12 ms·

Amazon's War On The House Of Otto, Germany's $18 Billion Family

136 points by lelf 13y ago

aridiculous 13y ago
I wonder how much of Otto's benevolence is being played up in the article (discouraging weekend working, tolerance of gigantic strategic failures). If he truly does what he's saying, it sounds like a very pleasant and productive place to work.
- deleted 13y ago
  [deleted]
- PythonicAlpha 13y ago
  I do not agree with Otto's benevolence. I think it is just show. When you see what he is doing with his Hermes business, he is not benevolent at all but throws many people even deeper into despair. There was also a documentary about his life-ruining business but the big "benefactor" just found covering slogans to disguise what it is really about: To rip people off. When his other businesses work the same, than it is a big benevolence show. Of course the German government bought the show (why not, our politicians are of the same kind!).
  - einrealist 13y ago
    You cannot compare Hermes with the rest of the group. Hermes' working conditions are a result of the logistic market. And that is quite different from the conditions you find in retail. I worked for Otto in Hamburg and i can say that the benelovence is not just show.
    - PythonicAlpha 13y ago
      Could be. I have no comparison possibility here. But I don't understand, why Otto himself is defending the very bad conditions at Hermes.
    - PythonicAlpha 13y ago
      I also strongly disagree with the (white-washing) statement, that the working conditions at Hermes are purely a result of the logistic market! There are other logistic companies that still have far better working conditions. So it is possible. The whole construction of Hermes is made this way, that the conditions of the workers are bad and Hermes itself can wash their hands of it. Even the small companies in between this "chain of irresponsibility" are complaining of bad conditions and many go bankrupt for Otto's billions.
      - einrealist 13y ago
        I did not say that Otto is innocent in this case. Most of the bad press is a result of Hermes' overdependence of contractors, who often have contractors themselves. Of course, each link in the chain of contractors is obligated to make profit from the already low shipping price. DHL has this problem too (see the small "On behalf of" at the logo). Even though, DHL has another history (Deutsche Post) and therefore some advantages. The logistic companies are working on this. As a result you find more and more pickup shops. It is even discussed to make door-to-door delivery a premium service, so less delivery wo/men are needed and prices for direct shipping can be raised. The standard service will then be to pickup shops or automated packet stations only. Of course, this can be prevented if customers would accept higher shippings costs...
        PythonicAlpha 13y ago
        My critics of this system goes just in this direction. The construction is on purpose in a way, that responsibility is disconnected from Hermes and the pressure is made so that the contractors themselves are forced to create bad working conditions. There are also contractors that admitted that they had to cheat the tax system to stay afloat. Many have gone bankrupt and the people involved are often left without social security. That's all inside the "System Hermes".
      - infinii 13y ago
        Hermes working conditions might not be the result of the market dynamics itself but you cannot put the blame on the Otto Group either. Hermes was a wholly separate company that was purchased by the Otto Group. It's not like OG bought the company and came in and put in place all these conditions.
TrainedMonkey 13y ago
Moral of the story is - people like their goods to be cheap, quickly delivered, and convenient to order. Amazon encompasses all of that and it seems that Otto's companies do not. I applaud his effort to put people ahead of profits, but unless he changes his business model amazon will continue to eclipse his empire.
- toomuchtodo 13y ago
  Counterpoint: Perhaps government should enact regulation to lift the floor to prevent a race to the bottom. Amazon warehouses shouldn't become the sweatshops of tomorrow. Governments exist to protect their citizens, not their businesses.
  - enraged_camel 13y ago
    >>Governments exist to protect their citizens, not their businesses. I totally agree. The problem is that many people defend businesses because, they say, those businesses provide people with jobs. Following this line of thinking, they are willing to completely ignore the shitty practices of said businesses, because in their eyes, jobs > *.
  - anentropic 13y ago
    "Amazon warehouses shouldn't become the sweatshops of tomorrow" They already are... http://www.bbc.co.uk/news/business-25034598 http://www.bbc.co.uk/news/business-25034598 http://www.bbc.co.uk/iplayer/episode/b03k5kzp/Panorama_Amazon_The_Truth_Behind_the_Click/ http://www.bbc.co.uk/iplayer/episode/b03k5kzp/Panorama_Amazo... http://www.theguardian.com/technology/2013/dec/01/week-amazon-insider-feature-treatment-employees-work http://www.theguardian.com/technology/2013/dec/01/week-amazo...
    - toomuchtodo 13y ago
      I'm aware. I have more faith in the German government protecting its citizens compared to the US government.
mfrommil 13y ago
There's such a strong negative connotation to "burning out" in the article. If an employee puts in a solid 2-3 years and delivers great results for a company, "burns out", and then moves on to a new role or company, is that really that bad? The company (in this case, Amazon) got great results from its employee, the employee had a good experience (and can leverage it to get a promotion, internally or externally). I guess it depends on what employees are looking for in their career - to be the best they can be, or live a laid back lifestyle. edit agree with the comments... this is a too simplified black/white comment. completely agree that finding the right balance between work/non-work on an individual basis is important.
