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Amazon convinces investors to eschew profits. Unusual. Result: lower cost of capital. Amazon benefits from extended tax holiday. Result: lower cost of doing bu

Amazon convinces investors to eschew profits. Unusual. Result: lower cost of capital. Amazon benefits from extended tax holiday. Result: lower cost of doing business. Amazon appropriates FOSS. Result: lower cost of development. Amazon knocks off successful products, competing with their own partners in their own walled garden. Result: lower cost of product development. Amazon allows counterfeit products, fake reviews, and other fraud. Result: lower cost of operations. Amazon uses gig workers. Result: lower cost of labor. I'm sensing a pattern... Amazon's success, their prime (pun!) advantage, is built on aggressively avoiding costs normally incurred by other businesses. They perfected WalMart's strategy. Sure, they've done some clever stuff. Throw enough spaghetti, some of it will stick. Free shipping with Prime membership is akin to Tencent's freemium (genius). And figuring out how to sell excess capacity was cool. I'm sure a lot of other leaders would share Bezos' tolerance for risk, commitment to long term plans, if only they weren't micromanaged by Wall St.

remram 6y ago
Any single entry on that "clever stuff" lists directly hurts someone and destroy the ecosystem in the long run.
- specialist 6y ago
  Poor phrasing on my part. I mean decisions which weren't obviously correct beforehand. I certainly didn't grok AWS for way too long. And there was plenty of concern trolling about free shipping, eg "how long can they sustain this loss leader?!". Very long when you have free capital, certainly more than anyone else. It fortuitously parlayed into amazing customer retention and upselling. What Prof G (Scott Galloway) has coined the rundle (recurring revenue bundle). Proved so effective, in fact, that everyone's now doing subscriptions for everything.
- astrange 6y ago
  Getting investors to give Bezos free money for being Bezos was actually pretty good for customers and got everyone free one-day shipping. Amazon is an investor charity like Uber, not a business.
  - peterwoerner 6y ago
    Right now it is better for the customers, but that doesn't mean it will continue to be this. You assume that once/if Bezos crushes the rest of the competitors he won't start significantly increasing prices. We saw something similar in the 90s where health care prices plummeted as the now winners developed and convinced the public that their monopolies were good. Now they are able increase prices by 15-20%/yr into the foreseeable future. This is not a prediction (per se), but a statement that we should realize that monopolistic might be good for the consumer in the short term but bad in the long term.
    - astrange 6y ago
      There appear to be more competitors than ever to me. Amazon doesn't have much of a moat in their retail business (they do in AWS) since your lock in is only that you've bought Prime for the year; they're merely very good at it.
      - jfim 6y ago
        They do though. If one has paid for Prime, they might not even think about shopping elsewhere because they get Free n day shipping, for whatever value of n Amazon has nowadays.
- killingtime74 6y ago
  Do you mean competition?
ako 6y ago
Yes, and we are all voting with our wallets by buying the cheapest products. Just like with China. And just like with Chinese production, we'll regret it when it's too late.
pjmlp 6y ago
HNers praise how great Amazon is for product XYZ. HNers praise how great Amazon is for Graviton. HNers praise how great Amazon is for leaving Azure and GCP on the dust. HNers praise how great Amazon is for FOSS project XYZ. HNers bash Amazon because yet another project made the wrong assumptions how to make money out of MIT/BSD style licenses. Yep, I am seeing a pattern definitely.
- samatman 6y ago
  This kind of critique is basically never valid. Any time I've seen it, it's glaringly obvious that HN users come down on both sides of the issue. Pattern-matching detractors of your position as dominant in a particular venue's discussion is a common partisan failure mode. Doesn't mean you have to succumb to it.
  - johncena33 6y ago
    Sorry I hate to disagree. HN has lost its way last few years. The amount of FUD spread against Google on HN is mind-boggling. Every single day there is at least one anti-Google post on HN front page. Most of the content is the old broken record. I simple hide these posts from newsfeed. But the moderators have chosen to look other way. On top of that, lots of discussion has become simply low-quality. The comments on technical posts turn into complaining about something not related to the technical content rather about the product. The amount of complaining and whining is through the roof. Mods should look into "Whine Wednesday" type threads to keep the off-topic whinings and complaining invading every single thread.
    - meesles 6y ago
      And here you are posting your pro-Google stance on multiple comments in the same thread: https://news.ycombinator.com/item?id=25839278 https://news.ycombinator.com/item?id=25839278 We should realize that we all succumb to the same biases when communicating in an online forum and exhibit the same tropes - exasperation at the loss of our 'secret hangout', frustration that companies we like get bashed repeatedly, and over-analyzing and drawing broad conclusions from strangers on the internet. Try to enjoy the good responses and don't get so bothered by the rest! Or maybe there's another community that is more enjoyable out there. Personally I can put up with some of the noise and repeated points like yours because there's still plenty of value for me in these posts. Best of luck.
pankajdoharey 6y ago
Isnt that ultimately every business trying to do save costs? I dont see anything wrong as long as it is legal. ElasticSearch here wants to pervade the notion that they are open but wants to exclusively maintain cloud hosted versions. Thats not how opensource works, Open source works through open collaboration and feeedom. Opensource forks are completely valid as long as they dont violate the licensing terms.
arcturus17 6y ago
> And figuring out how to sell excess capacity was cool If you're referring to how Amazon Web Services was born out of the excess server capacity in their eCommerce service, this has been debunked as a myth [1] Bezos knew what he was doing. [1] https://www.networkworld.com/article/2891297/the-myth-about-how-amazon-s-web-service-started-just-won-t-die.html https://www.networkworld.com/article/2891297/the-myth-about-...

