8 ms·

> let’s value the time savings at $10 per hour, which is conservative I’ll never understand this. Unless your time can be directly traded for money, it has no

> let’s value the time savings at $10 per hour, which is conservative I’ll never understand this. Unless your time can be directly traded for money, it has no monetary value. I think it’s just a trick people use to talk themselves into spending money. So, in the context of this rah-rah Amazon email, maybe I do get it.

infinityplus1 6y ago
Opportunity cost can be a big thing. You could be working for money instead of doing something which doesn't increase your wealth.
- dazc 6y ago
  Like driving around from store to store comparing products and, often, not even coming back with what you went looking for...
  - eplanit 6y ago
    It's amazing that now a whole generation has not had that experience (at least to a far, far lesser degree), and probably doesn't realize that that's how it was.
    - xyzzy123 6y ago
      There are some distinct but comparable Internet shopping experiences. Every so often I think about buying some thingy or other, then get lost in a rabbit hole comparing all the options and sifting through fake reviews. Sometimes I'll "come to", having wasted 45 minutes, close all the tabs, realising I never actually needed the thing anyway.
- benjaminjosephw 6y ago
  Using money as a way to evaluate the worth of how you spend your time carries a huge set of biases with it. Should I put a monetary value on playing with my kids so I can justify it against making an extra sales call? As a metaphor an "opportunity costs" is helpful for thinking about the value of time but it becomes an ideology in itself if you take it literally.
  - xyzelement 6y ago
    > Should I put a monetary value on playing with my kids so I can justify it against making an extra sales call? I think we do that implicitly. You would probably love to play with your kid all day but you chose to make some sales calls so you have money to support the family. But you don't make all the sales calls you could make so that you have family time. So while sure we don't put a monetary number on our hours explicitly, we do have points at which selling our time is and isn't worth it.
- paulcole 6y ago
  Most people can’t trade one hour of the time when they’re not working for $10.
- mikepurvis 6y ago
  Could you, though? Even gig work at $10/hr is not exactly something most people are set up to just opt into for the tiny slices of their day that would otherwise be "trip to grocery store." I agree that the convenience of Amazon does create value for customers and that it makes sense to try to quantify that somehow; otoh that convenience also manifests negatively in things like unneeded purchases and comparison shopping paralysis. So I think the math on it is indeed a bit suspect.
  - gowld 6y ago
    Why take a trip to the grocery store for yourself, when you can shop for someone else, to make $10 that you can use to pay someone else to shop for you?
    - mikepurvis 6y ago
      Or the other side of it, which is to see shopping as an experience and part of life, rather than something purely transactional where you pay money and receive goods. Though I suppose as big box and discount retail has eaten the lunch of specialty stores, malls, and so on, many of those other benefits (discovery, browsing a curated selection of products, trying things out/on, conversing with a knowledgeable salesperson, etc) have faded somewhat. But on the far end of all this, I'd expect the only brick & mortar stores who are going to "make it" against online retail will be those who can not just promise and deliver on these extras, but also persuade their customers that the extras are worth paying for, whether that's via higher prices, a direct patronage model, or the ability to offer an exclusive paid product not available online.
cmeacham98 6y ago
> Unless your time can be directly traded for money I believe the common name for this transaction is "work".
- paulcole 6y ago
  Yes, but the overwhelming majority of people have a work schedule. I can’t trade my time at 7PM for $10 unless I want to find a second job.
  - de_keyboard 6y ago
    Work is not perfectly elastic but time is still by and large tradeable for money. Maybe get on Uber?
    - Supermancho 6y ago
      > Work is not perfectly elastic but time is still by and large tradeable for money. Specific results are tradeable for money. I get paid far too much for what I do most of the time, with small windows of specialized action that justifies the waste. It's sloth and inefficacy (due to an inability to measure efficacy) that makes it look like time for money, when it's largely an accounting trick that is more like a payment schedule than a time-for-money.
- staz 6y ago
  Very few people can choose directly to work more or less to gain accordingly. Even freelancer may have some leeway but it's quite limited.
  - tfehring 6y ago
    It’s harder when you’re salaried, but in service sector jobs the success rate from asking your manager for more or fewer hours is usually pretty decent IME. Less so if you’re asking for OT but only because that’s more expensive.
busymom0 6y ago
Successful busy people do value time for money. Elon Musk for example. He has very less free time with running multiple business and having so many kids. Would you want in an hour long line outside McDonald’s for example if they offered a free burger? If yes, then it means you think your time is worth the cost of that burger $3 per hour.
- GoodJokes 6y ago
  “Successful people” is too general. I think you are talking about sociopaths.
