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> 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 i

> 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.

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.