- cwal37 13y ago
  I think it's more a question of what someone wants out of life. If your job is your life, than that makes more sense. If you value things outside of whatever you do for money, then working to burnout is only going to harm those other aspects of your life and ultimately you. I don't think it's unreasonable to put some grey space between being the best you can be and being laid back. Something like working reasonable hours, being thoroughly successful in your career, and still engaging in outside activities. I think that burning out=being the best you can be is pretty shortsighted.
  - Someone 13y ago
    Also, for the kind of employee this is about, "your job is your life" is unlikely to be true, at least not in the meaning that you imply. "Your jobs are your life", in some cases is appropriate, not because they enjoy their job, but because there's so little else.
- normloman 13y ago
  "I guess it depends on what employees are looking for in their career - to be the best they can be, or live a laid back lifestyle." You're not being the best when you burn out. You're killing yourself and your productivity with it. We have decades of research concluding that productivity falls when you're overworked. "The company (in this case, Amazon) got great results from its employee, the employee had a good experience" The employee does not have a good experience when they're working themselves to exhaustion. "If an employee puts in a solid 2-3 years and delivers great results for a company, "burns out", and then moves on to a new role or company, is that really that bad?" Yes, because companies shouldn't have to work their employees to the bone to extract value from them. A long time ago, we decided that it's cruel, and created labor laws. Where have you been?
bayesianhorse 13y ago
"War" sounds so much less boring than "competing". I can't help but hear a sentiment like "We deserve perpetual success, dammit!"
mxfh 13y ago
If you see how Hermes Group, an Otto owned logistics company, (sub-)subcontractors have to handle their daily work load at (often below) minimum wage pay, often with their private cars, it's hard to believe he's that serious about running a morally superior business for any other reason than getting good PR. DHL is not golden either but Hermes is just bad in every aspect. As a private customer in Germany I would try to avoid getting stuff shipped to me through Hermes by all means possible, since you never know who delivers your stuff (high fluctuation of sub-sub contractors) the delivery experience ranges from unacceptable to slightly above sub-par. http://www.spiegel.de/kultur/tv/ard-film-ueber-lohndumping-die-paketboten-und-der-milliardaer-a-778200.html http://www.spiegel.de/kultur/tv/ard-film-ueber-lohndumping-d... [German] http://translate.google.com/translate?hl=en&sl=de&tl=en&u=http%3A%2F%2Fwww.spiegel.de%2Fkultur%2Ftv%2Fard-film-ueber-lohndumping-die-paketboten-und-der-milliardaer-a-778200.html http://translate.google.com/translate?hl=en&sl=de&tl=en&u=ht... [Google translate]
- PythonicAlpha 13y ago
  I agree. I think, today's Otto Group is not morally superior to Amazon's business at all, at least judged by their Hermes business. At least, I can not see any viable differences. What totally pisses me off is, the aura of "charity" that Otto is surrounding around himself. He also got a high German medal (the so called "Große Verdienstkreuz mit Stern") for his charities. With examples like these, German high medals become the same value as the "Nobel Peace Prize" that is given to some of the worst persons that have lived. I now understand, why some people strictly refuse to be dishonored by such prizes.
  - jmngomes 13y ago
    > What totally pisses me off is, the aura of "charity" that Otto is surrounding around himself. Agreed; we need an equivalent to "greenwashing" to describe this behaviour...
    - mxfh 13y ago
      It's right there with the "trickle-down" myth. The whole idea that that CSR[1] somehow frees companies from paying their share in social taxes and exempts them from regulations[2]; that the government controlled social sector and welfare could be privatized (at least in Germany there's something left) and social taxes and regulations could be replaced by voluntary CSR measures. It might work for a few PR-exploitable areas, but not everything yields a ROI high enough to please the investors. If a company want's to do something good they should show it first through their products, trough the resources they are made with and how well they treat their employees.[3] [1] http://en.wikipedia.org/wiki/Corporate_social_responsibility#Criticisms_and_concerns http://en.wikipedia.org/wiki/Corporate_social_responsibility... [2] http://www.nytimes.com/2014/02/21/business/media/comcasts-web-of-lobbying-and-philanthropy.html http://www.nytimes.com/2014/02/21/business/media/comcasts-we... [3] https://news.ycombinator.com/item?id=7176028 https://news.ycombinator.com/item?id=7176028
trg2 13y ago
The Otto Group’s sales are up 17% in Germany since the recession, while Amazon’s have doubled since 2010. Huh? This comparison confused me. I wonder why the author didn't use the same years? What was the baseline?
- iwasakabukiman 13y ago
  I read it as 2010 being the baseline for both, with "since the recession" meaning 2010. But it's fairly ambiguous. It could mean any number of things. It could also be that the numbers for the Otto Group aren't public for whatever reason.
  - mikeash 13y ago
