What Is Amazon?
zackkanter.com
zackkanter.com
Conversely raison d'etre for Amazon is convenience, you can get anything, order it at any time, and have it within a couple days - it may not be the lowest price, or the best value you can buy - but it will end up being your first choice because of the low friction interactions Amazon offers.
As soon as interactions with Amazon start to exceed the combined convenience/value metric offered by other outlets, business will move to those other outlets - particularly more so for those with disposable income (particularly notable with the issue of counterfeit of fraudulent items).
As a note, while I don't fully disagree Walmart is one of the 'most successful social welfare institutions ever implemented' - I would never frame it in that context, because Walmart pushes the costs for the value it creates externally - in essence Walmart is subsidized indirectly by the state and its various welfare organs, it passes much of that subsidy back onto its customers - but like any indirect subsidy, its highly a highly inefficient way of going about this, and creates all sorts of undesired effects at the same time - for example, it undermines the whole point of many of the social welfare programs it benefits from thru indirect subsidy.
1. don't pay for gas and car wear&tear going to the store. (Amazon aggregates all this by driving one truck replacing 30-40 car trips.)
2. spend 5 minutes of my time buying rather than a couple hours going to the mall
3. I have access to the used market on Amazon, meaning I pay a LOT less for many items like books
And if(a big if) i come out of Amazon with a feeling that i got better value for money, isn't this pretty similar to winning on price ?
Fake reviews, etc . But many customers are naive.
>It is the most successful social welfare system ever implemented, saving billions and billions of dollars for everyday Americans without costing taxpayers a dime.
I stopped reading half way through. I fundamentally disagree with that statement. A good chunk of Walmart’s workforce were scheduled to work part time hours to avoid receiving any benefits, and of course they were subsidized by the tax payer.
I would know - in the mid 90s, I was one of them! Tencare provided my health coverage, my 6 year old received free lunch, I had reduced rent, and I had assistance for groceries.
That said...yeah, that's a bit too pro-capitalistic monstrosities for my tastes.
Your claim is that this is wrong because Walmart intentionally structures their employees hours so that they do not need to pay for certain benefits.
I don't think the two claims are mutually exclusive. While I might not go as far as to say that Walmart is the most successful social welfare system every, I have not problem saying that Walmart has meaningfully improved the lives of medium and low income Americans over the last 40 years.
> they specifically structured their compensation plan for their employees to extract a maximum value from the social welfare system
While the outcome of Walmart's actions might have been this, I think it much closer to Walmart's goal to say that they worked to minimize the total cost of labor. The two are very different ideas of what Walmart's obligations are.
>Even if Walmart employed more people than the smaller stores they replaced, if even 1 employee of Walmart would have otherwise had a job that provided healthcare, then "not a dime" is overstating things.
This is a really tricky standard. By this standard. Imagine if Walmart employed 50 people, 40 at minimum wage, 10 with full benefits, and drove out of two smaller stores that provided 25 full benefit jobs. There is a net loss of 15 full benefit jobs, you say this is really bad. But, 25 more people have jobs. This very well could net decrease government welfare to the area.
The details get really tricky and the truth could be one way or another. I personally have no data to inform an opinion one way or another.
> The author implied "without costing taxpayers a dime" to mean "without directly receiving tax dollars" which is true. Taking "without costing taxpayers a dime" to mean "ensuring their employee's received no government benefits" is quite a stretch.
I disagree with this characterization of "without costing taxpayers a dime;" I'm willing to forgive opportunity costs, but e.g. moving people from private healthcare to subsidized health care is IMO a direct cost.
Even if I didn't disagree, Walmart has certainly been directly receiving tax dollars in one form or another, as any large corporation will do (see e.g. Amazon's recent attempt to get cities to bid for their presence).
> they specifically structured their compensation plan for their employees to extract a maximum value from the social welfare system
> While the outcome of Walmart's actions might have been this, I think it much closer to Walmart's goal to say that they worked to minimize the total cost of labor. The two are very different ideas of what Walmart's obligations are.
