Hacker News Reader

Comment by dominotw | Hacker News Reader

What about Zappos? Isn't that a counterexample ?

Companies choose their profit margin. Amazon, at one point, had to decide to become like Nordstrom or like Walmart. They chose the Walmart route.. which is a focus on lowering prices (and therefore low margin).

Zappos may be in retail, but they are not low margin. Their gross margins (revenue - cogs) are roughly 35%. Compare that to Nordstrom - 37.5%. And coincidentally, Nordstrom also has a reputation for good working conditions.

Costco has a gross margin of ~13%, and is reputed to have very good working conditions.

The paid membership component makes that tough to compare, but I've also heard they take good care of employees

Would you rather work at Costco, or at Amazon?

I would rather work as a retail employee at Costco than as a warehouse employee at Amazon. But I'd probably rather work at the job I'm most qualified for at Amazon than at Costco, because it would be better for my resume and presumably have more interesting technical work.

Trader Joe's seems to as well, and that's with razor thin grocery store margins. Employees are always so happy and helpful there. It's like night and day compared to places like... Safeway.

Gross margins don't really mean a lot where wage bills are a high percentage of costs. Think Starbucks or MacDonalds or many other fast-food places.

Amazon's biggest regret is probably connvincing people they have the lowest prices. It has led to this Walmart comparison that they likely hate.

Best value: virtually always. Lowest price: not as often as you think.

Isn't Zappos fully owned by Amazon now?

It is, but it's still in Vegas and it looks like the original CEO has pretty good control over the company. My friend had interview there back in college and they seems kinda over-obsessed with "culture fit". I mean when most companies talking about culture fit that basically equals to "we wanna hire nice people", but Zappos seems has really restricting rules on that part.

Anecdotally, I don't agree with the hypothesis that culture fit means they want to hire nice people. I've worked in a few places where people needed to be, for example, tough, tricky, bitchy, to survive.

I think part of the reason I got my job is because I euphemistically referred to "successfully implementing technical solutions in a complex political environment", and everybody knew exactly what I was talking about.

I don't think that would (necessarily) change it's business strategy or it's margins.

Reply on news.ycombinator.com