    Wasn't 2010 basically the "mission accomplished" point for the recession where the recovery was officially declared to have begun? Maybe they're just assuming everybody knows that.
  - blurpin 13y ago
    I edited the story. We had to write it this way bc Otto reports a fiscal year that ends in February. Amazon's fiscal year is the calendar year. So it wasn't exact comparison and we had to fudge.
- SilasX 13y ago
  It's an unfortunate but common practice I've noticed: they don't want repetition, or anything close to it, so they jump between synonyms -- or, sadly, what the journalist thinks is a synonym. But since a lot of synonyms aren't perfect (or just aren't synonyms), you can't tell what they mean, and this is a prime example of it. I see this same phenomenon in software/API documentation too, where you can't tell what is a necessary term to use, and what's an arbitrary label. Most recent case was a vim doc for how to record macros, and gave an example starting with "qq", which will store the macro into the letter q. But you always type q to start the macro, so using an example where the macro also is called 'q' just confuses things. They should have used an example like "qa", where it's clear that q is for all macros, and the second char is where it gets store. (Yes, you can un-ring that bell with further clarification, but it's still a bad example.)
ed 13y ago
(This was nearly impossible to read on mobile) Michael Otto’s family has been as omnipresent in German postwar retail as Wal-Mart, Sears and Target have in the U.S. So what does this 70-year-old patriarch of this $18 billion clan most want to talk about? A factory in Bangladesh. With gusto he describes how he and Nobel Peace Prize- winner Muhammad Yunus hatched a plan to build a humane clothing factory, where all profits would go back into the community for schools and hospitals. At best, the Otto Group would recoup its initial investment. Immediately they faced red tape. Electricity would take five years. Officials wanted bribes. Otto refused to base a social business on a corrupt footing and walked away. “It’s unbelievable,” says Otto, pounding on his wooden desk in his corner office in Hamburg, Germany. “You would think the government must be happy somebody is building such a company and leaving the money in the country.” ... http://notehub.org/2014/3/12/httpwwwforbescomsitesadamtanner20140305a http://notehub.org/2014/3/12/httpwwwforbescomsitesadamtanner...
- rdl 13y ago
  Corruption is more cause than effect of poverty.
  - samstave 13y ago
    Poverty is a tool, leveraged by the corrupt.
    - samplonius 13y ago
      How? I'm corrupt, and their are scavengers rummaging through the alley that runs behind the office. How do I leverage this poverty to make some sweet green? I've watched them dig through the trash, and they don't have anything, and they are just collecting bottles and cans for recycling. How do I profit from this?
      - Crito 13y ago
        Assuming that they are poor though otherwise functional (capable of work), then in order to make money from them you take advantage of them, knowing that poor people desperate for money to support their families will put up with more shit. Have a "recycling" company and need somebody to man one of the electronics burning pits? Get one of those poor guys in they alley to do it. What are his other options? You may need to bribe others to get away with this, but if those people are also relatively poor, the bribes should be affordable.
trevoragilbert 13y ago
Fascinating story of the growth of a giant. I wish they hadn't glossed over the early growth of the company and how it grew during the Cold War and the divide in Europe. Anyone know any more about that part?
- eru 13y ago
  I know that Quelle, one of their competitors, got products manufactured in east Germany.
atmosx 13y ago
Did the guy (Otto) pay for front-cover or did Forbes randomly picked up a successful billionaire who made up himself in the period of the German economic miracle? I mean, there's nothing attractive to this story: Amazon is bad on workers and Otto is good, won't get you far. Especially in the Anglo-saxon world.
this_user 13y ago
What isn't mentioned in that article is that two other high profile German mail order companies ("Quelle" and "Neckermann") declared bankruptcy over the last couple of years and were mostly liquidated, because their business models had become unsustainable. Otto so far is the last of those former giants standing and probably profiting from the death of its direct competition. An acquaintance of mine actually works for Otto and he told me several things. First of all, in the heads of many people at that company the catalogue is still the main driver of revenue. Online is more or less an afterthought. This is also reflected in their average customer who is older and less educated than the average Amazon customer. Secondly, their IT is ancient by Silicon Valley standards. Orders, for instance, are allegedly only processed once at night by batch job, because their infrastructure doesn't support anything else. All in all, my money is on Amazon and Zalando (basically an Amazon clone supported by the infamous Samwer brothers) who will soon run circles around Otto if they don't catch up fast which isn't an easy thing to do with a slow behemoth of a company like that.
- eru 13y ago
  My money is firmly on Amazon. But that might be because I have seen how the sausage is made at Zalando, and don't have that insight on Amazon.
- coffeeaddicted 13y ago
  I ordered recently a chair from Otto and was mostly surprised that I couldn't use a credit card. Instead they send an invoice a few days after delivery.
rajacombinator 13y ago
Awww look at the poor landed nobility. Boohoo.
niio 13y ago

