share price, but there is no single pool of money available to buy him out. So in practice, he is worth a billion here, a billion there, so long as he doesn't scare the fishes. If he transferred his shares to his employees, the price would crash and each employee's slice of the pie would not be worth $256,000 any more. The same goes for creating a massive new supply of RSUs or share options. These dilute existing shareholders who, unsurprisingly, resent that other people get for free or at a discount what they paid for at market price. Accounting rules require these to be considered as expenses, meaning the reported profit or loss looks worse. What would work better for Amazon's lowest-paid workers would be a higher wage. It's a more predictable and effective source of wealth sharing than showering lottery tickets from a helicopter.
smadge 8y ago
Amazon’s net income per employee is 33,000 USD [0]. This means every Amazon employee could get a 30,000 USD raise and Amazon would still be profitable. [0] https://csimarket.com/stocks/singleEfficiencyeit.php?code=AMZN https://csimarket.com/stocks/singleEfficiencyeit.php?code=AM...
- ralusek 8y ago
  Net income, like the cost of their rent, inventory, infrastructure, R&D, advertising, acquisitions are all taken into account before coming to this figure? Or is it just employee costs like salary and benefits? I find that hard to believe, but if it's the case, then they clearly don't have razor thin margins, and what I said before simply doesn't apply to Amazon.
  - smadge 8y ago
    The number is the net revenue (income minus all operating expenses, including salaries/wages, facilities, goods, taxes, etc) divided by the number of employees.
  - adventured 8y ago
    For 2017 their net income per employee was around $6,000. The parent claim is off by a factor of five. $3b in net income for fiscal 2017, and an average of perhaps 450k-500k employees for the whole year. For 2018 they might produce $6b in net income, assuming they don't go on a big spending spree (which they're prone to do). They'll average perhaps 600,000 to 650,000 employees for 2018. So their net income per employee ratio is going to be closer to $10,000. It'll still be nowhere near the $33,000 the parent claims. $33,000 in net income per employee would require near $20b in net income this year. Amazon does in fact have extraordinarily razor thin margins, in their retail business. AWS is very profitable, with ~25% style operating income margins. It's providing all of the net income Amazon is generating now, retail essentially reinvests its thin margins right back into growth and improving fulfillment. Walmart has 2.5% to 3% net income margins for example. Facebook is typically up at 40% to 50% for comical contrast. Amazon's retail business will spend most of its existence with 2% to 5% type margins. Costco had a 2% net income margin for 2017. Target was at 3.9%. High volume, low margin retail is a horrendous business, very few operators can survive with such perpetually low margins. You have to execute at an extraordinary level.

calcifer 8y ago

If your margins are so thin that people are forced to pee in bottles instead of going to the bathroom then your company shouldn't exist.

prolikewh0a 8y ago
Also if you're having employees carried out because they can't keep productivity up during 100F + east coast humidity, your company shouldn't exist. http://techland.time.com/2011/09/21/amazon-employees-carried-out-of-115-degree-warehouse-by-paramedics/ http://techland.time.com/2011/09/21/amazon-employees-carried...
ralusek 8y ago
They're not forced to do anything, including work there.
- throwawaymaroon 8y ago
  haha look at this fucking loser here.
- TaylorAlexander 8y ago
  Not directly. But since people like Bezos own most of the productive machinery of the world, people really don’t have a choice except to work for one of the capital owners. In past times, people were free to work the land for themselves, as the land was held in common. Now somebody owns everything, and those of us who want to eat actually have almost “no choice” but to work for someone else.
- foxyv 8y ago
  Unless Amazon and the other mega-corps destroyed all the other companies that you could have worked for. Or if all the other companies have the same policies and work hard to set a fixed wage. Or if you have a criminal record and only Amazon will take you to pick packages...
nojvek 8y ago
Seriously, there should be a law against this. This is almost bordering on inhumane practices. A billionaire built on modern slavery?

prolikewh0a 8y ago

Your margins are so thin that you're worth $150,000,000,000. Right.

antonvs 8y ago
That's largely the value of his stock, though. Not defending him or the inequality as such, but it's not as if he's got $150 bn in cash that he could just distribute to his employees.
- jtolmar 8y ago
  He has $150 bn in stock that he could just distribute to his employees.
  - jacques_chester 8y ago
    It would not remain worth $150 billion if he did. It would crash quite spectacularly.
    - RugnirViking 8y ago
      You realise that right now he has personally the money to give each and every one of his employees $256 000 in cash or stock options. Thats more than many of his employees make in 5 years. Most of these people don't own their own house. Many of them have probably never travelled outside of the country. That's not his entire company, thats just his own personal wealth. Imagine if his c-suite and upper management all pitched in too.
      - jacques_chester 8y ago
        He does not have it as money, he has shares. Rich people do not hold substantial cash or bank deposits; at their scale it is almost criminally wasteful to do so. His shares are market-priced. He is "worth" $150Bn because of today's share price, but there is no single pool of money available to buy him out. So in practice, he is worth a billion here, a billion there, so long as he doesn't scare the fishes. If he transferred his shares to his employees, the price would crash and each employee's slice of the pie would not be worth $256,000 any more. The same goes for creating a massive new supply of RSUs or share options. These dilute existing shareholders who, unsurprisingly, resent that other people get for free or at a discount what they paid for at market price. Accounting rules require these to be considered as expenses, meaning the reported profit or loss looks worse. What would work better for Amazon's lowest-paid workers would be a higher wage. It's a more predictable and effective source of wealth sharing than showering lottery tickets from a helicopter.

smadge 8y ago

Amazon’s net income per employee is 33,000 USD [0]. This means every Amazon employee could get a 30,000 USD raise and Amazon would still be profitable. [0] https://csimarket.com/stocks/singleEfficiencyeit.php?code=AMZN https://csimarket.com/stocks/singleEfficiencyeit.php?code=AM...

ralusek 8y ago
Net income, like the cost of their rent, inventory, infrastructure, R&D, advertising, acquisitions are all taken into account before coming to this figure? Or is it just employee costs like salary and benefits? I find that hard to believe, but if it's the case, then they clearly don't have razor thin margins, and what I said before simply doesn't apply to Amazon.
- smadge 8y ago
  The number is the net revenue (income minus all operating expenses, including salaries/wages, facilities, goods, taxes, etc) divided by the number of employees.
- adventured 8y ago
  For 2017 their net income per employee was around $6,000. The parent claim is off by a factor of five. $3b in net income for fiscal 2017, and an average of perhaps 450k-500k employees for the whole year. For 2018 they might produce $6b in net income, assuming they don't go on a big spending spree (which they're prone to do). They'll average perhaps 600,000 to 650,000 employees for 2018. So their net income per employee ratio is going to be closer to $10,000. It'll still be nowhere near the $33,000 the parent claims. $33,000 in net income per employee would require near $20b in net income this year. Amazon does in fact have extraordinarily razor thin margins, in their retail business. AWS is very profitable, with ~25% style operating income margins. It's providing all of the net income Amazon is generating now, retail essentially reinvests its thin margins right back into growth and improving fulfillment. Walmart has 2.5% to 3% net income margins for example. Facebook is typically up at 40% to 50% for comical contrast. Amazon's retail business will spend most of its existence with 2% to 5% type margins. Costco had a 2% net income margin for 2017. Target was at 3.9%. High volume, low margin retail is a horrendous business, very few operators can survive with such perpetually low margins. You have to execute at an extraordinary level.