5 ms·

Is the Italian market even worth 1.1b mid-term? I might have a skewed estimate since Amazon is "really small" in Sweden, but that is a LOT of money considering

Is the Italian market even worth 1.1b mid-term? I might have a skewed estimate since Amazon is "really small" in Sweden, but that is a LOT of money considering it's 1.1B lost profits and not turnover.

tut-urut-utut 5y ago
If the Italian market is too small to justify 1.3B costs of doing business Amazon has only three options there: 1. Stop doing what it's doing now and become fair and transparent, at least in Italy 2. Move out of Italian market 3. Keep paying even increasing fines and change nothing In all those cases consumers in Italy would profit, either from fair market or from more tax money. EDIT: formatting the list
- kmlx 5y ago
  > In all those cases consumers in Italy would profit, either from fair market or from more tax money. > 2. Move out of Italian market this would be a net negative all around. especially for consumers.
- maury91 5y ago
  I don't want to go down the rabbit hole that is politics, but Italian usually don't benefit from "more tax money', the government is not very good at handling money
  - ausudhz 5y ago
    This doesn't mean that companies shouldn't pay taxes. Also this is not a tax but a fine. There's a big difference
    - maury91 5y ago
      I didn't said anywhere that companies shouldn't pay taxes... If was for me companies should pay the same amount of taxes as civilians ( 60% ) if not more
      - ausudhz 5y ago
        So your useless comment about government not being able to handle the money is related to what sorry? If you're happy that they should pay taxes then I don't get the reason of your comment.
        maury91 5y ago
        To the parent comment stating "Italians will benefit from more tax money" ( the parent comment has been edited and the phrase rewritten to state that the country will benefit )
        ausudhz 5y ago
        People will indirectly benefit form these money too, of course. Since they'd go to pay healthcare and public education
  - pietrovismara 5y ago
    > Italian usually don't benefit from "more tax money' Like Amazon would have used that money for the greater good instead. Like the US is much better at this, throwing trillions of public money in weapons while they can't seem to afford free public healthcare.
    - tyoma 5y ago
      The US already spends twice as much on healthcare (around $1.5T) for existing public programs than it does on national defense (around $718B). Source: https://datalab.usaspending.gov/americas-finance-guide/spending/categories/ https://datalab.usaspending.gov/americas-finance-guide/spend...
      - pietrovismara 5y ago
        I'm not sure if I'm misreading the chart, but Health sits just above National Defence, with $796.8 B (12%) of expense, not $1.5T. Anyway it only makes it more absurd; that the US as a nation manages to be the first military world power using less money than they spend to have a broken healthcare system that ruins people's lives.
        xaqfox 5y ago
        It looks like Medicare spending was also included to arrive at $1.5T. A portion of "veteran's benefits" should probably also be included for the VA medical system.
    - dragonwriter 5y ago
      > Like the US is much better at this, throwing trillions of public money in weapons while they can't seem to afford free public healthcare. The US can afford free public healthcare. It could probably afford free public healthcare with its current public healthcare spending (per capita it spends far more than most developed countries providing that, and per GDP it spends a similar amount), but instead it's spends hyper inefficiently so as to maintain a private healthcare system that costs even more on top of the public system. Weapons are irrelevant to that, though the US spends too much (and too inefficiently) on those, too.
- toyg 5y ago
  There is a fourth option, that is them retreating from handling logistics for Italian sales only. TBH the most realistic option is something around 3: pay fines, change nothing (maybe rais prices a bit), make noise to get consumers on its side (Italians disproportionately like Amazon, because of its no-question-asked policy on returns is an absolute rarity there), wait for a friendly government to fix things in its favour.
Kipters 5y ago
Italian here: probably yes Since it became available here it became the de-facto standard for online purchases, most people don't even look at other marketplaces now and are often willing to pay more just because the order is coming from Amazon (even when it's a 3rd party seller)
toyg 5y ago
I don't think we know yet, as Amazon EU did not report per-country in 2020 according to a quick search; but the total revenue was 44bn, and the biggest EU markets are always disproportionately Germany, France, and Italy, so I would expect Italy-sourced revenues to be in the 5-10bn per year.
- stingraycharles 5y ago
  Revenue, yes, but for a webshop with typically low margins, the profit will be much lower.
  - hetspookjee 5y ago
    I believe Amazon has quite fat margins as a monopolist? The days of subsidising losses in favor of market share are long gone as the competitions has mostly been crushed.
    - stingraycharles 5y ago
      “Fat margins” is relative. For Apple, it may mean 50%; for a webshop, it may mean 10%. My point, however, is that we need to look at their profits, not revenue, to understand the impact of the fine.
      - toyg 5y ago
        In the worst (for Amazon) scenario, we're looking at 20% of localized revenues over a year. Amazon reported an average 5-7% profit margin in the last few years. Even in the worst case, they will be back in pure profit after just a few years... For illustration, 5% of 5bn is 250m, so if the fine is 1.1bn, it will take them 4 years to absorb it from localized profits only. Peanuts.
        lillecarl 5y ago
        Assuming they're able to play by the rules, they might just not be able to. We've seen Google fined over and over for things. I'm not sure Amazon would be different (I guess they have to to remain profitable or pull out).
znpy 5y ago
Yes.
- lillecarl 5y ago
  Insightful, thanks for the data and thoughtful discussion. I'm now convinced this is just a piss in the ocean for Amazon.
k8sToGo 5y ago
If I order something in Switzerland from Amazon it sometimes ships from Italy
- lillecarl 5y ago
  That's really interesting considering Amazons huge presence in Germany!?
  - mssdvd 5y ago
    I live in Italy and I often receive packages shipped from different European countries.