136 points by lelf 13y ago

I wonder how much of Otto's benevolence is being played up in the article (discouraging weekend working, tolerance of gigantic strategic failures). If he truly does what he's saying, it sounds like a very pleasant and productive place to work.

deleted 13y ago
[deleted]
PythonicAlpha 13y ago
I do not agree with Otto's benevolence. I think it is just show. When you see what he is doing with his Hermes business, he is not benevolent at all but throws many people even deeper into despair. There was also a documentary about his life-ruining business but the big "benefactor" just found covering slogans to disguise what it is really about: To rip people off. When his other businesses work the same, than it is a big benevolence show. Of course the German government bought the show (why not, our politicians are of the same kind!).
- einrealist 13y ago
  You cannot compare Hermes with the rest of the group. Hermes' working conditions are a result of the logistic market. And that is quite different from the conditions you find in retail. I worked for Otto in Hamburg and i can say that the benelovence is not just show.
  - PythonicAlpha 13y ago
    Could be. I have no comparison possibility here. But I don't understand, why Otto himself is defending the very bad conditions at Hermes.
  - PythonicAlpha 13y ago
    I also strongly disagree with the (white-washing) statement, that the working conditions at Hermes are purely a result of the logistic market! There are other logistic companies that still have far better working conditions. So it is possible. The whole construction of Hermes is made this way, that the conditions of the workers are bad and Hermes itself can wash their hands of it. Even the small companies in between this "chain of irresponsibility" are complaining of bad conditions and many go bankrupt for Otto's billions.
    - einrealist 13y ago
      I did not say that Otto is innocent in this case. Most of the bad press is a result of Hermes' overdependence of contractors, who often have contractors themselves. Of course, each link in the chain of contractors is obligated to make profit from the already low shipping price. DHL has this problem too (see the small "On behalf of" at the logo). Even though, DHL has another history (Deutsche Post) and therefore some advantages. The logistic companies are working on this. As a result you find more and more pickup shops. It is even discussed to make door-to-door delivery a premium service, so less delivery wo/men are needed and prices for direct shipping can be raised. The standard service will then be to pickup shops or automated packet stations only. Of course, this can be prevented if customers would accept higher shippings costs...
      - PythonicAlpha 13y ago
        My critics of this system goes just in this direction. The construction is on purpose in a way, that responsibility is disconnected from Hermes and the pressure is made so that the contractors themselves are forced to create bad working conditions. There are also contractors that admitted that they had to cheat the tax system to stay afloat. Many have gone bankrupt and the people involved are often left without social security. That's all inside the "System Hermes".
    - infinii 13y ago
      Hermes working conditions might not be the result of the market dynamics itself but you cannot put the blame on the Otto Group either. Hermes was a wholly separate company that was purchased by the Otto Group. It's not like OG bought the company and came in and put in place all these conditions.