- tacitusarc 6y ago
  This is like one of those things unimaginative economists say. Maybe there is no way to pay to cut in line. Maybe it's a small town I can't just drive somewhere else to get food, and I have low blood sugar, and I know I'll get to the front of the line faster than trying to find some other place to buy food. Maybe it's test sample of a new product they have and I'm trying to compete, and the only way to try it is to wait in the long line. I'm sure there's a dozen more creative explanations for your proposed situation. Just because I'm willing to spend time on something doesn't mean I think my time is worth less than the cost of paying not to spend it.
- paulcole 6y ago
  > If yes, then it means you think your time is worth the cost of that burger $3 per hour. What I think my time is worth and what someone is willing to pay me for that time are 2 separate things.
LandR 6y ago
Yeah, I've heard friends say that they don't do DIY at their house, or fix basic things because the plumber / joiner / whoever earns less than them per hour. SO if they do it themeselves they are losing money... These people work 9-5 and are paid a salary. I don't get it. Do it after work? Or on a day off. Or weekend...
- dazc 6y ago
  I could but don't want to spend my spare time changing the brakes on my car. It makes sense to pay someone who can do it efficiently and properly as part of his/her job.
  - dharmab 6y ago
    I DIY those jobs exactly because I want the job to be done properly.
    - MattRix 6y ago
      Many people don’t have the time or desire to become an expert at every little DIY task.
      - dharmab 6y ago
        And those people are easily parted with their money :) You have to be making a very high income for DIY to not make sense. Paying someone skilled to do my brakes costs over $80/hr. And paying someone unskilled leads to showing up on /r/justrolledintotheshop later. Meanwhile with $600 or so of tools you can do all the basic maintenance for the rest of the car's lifetime (and re-use those tools for home improvement and other jobs). Something simple like brakes is a couple of hours and you can listen to a podcast or audiobook.
        MattRix 6y ago
        If I was going to do a lot of DIY stuff, the last thing I would do would be my brakes. I’ve got no problem paying for the professional there.
davidrm 6y ago
I partially agree with your comment, the math is fuzzy, and I'd say that saving 5 minutes per day is absolutely worthless, I don't care about that time, it's a rounding error. There's a cliff when doing this kind of math. But I prefer to invert this thought experiment - my time isn't worth $x because I intend to use that time for something I can invoice, it's the amount you'd _have_ to pay for my time in order to incentivize me not to spend it walking around the park, watching a movie or whatever but rather do some marketable work. So yes, I kind of know the value of my time, I'm willing to pay $x not to be bothered with some things, e.g. a washing machine. I don't care about spending +10 minutes when buying some item.
- paulcole 6y ago
  > So yes, I kind of know the value of my time, I'm willing to pay $x not to be bothered with some things, e.g. a washing machine Yes but that’s an arbitrary value you’re assigning to your time not the the value someone else is willing to give you for your time.
sbarre 6y ago
I think trying to do actual money math on this is the wrong approach.. I totally get why they did in this letter, and I also think it's a laughable reach to talk about $126B in "value creation" in that way.. But at the same time, I do value my own time, in terms of being free to choose how I spend it. Ordering from Amazon (or online in general) has absolutely increased that freedom for me. Rather than having to find and drive to a store to get something (and I think 1 hour per trip is a good metric), I spend 3 minutes ordering it, and it arrives at my door the next day. Meanwhile I spend that hour doing other things that are more valuable to me. I may not acknowledge this each time, but in aggregate it certainly adds up. So it's not about making more money as much as it's about the value of reducing toil for yourself.
throwaway98797 6y ago
Time money is not one to one. You have time currency and you have financial currency. they are not divisible in the same way. they have some additive components though. If I spend 5 hours a week on house work like cleaning and then i use money to hire a person to do it for me i now have 5 hours of time currency. that time currency could be invested into enjoyment, learning, or for some direct financial currency creation. this how it works, your likely being overly litteral material making your life worse. as normal people will view you as obtuse vs the wise person you think you are.
jkingsbery 6y ago
The way I've started to look at it is: I don't expect I would be able to make $10 in that hour, but if I could skip doing chore X (cleaning, going to the store, whatever) and instead spend an hour going to the park with my wife and kids, or having lunch with them, or going for a run, that experience would be worth $10 (or probably more) to me. So it's not about trading time for money, it's about paying to trade an unpleasurable experience (e.g. standing in line at the grocery store) for a pleasurable one (drawing or having a hand stand competition with your kids).
kgin 6y ago
I’ve always wondered why people talk about their time like this. Unless I’m taking an hour off of work, that hour is not worth any specific amount of money.