tut-urut-utut 5y ago

If the Italian market is too small to justify 1.3B costs of doing business Amazon has only three options there: 1. Stop doing what it's doing now and become fair and transparent, at least in Italy 2. Move out of Italian market 3. Keep paying even increasing fines and change nothing In all those cases consumers in Italy would profit, either from fair market or from more tax money. EDIT: formatting the list

kmlx 5y ago
> In all those cases consumers in Italy would profit, either from fair market or from more tax money. > 2. Move out of Italian market this would be a net negative all around. especially for consumers.
maury91 5y ago
I don't want to go down the rabbit hole that is politics, but Italian usually don't benefit from "more tax money', the government is not very good at handling money
- ausudhz 5y ago
  This doesn't mean that companies shouldn't pay taxes. Also this is not a tax but a fine. There's a big difference
  - maury91 5y ago
    I didn't said anywhere that companies shouldn't pay taxes... If was for me companies should pay the same amount of taxes as civilians ( 60% ) if not more
    - ausudhz 5y ago
      So your useless comment about government not being able to handle the money is related to what sorry? If you're happy that they should pay taxes then I don't get the reason of your comment.
      - maury91 5y ago
        To the parent comment stating "Italians will benefit from more tax money" ( the parent comment has been edited and the phrase rewritten to state that the country will benefit )
        ausudhz 5y ago
        People will indirectly benefit form these money too, of course. Since they'd go to pay healthcare and public education
- pietrovismara 5y ago
  > Italian usually don't benefit from "more tax money' Like Amazon would have used that money for the greater good instead. Like the US is much better at this, throwing trillions of public money in weapons while they can't seem to afford free public healthcare.
  - tyoma 5y ago
    The US already spends twice as much on healthcare (around $1.5T) for existing public programs than it does on national defense (around $718B). Source: https://datalab.usaspending.gov/americas-finance-guide/spending/categories/ https://datalab.usaspending.gov/americas-finance-guide/spend...
    - pietrovismara 5y ago
      I'm not sure if I'm misreading the chart, but Health sits just above National Defence, with $796.8 B (12%) of expense, not $1.5T. Anyway it only makes it more absurd; that the US as a nation manages to be the first military world power using less money than they spend to have a broken healthcare system that ruins people's lives.
      - xaqfox 5y ago
        It looks like Medicare spending was also included to arrive at $1.5T. A portion of "veteran's benefits" should probably also be included for the VA medical system.
  - dragonwriter 5y ago
    > Like the US is much better at this, throwing trillions of public money in weapons while they can't seem to afford free public healthcare. The US can afford free public healthcare. It could probably afford free public healthcare with its current public healthcare spending (per capita it spends far more than most developed countries providing that, and per GDP it spends a similar amount), but instead it's spends hyper inefficiently so as to maintain a private healthcare system that costs even more on top of the public system. Weapons are irrelevant to that, though the US spends too much (and too inefficiently) on those, too.
toyg 5y ago
There is a fourth option, that is them retreating from handling logistics for Italian sales only. TBH the most realistic option is something around 3: pay fines, change nothing (maybe rais prices a bit), make noise to get consumers on its side (Italians disproportionately like Amazon, because of its no-question-asked policy on returns is an absolute rarity there), wait for a friendly government to fix things in its favour.

Kipters 5y ago

Italian here: probably yes Since it became available here it became the de-facto standard for online purchases, most people don't even look at other marketplaces now and are often willing to pay more just because the order is coming from Amazon (even when it's a 3rd party seller)

toyg 5y ago

I don't think we know yet, as Amazon EU did not report per-country in 2020 according to a quick search; but the total revenue was 44bn, and the biggest EU markets are always disproportionately Germany, France, and Italy, so I would expect Italy-sourced revenues to be in the 5-10bn per year.

stingraycharles 5y ago
Revenue, yes, but for a webshop with typically low margins, the profit will be much lower.
- hetspookjee 5y ago
  I believe Amazon has quite fat margins as a monopolist? The days of subsidising losses in favor of market share are long gone as the competitions has mostly been crushed.
  - stingraycharles 5y ago
    “Fat margins” is relative. For Apple, it may mean 50%; for a webshop, it may mean 10%. My point, however, is that we need to look at their profits, not revenue, to understand the impact of the fine.
    - toyg 5y ago
      In the worst (for Amazon) scenario, we're looking at 20% of localized revenues over a year. Amazon reported an average 5-7% profit margin in the last few years. Even in the worst case, they will be back in pure profit after just a few years... For illustration, 5% of 5bn is 250m, so if the fine is 1.1bn, it will take them 4 years to absorb it from localized profits only. Peanuts.
      - lillecarl 5y ago
        Assuming they're able to play by the rules, they might just not be able to. We've seen Google fined over and over for things. I'm not sure Amazon would be different (I guess they have to to remain profitable or pull out).

znpy 5y ago

Yes.

lillecarl 5y ago
Insightful, thanks for the data and thoughtful discussion. I'm now convinced this is just a piss in the ocean for Amazon.

k8sToGo 5y ago

If I order something in Switzerland from Amazon it sometimes ships from Italy

lillecarl 5y ago
That's really interesting considering Amazons huge presence in Germany!?
- mssdvd 5y ago
  I live in Italy and I often receive packages shipped from different European countries.