TrainedMonkey 13y ago

Moral of the story is - people like their goods to be cheap, quickly delivered, and convenient to order. Amazon encompasses all of that and it seems that Otto's companies do not. I applaud his effort to put people ahead of profits, but unless he changes his business model amazon will continue to eclipse his empire.

toomuchtodo 13y ago
Counterpoint: Perhaps government should enact regulation to lift the floor to prevent a race to the bottom. Amazon warehouses shouldn't become the sweatshops of tomorrow. Governments exist to protect their citizens, not their businesses.
- enraged_camel 13y ago
  >>Governments exist to protect their citizens, not their businesses. I totally agree. The problem is that many people defend businesses because, they say, those businesses provide people with jobs. Following this line of thinking, they are willing to completely ignore the shitty practices of said businesses, because in their eyes, jobs > *.
- anentropic 13y ago
  "Amazon warehouses shouldn't become the sweatshops of tomorrow" They already are... http://www.bbc.co.uk/news/business-25034598 http://www.bbc.co.uk/news/business-25034598 http://www.bbc.co.uk/iplayer/episode/b03k5kzp/Panorama_Amazon_The_Truth_Behind_the_Click/ http://www.bbc.co.uk/iplayer/episode/b03k5kzp/Panorama_Amazo... http://www.theguardian.com/technology/2013/dec/01/week-amazon-insider-feature-treatment-employees-work http://www.theguardian.com/technology/2013/dec/01/week-amazo...
  - toomuchtodo 13y ago
    I'm aware. I have more faith in the German government protecting its citizens compared to the US government.

mfrommil 13y ago

There's such a strong negative connotation to "burning out" in the article. If an employee puts in a solid 2-3 years and delivers great results for a company, "burns out", and then moves on to a new role or company, is that really that bad? The company (in this case, Amazon) got great results from its employee, the employee had a good experience (and can leverage it to get a promotion, internally or externally). I guess it depends on what employees are looking for in their career - to be the best they can be, or live a laid back lifestyle. edit agree with the comments... this is a too simplified black/white comment. completely agree that finding the right balance between work/non-work on an individual basis is important.

cwal37 13y ago
I think it's more a question of what someone wants out of life. If your job is your life, than that makes more sense. If you value things outside of whatever you do for money, then working to burnout is only going to harm those other aspects of your life and ultimately you. I don't think it's unreasonable to put some grey space between being the best you can be and being laid back. Something like working reasonable hours, being thoroughly successful in your career, and still engaging in outside activities. I think that burning out=being the best you can be is pretty shortsighted.
- Someone 13y ago
  Also, for the kind of employee this is about, "your job is your life" is unlikely to be true, at least not in the meaning that you imply. "Your jobs are your life", in some cases is appropriate, not because they enjoy their job, but because there's so little else.
normloman 13y ago
"I guess it depends on what employees are looking for in their career - to be the best they can be, or live a laid back lifestyle." You're not being the best when you burn out. You're killing yourself and your productivity with it. We have decades of research concluding that productivity falls when you're overworked. "The company (in this case, Amazon) got great results from its employee, the employee had a good experience" The employee does not have a good experience when they're working themselves to exhaustion. "If an employee puts in a solid 2-3 years and delivers great results for a company, "burns out", and then moves on to a new role or company, is that really that bad?" Yes, because companies shouldn't have to work their employees to the bone to extract value from them. A long time ago, we decided that it's cruel, and created labor laws. Where have you been?

