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> Amazon is too big to do this manually. Amazon is allowed to be smaller if it can't figure out how to do it profitably.

AnthonyMouse 3y ago
Amazon is a company that makes a tiny amount of money a billion times a day. There is no sustainable way to increase costs without increasing prices. Regulatory overhead in competitive markets like retail gets paid for by customers, not corporations. It makes poor people have to pay more to buy stuff.
- autoexec 3y ago
  > There is no sustainable way to increase costs without increasing prices. This is beyond ridiculous. Any company pulling in 3.2 billion in profit can easily increase costs without increasing prices just by accepting a little less profit. Hell, they could increase costs and lower prices and still be both highly profitable and sustainable by any sane definition of those words.
  - AnthonyMouse 3y ago
    Their net margin over the last year was 0.82%. That's the extent of how much costs could increase before they lose their entire profit, and companies are unsustainable well before that because they become worth more to sell off for their real estate and equipment than they are as an operating company. You might also be interested in the proportion of the operating income they do make that comes from AWS rather than retail: https://www.investopedia.com/how-amazon-makes-money-4587523 https://www.investopedia.com/how-amazon-makes-money-4587523
    - ukuina 3y ago
      Doesn't Amazon claim to sink much of their revenue back into R&D?
      - gorbachev 3y ago
        Comment was talking about Amazon, the online store, margins. Not Amazon, the huve conglomerate.
    - rvba 3y ago
      If the business is so difficult and unprofitable, they can always close it.
      - AnthonyMouse 3y ago
        Amazon generally has some of the most competitive prices and competing with them is a major factor in preventing other retailers from charging more. The evil to be prevented is poor people having to pay more for stuff, so how would that help?
    - okeuro49 3y ago
      > Their net margin over the last year was 0.82%. Amazon choose to make investments which skew the profit margin. They definitely have money to improve things like reviews, however they choose to invest it in other areas. https://www.vox.com/recode/2019/8/21/20826405/amazons-profits-revenue-free-cash-flow-explained-charts https://www.vox.com/recode/2019/8/21/20826405/amazons-profit...
      - AnthonyMouse 3y ago
        But the original argument was that they're so profitable. Now you're trying to find an explanation for their lack of profit. Free cash flow isn't profit, and the way you measure whether something is worth investing in is against the opportunity cost. If they expect to invest a dollar in X and get back $1.25 and you say they have a dollar so they could invest it in Y that gets them back $1.03, the only reason for them to do that is out of charity, and the act of doing it would cost them $0.22 on the dollar. And you're still not solving the problem, you're just moving it somewhere else. You say they could spend money on this instead of investing in something else, like Amazon Basics. Now Amazon Basics doesn't make batteries, or USB cables, or what have you. There is less competition in that market, so people have to pay more for that stuff. It can't come out of what they're paying to shareholders because they never pay anything to shareholders.
- heavyset_go 3y ago
  That sounds like an Amazon problem, they are not entitled to profit from deceiving their customers. > It makes poor people have to pay more to buy stuff. Poor people aren't using Amazon because Amazon hasn't had the best prices online in years. You can get the same stuff for much cheaper on AliExpress or Walmart's retail and 3rd party marketplaces, or one of the dozens of other marketplaces online.
  - throwaway14356 3y ago
    I sometimes run into it by accident then look at the ui and the prices in disbelief. Its always a joke by comparison. Bling has this rather weird feature that allows you to search for similar (product) imaged, I don't know how often it works but iirc it displays prices under the similar (read the same) products. I think eventually that might become a desirable standard. A platform, interested in the long game, wouldn't want to sell the same goods for 4 to 50 times the regular price. Just like brick stores use to guarantee the lowest price.
  - AnthonyMouse 3y ago
    You're describing places with even lower trust in the sellers than Amazon.
- ben_w 3y ago
  > It makes poor people have to pay more to buy stuff. Sam Vimes' boots: Poor people relying on a fake review are harmed by a greater proportion than are rich people who can afford to wait to send it back and get a refund. Also, lemon market: When the buyers can't tell if they're being ripped off, there is a death spiral of quality on the market as the price that consumers will bear has to assume the risk of lemons, but only lemons can be profitability sold at low prices.