infinityplus1 6y ago

Opportunity cost can be a big thing. You could be working for money instead of doing something which doesn't increase your wealth.

dazc 6y ago
Like driving around from store to store comparing products and, often, not even coming back with what you went looking for...
- eplanit 6y ago
  It's amazing that now a whole generation has not had that experience (at least to a far, far lesser degree), and probably doesn't realize that that's how it was.
  - xyzzy123 6y ago
    There are some distinct but comparable Internet shopping experiences. Every so often I think about buying some thingy or other, then get lost in a rabbit hole comparing all the options and sifting through fake reviews. Sometimes I'll "come to", having wasted 45 minutes, close all the tabs, realising I never actually needed the thing anyway.
benjaminjosephw 6y ago
Using money as a way to evaluate the worth of how you spend your time carries a huge set of biases with it. Should I put a monetary value on playing with my kids so I can justify it against making an extra sales call? As a metaphor an "opportunity costs" is helpful for thinking about the value of time but it becomes an ideology in itself if you take it literally.
- xyzelement 6y ago
  > Should I put a monetary value on playing with my kids so I can justify it against making an extra sales call? I think we do that implicitly. You would probably love to play with your kid all day but you chose to make some sales calls so you have money to support the family. But you don't make all the sales calls you could make so that you have family time. So while sure we don't put a monetary number on our hours explicitly, we do have points at which selling our time is and isn't worth it.
paulcole 6y ago
Most people can’t trade one hour of the time when they’re not working for $10.
mikepurvis 6y ago
Could you, though? Even gig work at $10/hr is not exactly something most people are set up to just opt into for the tiny slices of their day that would otherwise be "trip to grocery store." I agree that the convenience of Amazon does create value for customers and that it makes sense to try to quantify that somehow; otoh that convenience also manifests negatively in things like unneeded purchases and comparison shopping paralysis. So I think the math on it is indeed a bit suspect.
- gowld 6y ago
  Why take a trip to the grocery store for yourself, when you can shop for someone else, to make $10 that you can use to pay someone else to shop for you?
  - mikepurvis 6y ago
    Or the other side of it, which is to see shopping as an experience and part of life, rather than something purely transactional where you pay money and receive goods. Though I suppose as big box and discount retail has eaten the lunch of specialty stores, malls, and so on, many of those other benefits (discovery, browsing a curated selection of products, trying things out/on, conversing with a knowledgeable salesperson, etc) have faded somewhat. But on the far end of all this, I'd expect the only brick & mortar stores who are going to "make it" against online retail will be those who can not just promise and deliver on these extras, but also persuade their customers that the extras are worth paying for, whether that's via higher prices, a direct patronage model, or the ability to offer an exclusive paid product not available online.

cmeacham98 6y ago

> Unless your time can be directly traded for money I believe the common name for this transaction is "work".

paulcole 6y ago
Yes, but the overwhelming majority of people have a work schedule. I can’t trade my time at 7PM for $10 unless I want to find a second job.
- de_keyboard 6y ago
  Work is not perfectly elastic but time is still by and large tradeable for money. Maybe get on Uber?
  - Supermancho 6y ago
    > Work is not perfectly elastic but time is still by and large tradeable for money. Specific results are tradeable for money. I get paid far too much for what I do most of the time, with small windows of specialized action that justifies the waste. It's sloth and inefficacy (due to an inability to measure efficacy) that makes it look like time for money, when it's largely an accounting trick that is more like a payment schedule than a time-for-money.
staz 6y ago
Very few people can choose directly to work more or less to gain accordingly. Even freelancer may have some leeway but it's quite limited.
- tfehring 6y ago
  It’s harder when you’re salaried, but in service sector jobs the success rate from asking your manager for more or fewer hours is usually pretty decent IME. Less so if you’re asking for OT but only because that’s more expensive.

busymom0 6y ago

Successful busy people do value time for money. Elon Musk for example. He has very less free time with running multiple business and having so many kids. Would you want in an hour long line outside McDonald’s for example if they offered a free burger? If yes, then it means you think your time is worth the cost of that burger $3 per hour.