bayesianhorse 13y ago

"War" sounds so much less boring than "competing". I can't help but hear a sentiment like "We deserve perpetual success, dammit!"

mxfh 13y ago

If you see how Hermes Group, an Otto owned logistics company, (sub-)subcontractors have to handle their daily work load at (often below) minimum wage pay, often with their private cars, it's hard to believe he's that serious about running a morally superior business for any other reason than getting good PR. DHL is not golden either but Hermes is just bad in every aspect. As a private customer in Germany I would try to avoid getting stuff shipped to me through Hermes by all means possible, since you never know who delivers your stuff (high fluctuation of sub-sub contractors) the delivery experience ranges from unacceptable to slightly above sub-par. http://www.spiegel.de/kultur/tv/ard-film-ueber-lohndumping-die-paketboten-und-der-milliardaer-a-778200.html http://www.spiegel.de/kultur/tv/ard-film-ueber-lohndumping-d... [German] http://translate.google.com/translate?hl=en&sl=de&tl=en&u=http%3A%2F%2Fwww.spiegel.de%2Fkultur%2Ftv%2Fard-film-ueber-lohndumping-die-paketboten-und-der-milliardaer-a-778200.html http://translate.google.com/translate?hl=en&sl=de&tl=en&u=ht... [Google translate]

PythonicAlpha 13y ago
I agree. I think, today's Otto Group is not morally superior to Amazon's business at all, at least judged by their Hermes business. At least, I can not see any viable differences. What totally pisses me off is, the aura of "charity" that Otto is surrounding around himself. He also got a high German medal (the so called "Große Verdienstkreuz mit Stern") for his charities. With examples like these, German high medals become the same value as the "Nobel Peace Prize" that is given to some of the worst persons that have lived. I now understand, why some people strictly refuse to be dishonored by such prizes.
- jmngomes 13y ago
  > What totally pisses me off is, the aura of "charity" that Otto is surrounding around himself. Agreed; we need an equivalent to "greenwashing" to describe this behaviour...
  - mxfh 13y ago
    It's right there with the "trickle-down" myth. The whole idea that that CSR[1] somehow frees companies from paying their share in social taxes and exempts them from regulations[2]; that the government controlled social sector and welfare could be privatized (at least in Germany there's something left) and social taxes and regulations could be replaced by voluntary CSR measures. It might work for a few PR-exploitable areas, but not everything yields a ROI high enough to please the investors. If a company want's to do something good they should show it first through their products, trough the resources they are made with and how well they treat their employees.[3] [1] http://en.wikipedia.org/wiki/Corporate_social_responsibility#Criticisms_and_concerns http://en.wikipedia.org/wiki/Corporate_social_responsibility... [2] http://www.nytimes.com/2014/02/21/business/media/comcasts-web-of-lobbying-and-philanthropy.html http://www.nytimes.com/2014/02/21/business/media/comcasts-we... [3] https://news.ycombinator.com/item?id=7176028 https://news.ycombinator.com/item?id=7176028

trg2 13y ago

The Otto Group’s sales are up 17% in Germany since the recession, while Amazon’s have doubled since 2010. Huh? This comparison confused me. I wonder why the author didn't use the same years? What was the baseline?

iwasakabukiman 13y ago
I read it as 2010 being the baseline for both, with "since the recession" meaning 2010. But it's fairly ambiguous. It could mean any number of things. It could also be that the numbers for the Otto Group aren't public for whatever reason.
- mikeash 13y ago
  Wasn't 2010 basically the "mission accomplished" point for the recession where the recovery was officially declared to have begun? Maybe they're just assuming everybody knows that.
- blurpin 13y ago
  I edited the story. We had to write it this way bc Otto reports a fiscal year that ends in February. Amazon's fiscal year is the calendar year. So it wasn't exact comparison and we had to fudge.
SilasX 13y ago
It's an unfortunate but common practice I've noticed: they don't want repetition, or anything close to it, so they jump between synonyms -- or, sadly, what the journalist thinks is a synonym. But since a lot of synonyms aren't perfect (or just aren't synonyms), you can't tell what they mean, and this is a prime example of it. I see this same phenomenon in software/API documentation too, where you can't tell what is a necessary term to use, and what's an arbitrary label. Most recent case was a vim doc for how to record macros, and gave an example starting with "qq", which will store the macro into the letter q. But you always type q to start the macro, so using an example where the macro also is called 'q' just confuses things. They should have used an example like "qa", where it's clear that q is for all macros, and the second char is where it gets store. (Yes, you can un-ring that bell with further clarification, but it's still a bad example.)