For low-compensation jobs these are roughly the same thing because, once you hit a certain level of compensation, cutting wages must result in either your employees ending up starving to death or beneficiaries of the social welfare system.
>> Even if Walmart employed more people than the smaller stores they replaced, if even 1 employee of Walmart would have otherwise had a job that provided healthcare, then "not a dime" is overstating things.
> This is a really tricky standard. By this standard. Imagine if Walmart employed 50 people, 40 at minimum wage, 10 with full benefits, and drove out of two smaller stores that provided 25 full benefit jobs. There is a net loss of 15 full benefit jobs, you say this is really bad. But, 25 more people have jobs. This very well could net decrease government welfare to the area.
> The details get really tricky and the truth could be one way or another. I personally have no data to inform an opinion one way or another.
I agree, though my intuition is that more people will be beneficiaries of government services post-walmart. This does not necessarily imply walmart is a net-cost though as if walmart sufficiently drives down the cost of living to everyone, then the total cost of the services could potentially go down.
I'm thinking it's a net cost though just because walmart has little effect on two of the biggest costs for low earners: healthcare and housing.
What does that have to do with Walmart? Was anyone else offering you a job? Walmart didn't make you poor, they offered you and other people like you a lifeline.
> A good chunk of Walmart’s workforce were scheduled to work part time hours to avoid receiving any benefits
Not great but not terrible - how many competing offers do Walmart employees have exactly? And again, how is this Walmart's fault?
I lived in a town in the 90's that was host to a new Walmart that everyone thought would decimate the town. 25 years later and the town is larger and more robust than it ever was when I lived there. The only businesses it seemingly hurt, was the struggling and very lame department store across the street.
While I don't agree with them using "part time workers" to avoid paying benefits, no one is forcing these people to work at Walmart.
Furthermore, the author of the article is claiming that Walmart has helped Americans by saving them billions on the goods they purchase. The user I"m replying to is claiming they've cost Americans billions in taxes because of how they structure their employee compensation. Both are right but I'd tilt the balance of "good" towards Walmart. In a world without Walmart, these people would have LESS employment opportunities and we'd all pay more for the goods we purchase from traditional regional/local stores.
Walmart is a creator, it's easy to criticize creators while we all sit on the sidelines doing nothing.
Except for, you know, starvation and homelessness. We need to get past the idea that people on the low-end of income choose their jobs. You take whatever happens to be open at the time.
If we took the billions in taxes that Walmart causes and put it toward those higher prices at other grocery stores and welfare would we have a net-benefit or loss?
It seems this is never accounted for in peoples' simplistic supply and demand view of employment opportunities. Let's be charitable and assume there are better employment options out there than Walmart for a given subset of their employees. Let's say they have unused salesmanship skills that could potentially earn them $80k a year at something like a car dealership that requires no additional education.
Now we're talking about commission-based income, or perhaps an extra two weeks without a paycheck just to switch jobs. How many low income people can afford to miss a paycheck? It's not just the lack of alternate opportunities... it's also the lock-in of having no savings after basic necessities are paid for.
Additionally, if Walmart was to require full-time hours from employees it would remove a large pool of workers who would otherwise benefit from having a work opportunity. Older people, students, and others that can't work full-time would not be able to get a job. And all those excluded people would now be jobless and once again relying on government assistance.
If the local economy is so bad that Walmart is your only job option then that area is going to be a tax dollar sink either way, taking more back from government assistance than it generates in tax revenue, as many small towns do. At least if Walmart hires more part time people it gives a larger number of the locals some control over their lives instead of leaving them fully dependent on assistance.
Another argument could be made that if Walmart did not exist, then another employer or group of employers would exist that would hire the same number of workers and give them more hours/benefits. However, such an argument would require significant analysis to demonstrate. From what I have seen, other, smaller businesses are as bad or worse than Walmart when it comes to those things.