GoodJokes 6y ago
“Successful people” is too general. I think you are talking about sociopaths.
tacitusarc 6y ago
This is like one of those things unimaginative economists say. Maybe there is no way to pay to cut in line. Maybe it's a small town I can't just drive somewhere else to get food, and I have low blood sugar, and I know I'll get to the front of the line faster than trying to find some other place to buy food. Maybe it's test sample of a new product they have and I'm trying to compete, and the only way to try it is to wait in the long line. I'm sure there's a dozen more creative explanations for your proposed situation. Just because I'm willing to spend time on something doesn't mean I think my time is worth less than the cost of paying not to spend it.
paulcole 6y ago
> If yes, then it means you think your time is worth the cost of that burger $3 per hour. What I think my time is worth and what someone is willing to pay me for that time are 2 separate things.

LandR 6y ago

Yeah, I've heard friends say that they don't do DIY at their house, or fix basic things because the plumber / joiner / whoever earns less than them per hour. SO if they do it themeselves they are losing money... These people work 9-5 and are paid a salary. I don't get it. Do it after work? Or on a day off. Or weekend...

dazc 6y ago
I could but don't want to spend my spare time changing the brakes on my car. It makes sense to pay someone who can do it efficiently and properly as part of his/her job.
- dharmab 6y ago
  I DIY those jobs exactly because I want the job to be done properly.
  - MattRix 6y ago
    Many people don’t have the time or desire to become an expert at every little DIY task.
    - dharmab 6y ago
      And those people are easily parted with their money :) You have to be making a very high income for DIY to not make sense. Paying someone skilled to do my brakes costs over $80/hr. And paying someone unskilled leads to showing up on /r/justrolledintotheshop later. Meanwhile with $600 or so of tools you can do all the basic maintenance for the rest of the car's lifetime (and re-use those tools for home improvement and other jobs). Something simple like brakes is a couple of hours and you can listen to a podcast or audiobook.
      - MattRix 6y ago
        If I was going to do a lot of DIY stuff, the last thing I would do would be my brakes. I’ve got no problem paying for the professional there.

davidrm 6y ago

I partially agree with your comment, the math is fuzzy, and I'd say that saving 5 minutes per day is absolutely worthless, I don't care about that time, it's a rounding error. There's a cliff when doing this kind of math. But I prefer to invert this thought experiment - my time isn't worth $x because I intend to use that time for something I can invoice, it's the amount you'd _have_ to pay for my time in order to incentivize me not to spend it walking around the park, watching a movie or whatever but rather do some marketable work. So yes, I kind of know the value of my time, I'm willing to pay $x not to be bothered with some things, e.g. a washing machine. I don't care about spending +10 minutes when buying some item.

paulcole 6y ago
> So yes, I kind of know the value of my time, I'm willing to pay $x not to be bothered with some things, e.g. a washing machine Yes but that’s an arbitrary value you’re assigning to your time not the the value someone else is willing to give you for your time.

sbarre 6y ago

I think trying to do actual money math on this is the wrong approach.. I totally get why they did in this letter, and I also think it's a laughable reach to talk about $126B in "value creation" in that way.. But at the same time, I do value my own time, in terms of being free to choose how I spend it. Ordering from Amazon (or online in general) has absolutely increased that freedom for me. Rather than having to find and drive to a store to get something (and I think 1 hour per trip is a good metric), I spend 3 minutes ordering it, and it arrives at my door the next day. Meanwhile I spend that hour doing other things that are more valuable to me. I may not acknowledge this each time, but in aggregate it certainly adds up. So it's not about making more money as much as it's about the value of reducing toil for yourself.

throwaway98797 6y ago

Time money is not one to one. You have time currency and you have financial currency. they are not divisible in the same way. they have some additive components though. If I spend 5 hours a week on house work like cleaning and then i use money to hire a person to do it for me i now have 5 hours of time currency. that time currency could be invested into enjoyment, learning, or for some direct financial currency creation. this how it works, your likely being overly litteral material making your life worse. as normal people will view you as obtuse vs the wise person you think you are.

jkingsbery 6y ago

The way I've started to look at it is: I don't expect I would be able to make $10 in that hour, but if I could skip doing chore X (cleaning, going to the store, whatever) and instead spend an hour going to the park with my wife and kids, or having lunch with them, or going for a run, that experience would be worth $10 (or probably more) to me. So it's not about trading time for money, it's about paying to trade an unpleasurable experience (e.g. standing in line at the grocery store) for a pleasurable one (drawing or having a hand stand competition with your kids).

kgin 6y ago

I’ve always wondered why people talk about their time like this. Unless I’m taking an hour off of work, that hour is not worth any specific amount of money.