ed 13y ago

(This was nearly impossible to read on mobile) Michael Otto’s family has been as omnipresent in German postwar retail as Wal-Mart, Sears and Target have in the U.S. So what does this 70-year-old patriarch of this $18 billion clan most want to talk about? A factory in Bangladesh. With gusto he describes how he and Nobel Peace Prize- winner Muhammad Yunus hatched a plan to build a humane clothing factory, where all profits would go back into the community for schools and hospitals. At best, the Otto Group would recoup its initial investment. Immediately they faced red tape. Electricity would take five years. Officials wanted bribes. Otto refused to base a social business on a corrupt footing and walked away. “It’s unbelievable,” says Otto, pounding on his wooden desk in his corner office in Hamburg, Germany. “You would think the government must be happy somebody is building such a company and leaving the money in the country.” ... http://notehub.org/2014/3/12/httpwwwforbescomsitesadamtanner20140305a http://notehub.org/2014/3/12/httpwwwforbescomsitesadamtanner...

rdl 13y ago
Corruption is more cause than effect of poverty.
- samstave 13y ago
  Poverty is a tool, leveraged by the corrupt.
  - samplonius 13y ago
    How? I'm corrupt, and their are scavengers rummaging through the alley that runs behind the office. How do I leverage this poverty to make some sweet green? I've watched them dig through the trash, and they don't have anything, and they are just collecting bottles and cans for recycling. How do I profit from this?
    - Crito 13y ago
      Assuming that they are poor though otherwise functional (capable of work), then in order to make money from them you take advantage of them, knowing that poor people desperate for money to support their families will put up with more shit. Have a "recycling" company and need somebody to man one of the electronics burning pits? Get one of those poor guys in they alley to do it. What are his other options? You may need to bribe others to get away with this, but if those people are also relatively poor, the bribes should be affordable.

trevoragilbert 13y ago

Fascinating story of the growth of a giant. I wish they hadn't glossed over the early growth of the company and how it grew during the Cold War and the divide in Europe. Anyone know any more about that part?

eru 13y ago
I know that Quelle, one of their competitors, got products manufactured in east Germany.

atmosx 13y ago

Did the guy (Otto) pay for front-cover or did Forbes randomly picked up a successful billionaire who made up himself in the period of the German economic miracle? I mean, there's nothing attractive to this story: Amazon is bad on workers and Otto is good, won't get you far. Especially in the Anglo-saxon world.

this_user 13y ago

What isn't mentioned in that article is that two other high profile German mail order companies ("Quelle" and "Neckermann") declared bankruptcy over the last couple of years and were mostly liquidated, because their business models had become unsustainable. Otto so far is the last of those former giants standing and probably profiting from the death of its direct competition. An acquaintance of mine actually works for Otto and he told me several things. First of all, in the heads of many people at that company the catalogue is still the main driver of revenue. Online is more or less an afterthought. This is also reflected in their average customer who is older and less educated than the average Amazon customer. Secondly, their IT is ancient by Silicon Valley standards. Orders, for instance, are allegedly only processed once at night by batch job, because their infrastructure doesn't support anything else. All in all, my money is on Amazon and Zalando (basically an Amazon clone supported by the infamous Samwer brothers) who will soon run circles around Otto if they don't catch up fast which isn't an easy thing to do with a slow behemoth of a company like that.

eru 13y ago
My money is firmly on Amazon. But that might be because I have seen how the sausage is made at Zalando, and don't have that insight on Amazon.
coffeeaddicted 13y ago
I ordered recently a chair from Otto and was mostly surprised that I couldn't use a credit card. Instead they send an invoice a few days after delivery.

rajacombinator 13y ago

Awww look at the poor landed nobility. Boohoo.

niio 13y ago