I am having a really hard time thinking about the situation and agreeing with your implied premise that Walmart should employee people if and only if they pay them enough to remove them from all government benefits (or even healthcare). Does Walmart purposefully structure employment so they don't have to provide healthcare? Undeniably! It saves them tons of money! I have a hard time thinking of this as an immoral act that you imply it is.
Why is it wrong for them to do it?
You just need a very narrow definition of "everyday Americans". That, and not giving a damn about anyone else.
I was also very disgusted by this and could not continue reading.
I would know - in the mid 90s, I was one of them! Tencare provided my health coverage, my 6 year old received free lunch, I had reduced rent, and I had assistance for groceries. "
There must be a typo - apparently Walmart did not stop you from receiving benefits.
This is exactly what The Theory of Constraints by Goldratt states. https://en.m.wikipedia.org/wiki/The_Goal_%28novel%29
I don't perceive Amazon as an 'unbounded' Walmart like the author does, but as an aggregator as thoroughly analyzed by Ben Thompson of Stratechery fame. They bootstrapped a destination with undifferentiated products, a broad selection, and convenience, and later bolted on a marketplace to further capitalize on the traffic. But the dynamics of customer-facing marketplaces are very different from those of internal ones like those of Walmart and McDonald's. McDonald's puts out specs and has suppliers compete for restaurants' buys, and Walmart and Costco have immense purchasing leverage with suppliers, this process results in optimizing the desired quality-to-cost ratio the retailer wants to target.
Amazon, on the other hand, is a free-for-all, where selection is overwhelming, products with obscure branding appear to rip each other off to the point where no obvious choice rises above, human curation is absent, reviews frequently appear gamed, prices change arbitrarily, products are gated behind Prime and are subject to obscure shipping math, and despite being long perceived as having low prices, pricing on products is now being used as a signal. Amazon is hardly anything more than a digital flea market, where Amazon is the landlord and some of the vendor booths are staffed by them directly. A wildly successful and profitable one, and one that draws marketshare away from traditional retail, but it diverges so far from the formula of retail that comparisons with them are of questionable value.
I'll type a dramatic sentence or two. I don't mean to provoke anyone. I just wish to learn what I'm missing in the big picture.
Hasn't Amazon effectively optimized a machine to make sure humankind consumes all the natural resources it has and beyond? That's how this piece reads to me. All bottlenecks again and again removed on the road to self annihilation?
I guess I'm asking what limits or inhibiting factors still do exist that might make a difference?
The system will collapse well before the limit of all available natural resources is reached. We're well on our way already.
Amazon isn't the machine it's just part of the machine. Think about Sears being perhaps the first significant iteration of the machine and Amazon removing one of the "bottlenecks" and being the current phase of evolution.
It's very clear to me that there's no going back to the way things were "before" without a significant drop in human population. The problem will solve itself far better than we're willing/able to.
Ignoring environmental costs of pushing low quality plastic products that don't last.
It also feels like it's killed any mid-tier options. Everything seems to be "cheap stuff made overseas", "same cheap stuff with a brand name wholly or mostly made overseas", and "expensive, but nice stuff".
E.g. go try to find a set of combination wrenches made in the USA for even triple the price of what you can get at Harbor flFreight.
harbor freight < craftsmen/kodiak < mac/matco < snapon
Each tier gets a little pricer and quality is different at each level.
However I do understand the point you're making and it is valid.
The price difference between Craftsman and matco isn't an option for most consumers.
Wrenches also aren't the best example because they're less likely to fail as well.
People have been complaining about "low quality plastic products that don't last" since I was a boy in the 1960s.
> It is the most successful social welfare system ever implemented, saving billions and billions of dollars for everyday Americans without costing taxpayers a dime.
And people try to say the American Dream is dead. This article shows we're still very much dreaming.