3 ms·

Amazon doesn't compete on lower salaries, it competes on automation. Amazon actually lobbies for higher salaries, it hurts the competitors who don't use as muc

Amazon doesn't compete on lower salaries, it competes on automation. Amazon actually lobbies for higher salaries, it hurts the competitors who don't use as much automation and are not great at operational efficiency. It's a myth the amazon pay low salaries. They they just optimise the heck out of everything. It's pretty smart in many ways, as its great PR and destroys your competitors if its national law.

bildung 6y ago
At least in Germany they are definitely paying less than other logistics companies. Do you have an example country where amazon pays more than the competitors?
- UK-Al05 6y ago
  https://www.geekwire.com/2018/amazon-raises-minimum-wage-15-hour-vows-lead-push-higher-u-s-minimum-wage/ https://www.geekwire.com/2018/amazon-raises-minimum-wage-15-... A lot of people think they forced amazon take this action, but strategically its great for amazon if they can raise the minimum wage. It will force other people out of business before causes them issues. It's calculated. They deliver more items per unit of labour then anyone else. Collective bargain agreements are more difficult because its not national law. You can pay more but your competitors won't. But unions being unions will always ask for more if they think they can, even if they already pay well compared to other companies. Do you have information on how well they are paid in Germany? I can't find any information on it other than amazon stating they pay well. Companies are a lot smarter than people given them credit for. They use regulation to their own advantage, they're not against it. They will lobby for nice sounding regulation for PR reasons if they've calculated it harm others more then themselves. They just position themselves to take advantage of the regulation. Most of the time companies with large amounts of capital are best place to do this. It's the small companies that get screwed.
Jolter 6y ago
I consider automation to be part of "economy of scale". I don't think salary levels are necessarily the chief way Amazon squeezes their workers harder than competitors - you're right that their minimum wage in the US is higher than the law mandates - but I would also love to see evidence of what their competition is paying. I'd bet they're not on the federal minimum wage, either! It's not all automation though! Amazon is notorious for extreme work pressure. Too few and too short breaks, for example. This will absolutely not fly in Sweden. Not adapting properly to COVID-19 is another example of putting profits before working conditions.
- UK-Al05 6y ago
  I don't think amazon will have problem with this as long as the competition play by the same rules. If its the same rules, amazon will just use its huge amount of capital investment to gain those advantages instead. As it does now. In fact it will in Amazons advantage to raise conditions for entire country if it can. The problem comes when governments intervene to disadvantage foreign companies over native companies to provide an advantage.
bkor 6y ago
> Amazon doesn't compete on lower salaries, it competes on automation. Talking about automation and then the warehouse bit: Automation in warehouses is something that was in the news in Netherlands recently. Some supermarket opened an partly automated warehouse, the news brought it as something unique. From the comments it was clear that various other supermarkets did that already either years ago, recently or they have such more automated warehouses under construction. Apparently fully automated is very difficult. Having an automated warehouse isn't something that another company cannot do and/or requires unique expertise. Apparently various supermarkets hired the same company to build their warehouse.
- UK-Al05 6y ago
  Automation is only a part of it. As you say an automated warehouse anyone can buy from an automated warehouse provider assuming they're big enough to afford it. It's about operational efficiency. It's the culture. Things like kaizen, optimising everything, having teams that work out exactly where the products should go etc etc. How should the packing stations be positioned, how should they be designed? What slows down the workers on the packing stations? Small improvements to the tools they every day. Constant small improvements everyday. Anyone should be able to suggest improvements. Try multiple experiments, most of them won't work. It builds up like a flywheel overtime, and then other companies won't be able to catch up. Companies try to replicate it, buts its harder then just buying a warehouse from company x. Frankly you need the leadership for it, and whole lot of time, money and patience for it to pay off.

bildung 6y ago

At least in Germany they are definitely paying less than other logistics companies. Do you have an example country where amazon pays more than the competitors?

UK-Al05 6y ago
https://www.geekwire.com/2018/amazon-raises-minimum-wage-15-hour-vows-lead-push-higher-u-s-minimum-wage/ https://www.geekwire.com/2018/amazon-raises-minimum-wage-15-... A lot of people think they forced amazon take this action, but strategically its great for amazon if they can raise the minimum wage. It will force other people out of business before causes them issues. It's calculated. They deliver more items per unit of labour then anyone else. Collective bargain agreements are more difficult because its not national law. You can pay more but your competitors won't. But unions being unions will always ask for more if they think they can, even if they already pay well compared to other companies. Do you have information on how well they are paid in Germany? I can't find any information on it other than amazon stating they pay well. Companies are a lot smarter than people given them credit for. They use regulation to their own advantage, they're not against it. They will lobby for nice sounding regulation for PR reasons if they've calculated it harm others more then themselves. They just position themselves to take advantage of the regulation. Most of the time companies with large amounts of capital are best place to do this. It's the small companies that get screwed.

Jolter 6y ago

I consider automation to be part of "economy of scale". I don't think salary levels are necessarily the chief way Amazon squeezes their workers harder than competitors - you're right that their minimum wage in the US is higher than the law mandates - but I would also love to see evidence of what their competition is paying. I'd bet they're not on the federal minimum wage, either! It's not all automation though! Amazon is notorious for extreme work pressure. Too few and too short breaks, for example. This will absolutely not fly in Sweden. Not adapting properly to COVID-19 is another example of putting profits before working conditions.

UK-Al05 6y ago
I don't think amazon will have problem with this as long as the competition play by the same rules. If its the same rules, amazon will just use its huge amount of capital investment to gain those advantages instead. As it does now. In fact it will in Amazons advantage to raise conditions for entire country if it can. The problem comes when governments intervene to disadvantage foreign companies over native companies to provide an advantage.

bkor 6y ago

> Amazon doesn't compete on lower salaries, it competes on automation. Talking about automation and then the warehouse bit: Automation in warehouses is something that was in the news in Netherlands recently. Some supermarket opened an partly automated warehouse, the news brought it as something unique. From the comments it was clear that various other supermarkets did that already either years ago, recently or they have such more automated warehouses under construction. Apparently fully automated is very difficult. Having an automated warehouse isn't something that another company cannot do and/or requires unique expertise. Apparently various supermarkets hired the same company to build their warehouse.

UK-Al05 6y ago
Automation is only a part of it. As you say an automated warehouse anyone can buy from an automated warehouse provider assuming they're big enough to afford it. It's about operational efficiency. It's the culture. Things like kaizen, optimising everything, having teams that work out exactly where the products should go etc etc. How should the packing stations be positioned, how should they be designed? What slows down the workers on the packing stations? Small improvements to the tools they every day. Constant small improvements everyday. Anyone should be able to suggest improvements. Try multiple experiments, most of them won't work. It builds up like a flywheel overtime, and then other companies won't be able to catch up. Companies try to replicate it, buts its harder then just buying a warehouse from company x. Frankly you need the leadership for it, and whole lot of time, money and patience for it to pay off.