  - AnthonyMouse 3y ago
    > Sam Vimes' boots This is a silly economic theory. Rich people buy high quality goods that cost several times more money, often thousands of dollars as opposed to tens, for signaling reasons. Those products often are more durable, but not in proportion to how much more they cost. If a $1000 pair of boots lasts five times longer than a $50 pair of boots, you're still paying $750 more in the long run, and paying it as an up front cost, and taking a higher risk because anything that damages the high cost product is a bigger loss. That isn't to say that you can never find a product which is such garbage that it costs more even though it costs less, but there is no reason to expect that to be the common case, and a big reason to expect the contrary: Sellers will try to charge more to people who can afford it even past the point that higher prices can cost-effectively improve quality, and rich people will pay those prices because they're less price-sensitive or more willing to pay for signaling. > Poor people relying on a fake review are harmed by a greater proportion than are rich people who can afford to wait to send it back and get a refund. You're making a proportionality argument here, but that's irrelevant. The question isn't what rich people do. It's if the amount it would cost to prevent fake reviews is more than the cost to ordinary people of them existing. And the effect you're referring to only applies to a narrow range of products. If you order some paper towels and end up using napkins for a couple of days while they send some different ones, it's not a big deal. Conversely, if they send you an incompatible replacement battery for your device, you're stuck using the one that only lasts 15 minutes until you can get another one even if you make $100,000/year. > When the buyers can't tell if they're being ripped off, there is a death spiral of quality on the market as the price that consumers will bear has to assume the risk of lemons, but only lemons can be profitability sold at low prices. The assumption here is that Amazon reviews are the only means for people to evaluate quality. There are retailers that don't even have review systems and still don't become lemon markets because people can rely on third party reviews or brand reputation. And those systems are typically better because they're not tied to a retailer with a dominant market position, which improves competition in retail and routes around the perverse incentive of the retailer to host dishonest reviews.

AnthonyMouse 3y ago

Amazon is a company that makes a tiny amount of money a billion times a day. There is no sustainable way to increase costs without increasing prices. Regulatory overhead in competitive markets like retail gets paid for by customers, not corporations. It makes poor people have to pay more to buy stuff.

autoexec 3y ago
> There is no sustainable way to increase costs without increasing prices. This is beyond ridiculous. Any company pulling in 3.2 billion in profit can easily increase costs without increasing prices just by accepting a little less profit. Hell, they could increase costs and lower prices and still be both highly profitable and sustainable by any sane definition of those words.
- AnthonyMouse 3y ago
  Their net margin over the last year was 0.82%. That's the extent of how much costs could increase before they lose their entire profit, and companies are unsustainable well before that because they become worth more to sell off for their real estate and equipment than they are as an operating company. You might also be interested in the proportion of the operating income they do make that comes from AWS rather than retail: https://www.investopedia.com/how-amazon-makes-money-4587523 https://www.investopedia.com/how-amazon-makes-money-4587523
  - ukuina 3y ago
    Doesn't Amazon claim to sink much of their revenue back into R&D?
    - gorbachev 3y ago
      Comment was talking about Amazon, the online store, margins. Not Amazon, the huve conglomerate.
  - rvba 3y ago
    If the business is so difficult and unprofitable, they can always close it.
    - AnthonyMouse 3y ago
      Amazon generally has some of the most competitive prices and competing with them is a major factor in preventing other retailers from charging more. The evil to be prevented is poor people having to pay more for stuff, so how would that help?
  - okeuro49 3y ago
    > Their net margin over the last year was 0.82%. Amazon choose to make investments which skew the profit margin. They definitely have money to improve things like reviews, however they choose to invest it in other areas. https://www.vox.com/recode/2019/8/21/20826405/amazons-profits-revenue-free-cash-flow-explained-charts https://www.vox.com/recode/2019/8/21/20826405/amazons-profit...