remram 6y ago

Any single entry on that "clever stuff" lists directly hurts someone and destroy the ecosystem in the long run.

specialist 6y ago
Poor phrasing on my part. I mean decisions which weren't obviously correct beforehand. I certainly didn't grok AWS for way too long. And there was plenty of concern trolling about free shipping, eg "how long can they sustain this loss leader?!". Very long when you have free capital, certainly more than anyone else. It fortuitously parlayed into amazing customer retention and upselling. What Prof G (Scott Galloway) has coined the rundle (recurring revenue bundle). Proved so effective, in fact, that everyone's now doing subscriptions for everything.
astrange 6y ago
Getting investors to give Bezos free money for being Bezos was actually pretty good for customers and got everyone free one-day shipping. Amazon is an investor charity like Uber, not a business.
- peterwoerner 6y ago
  Right now it is better for the customers, but that doesn't mean it will continue to be this. You assume that once/if Bezos crushes the rest of the competitors he won't start significantly increasing prices. We saw something similar in the 90s where health care prices plummeted as the now winners developed and convinced the public that their monopolies were good. Now they are able increase prices by 15-20%/yr into the foreseeable future. This is not a prediction (per se), but a statement that we should realize that monopolistic might be good for the consumer in the short term but bad in the long term.
  - astrange 6y ago
    There appear to be more competitors than ever to me. Amazon doesn't have much of a moat in their retail business (they do in AWS) since your lock in is only that you've bought Prime for the year; they're merely very good at it.
    - jfim 6y ago
      They do though. If one has paid for Prime, they might not even think about shopping elsewhere because they get Free n day shipping, for whatever value of n Amazon has nowadays.
killingtime74 6y ago
Do you mean competition?

ako 6y ago

Yes, and we are all voting with our wallets by buying the cheapest products. Just like with China. And just like with Chinese production, we'll regret it when it's too late.

pjmlp 6y ago

HNers praise how great Amazon is for product XYZ. HNers praise how great Amazon is for Graviton. HNers praise how great Amazon is for leaving Azure and GCP on the dust. HNers praise how great Amazon is for FOSS project XYZ. HNers bash Amazon because yet another project made the wrong assumptions how to make money out of MIT/BSD style licenses. Yep, I am seeing a pattern definitely.

samatman 6y ago
This kind of critique is basically never valid. Any time I've seen it, it's glaringly obvious that HN users come down on both sides of the issue. Pattern-matching detractors of your position as dominant in a particular venue's discussion is a common partisan failure mode. Doesn't mean you have to succumb to it.
- johncena33 6y ago
  Sorry I hate to disagree. HN has lost its way last few years. The amount of FUD spread against Google on HN is mind-boggling. Every single day there is at least one anti-Google post on HN front page. Most of the content is the old broken record. I simple hide these posts from newsfeed. But the moderators have chosen to look other way. On top of that, lots of discussion has become simply low-quality. The comments on technical posts turn into complaining about something not related to the technical content rather about the product. The amount of complaining and whining is through the roof. Mods should look into "Whine Wednesday" type threads to keep the off-topic whinings and complaining invading every single thread.
  - meesles 6y ago
    And here you are posting your pro-Google stance on multiple comments in the same thread: https://news.ycombinator.com/item?id=25839278 https://news.ycombinator.com/item?id=25839278 We should realize that we all succumb to the same biases when communicating in an online forum and exhibit the same tropes - exasperation at the loss of our 'secret hangout', frustration that companies we like get bashed repeatedly, and over-analyzing and drawing broad conclusions from strangers on the internet. Try to enjoy the good responses and don't get so bothered by the rest! Or maybe there's another community that is more enjoyable out there. Personally I can put up with some of the noise and repeated points like yours because there's still plenty of value for me in these posts. Best of luck.

pankajdoharey 6y ago

Isnt that ultimately every business trying to do save costs? I dont see anything wrong as long as it is legal. ElasticSearch here wants to pervade the notion that they are open but wants to exclusively maintain cloud hosted versions. Thats not how opensource works, Open source works through open collaboration and feeedom. Opensource forks are completely valid as long as they dont violate the licensing terms.

arcturus17 6y ago

> And figuring out how to sell excess capacity was cool If you're referring to how Amazon Web Services was born out of the excess server capacity in their eCommerce service, this has been debunked as a myth [1] Bezos knew what he was doing. [1] https://www.networkworld.com/article/2891297/the-myth-about-how-amazon-s-web-service-started-just-won-t-die.html https://www.networkworld.com/article/2891297/the-myth-about-...