    - AnthonyMouse 3y ago
      But the original argument was that they're so profitable. Now you're trying to find an explanation for their lack of profit. Free cash flow isn't profit, and the way you measure whether something is worth investing in is against the opportunity cost. If they expect to invest a dollar in X and get back $1.25 and you say they have a dollar so they could invest it in Y that gets them back $1.03, the only reason for them to do that is out of charity, and the act of doing it would cost them $0.22 on the dollar. And you're still not solving the problem, you're just moving it somewhere else. You say they could spend money on this instead of investing in something else, like Amazon Basics. Now Amazon Basics doesn't make batteries, or USB cables, or what have you. There is less competition in that market, so people have to pay more for that stuff. It can't come out of what they're paying to shareholders because they never pay anything to shareholders.
heavyset_go 3y ago
That sounds like an Amazon problem, they are not entitled to profit from deceiving their customers. > It makes poor people have to pay more to buy stuff. Poor people aren't using Amazon because Amazon hasn't had the best prices online in years. You can get the same stuff for much cheaper on AliExpress or Walmart's retail and 3rd party marketplaces, or one of the dozens of other marketplaces online.
- throwaway14356 3y ago
  I sometimes run into it by accident then look at the ui and the prices in disbelief. Its always a joke by comparison. Bling has this rather weird feature that allows you to search for similar (product) imaged, I don't know how often it works but iirc it displays prices under the similar (read the same) products. I think eventually that might become a desirable standard. A platform, interested in the long game, wouldn't want to sell the same goods for 4 to 50 times the regular price. Just like brick stores use to guarantee the lowest price.
- AnthonyMouse 3y ago
  You're describing places with even lower trust in the sellers than Amazon.
ben_w 3y ago
> It makes poor people have to pay more to buy stuff. Sam Vimes' boots: Poor people relying on a fake review are harmed by a greater proportion than are rich people who can afford to wait to send it back and get a refund. Also, lemon market: When the buyers can't tell if they're being ripped off, there is a death spiral of quality on the market as the price that consumers will bear has to assume the risk of lemons, but only lemons can be profitability sold at low prices.
- AnthonyMouse 3y ago
  > Sam Vimes' boots This is a silly economic theory. Rich people buy high quality goods that cost several times more money, often thousands of dollars as opposed to tens, for signaling reasons. Those products often are more durable, but not in proportion to how much more they cost. If a $1000 pair of boots lasts five times longer than a $50 pair of boots, you're still paying $750 more in the long run, and paying it as an up front cost, and taking a higher risk because anything that damages the high cost product is a bigger loss. That isn't to say that you can never find a product which is such garbage that it costs more even though it costs less, but there is no reason to expect that to be the common case, and a big reason to expect the contrary: Sellers will try to charge more to people who can afford it even past the point that higher prices can cost-effectively improve quality, and rich people will pay those prices because they're less price-sensitive or more willing to pay for signaling. > Poor people relying on a fake review are harmed by a greater proportion than are rich people who can afford to wait to send it back and get a refund. You're making a proportionality argument here, but that's irrelevant. The question isn't what rich people do. It's if the amount it would cost to prevent fake reviews is more than the cost to ordinary people of them existing. And the effect you're referring to only applies to a narrow range of products. If you order some paper towels and end up using napkins for a couple of days while they send some different ones, it's not a big deal. Conversely, if they send you an incompatible replacement battery for your device, you're stuck using the one that only lasts 15 minutes until you can get another one even if you make $100,000/year. > When the buyers can't tell if they're being ripped off, there is a death spiral of quality on the market as the price that consumers will bear has to assume the risk of lemons, but only lemons can be profitability sold at low prices. The assumption here is that Amazon reviews are the only means for people to evaluate quality. There are retailers that don't even have review systems and still don't become lemon markets because people can rely on third party reviews or brand reputation. And those systems are typically better because they're not tied to a retailer with a dominant market position, which improves competition in retail and routes around the perverse incentive of the retailer to host dishonest reviews.