Jeff Bezos has confirmed Amazon’s growth is slowing | Hacker News Reader

Jeff Bezos has confirmed Amazon’s growth is slowing

bloomberg.com

112 pointspseudolus105 comments

It seems that Amazon grew its annual sales by around $50 billion from 2017 to 2018 for a growth rate of "only" 19% (compared with 24% the year before). I'm not exactly concerned for them.

> In 2018, Amazon’s nearly $300 billion in GMV was about a 19 percent jump from the prior year. That was notably slower than the rates of increase of 24 percent and 27 percent, respectively, in 2017 and 2016.

Seriously, and they grew faster than the ecommerce category as a whole. Plus, double digit growth in the 100’s of billions of GMV is incredible in its own right.

I think the poor management of 3rd party sellers is at least part of it. I've had several bad experiences with slow shipping, "out of stock" after the sale, items very much not as described, counterfeits, etc. And crazy bad support from those sellers...English bad enough that I couldn't understand the response.

I now only buy a very specific subset of what I used to buy there.

The letter seems to suggest the opposite.

> We helped independent sellers compete against our first-party business by investing in and offering them the very best selling tools we could imagine and build. There are many such tools, including tools that help sellers manage inventory, process payments, track shipments, create reports, and sell across borders - and we're inventing more every year. But of great importance are Fulfillment by Amazon and the Prime membership program.

That doesn't say anything definitive either way, does it?

The letter says that 3rd party sellers have been doing just as good as Amazon.

It says Amazon gives them nice tools.

> Third-party sellers are kicking our first party butt. Badly.

It says a lot more than that.

I had small, but good experience with 3rd party sellers: next day shipping, free ship from coast to coast. It highly depends from seller, guess.

Amazon has raised the bar to the point that poor experiences that happen under the aegis of the Amazon brand are unacceptable.

I don’t understand how returns work anymore. I bought something thinking I could return it if it didn’t fit but it turned out the cost to return it was more than the item itself.

It doesn’t seem like they tell you that in advance.

that and some items are nonreturnable. Which it does not say on the product page.

It’s always weird to me when this kind of things is treated as bad news: they haven’t said they’re shrinking, literally that they aren’t growing as fast. I mean I don’t particularly like amazon but this kind of reporting irks me.

The market demands more. It isn't reporting it is expectations.

the market is stupid.

:D :D :D (I recognize that we're in the realms of irrationality of the market)

I would love to know what percent of stock market decisions are meta-decisions. In other words, most discussion of the market discuss it in idealized terms - as if it's largely made up of rational actors making long-term decisions - but it doesn't seem like that's the driving force for market swings. It seems more like it's a bunch of people trading speculatively on how a collection of rational actors should react to news.

The market is quite rational. Fast growth, price up. Slow growth, price down. It's just the market measuring different things from what people expect.

Because the stock price has factored in the growth. A slow down in growth means the stock price has to come down. It is bad news for the stock holders.

> Because the stock price has factored in the growth. A slow down in growth means the stock price has to come down.

Not necessarily. Maybe the market has factored in a slow-down in growth.

If the slow down was expected, it's factored in. If it's a surprise, not.

But then it would not be news, and TC wouldn’t be writing articles about it, and we wouldn’t be here discussing it.

This shouldn't be news. Amazon is a multi-billion dollar business that has been growing at phenomenal rates. Of course its growth is slowing.

Capitalism demands neverending growth, despite loads of limitations that make that physically impossible. Marx already recognized this, but 150 years later we're still pretending this is not the case.

Capitalism does not require growth. Many markets are stagnant or even shrink as technology evolves. Capitalism incurages growth, but does not require it.

Do you have some reference on this ? I'd love to read more about it.

He's probably talking about Europe and Japan. The Japanese stock market has been in decline for the last 30 years

Plenty of examples from film cameras to the often mentioned buggy whip manufacturing. More recently the decline of the newspaper industry has often been profitable to declining companies. Cut investment into the future and ride them into the ground.

Often it’s a question of sunk costs, the capital has already been allocated now it’s time to maximize the return. As a rule, dying industry’s can be profitable up to the point where they become irrelevant as long as people correctly predict the fall.

It doesn't require growth, but anything other than growth is seen as a weakness.

It reflects general unreasonableness of expectations and trying to have it both ways.

Giants like Amazon have a lot more inertia than a small business. That means they won't experience even 25% quarterly growth but wouldn't see a complete loss of assets and would probably take decades to die even with a complete idiot or active saboteur in charge.

As opposed to say a one man lawn service that can lose everything if the loaded truck was hit by a tractor trailer.

Don't investors realize that mathematically, a business cannot grow at the same rate forever?

The question to ask is whether it's due to internal or external factors such as market saturation.

Of course they do, they just value you differently. When companies announce slower growth it impacts their valuation because it impacts the discounted value of their future cash flows.

Exactly. You can think of the stock close price as having two components:current value + expected future value (of cash flows).

If a company grows more slowly, you’ll see the 2nd decrease, but the first will stay the same.

This piece wasn't written by investors. It was written by two opinion columnists at Bloomberg, the same publisher that refused to retract its widely refuted story about the Chinese government hacking Amazon & Apple.

That aside, sometimes people post stupid things on the internet.

Not with that attitude ;)

Shopping on Amazon has become like shopping on Canal Street in NYC (e.g. street lined with shops selling counterfeit goods). You never know what you’re going to get.

I honestly think this is overblown on HN. We must have placed more than 100 orders a year as a family for approaching a decade, and I don’t think we’ve ever had a counterfeit. Not sure if it’s different in the UK.

There's definitely a problem with fake or badly made goods on Amazon India. Scanning through some of the phone reviews a significant percentage of reviews will be talking about having received refurbished goods.

I bought my iphone from Flipkart (another online retailer in India) because there were multiple reports that Apple will sometimes not honor the warranty for iphones purchased from Amazon

It is definitely not overblown. Easy to do simple searches on Amazon and compare to a site that doesn’t rely on 3rd party sellers like Best Buy. If you searched “wireless headphones” the top results are all knock off airpods and other suspect cheap Chinese made electronics with thousands of likely fake reviews. It’s a joke

This is my biggest pet peeve with Amazon. I have given up on buying electronics multiple times because every search returns hundreds of no name Chinese knockoffs for every one reputable brand that I'm actually looking for. There is the option to select only certain brands, but if there are more than a few (which there always are because of the hundreds of knockoffs) it takes you to a page that only allows you to select one brand at a time. It's maddening and makes buying electronics on Amazon impossible. I don't know how they can not see how much friction they have in an industry where even the most trivial inconveniences cause exponential increase in bounce rates.

> If you searched “wireless headphones” the top results are all knock off airpods and other suspect cheap Chinese made electronics with thousands of likely fake reviews.

But isn't it a feature of all on-line shopping? If you type a generic query like this, you'll always get generic garbage as results. If you want to buy quality items, you search directly for those items - by their exact name or SKU.

E-commerce storefronts are not useful for product discovery.

> E-commerce storefronts are not useful for product discovery.

Probably a notable paradigm. E-commerce storefronts aren't so much for shopping as they are purchasing. There's definitely a bit of a difference.

(That said I've actually had some luck on Amazon being able to get some lotion I liked from Hawaii here in Toronto and finding a deodorant I actually like. The former is an example of "purchasing", the latter "shopping".)

Amazon commingles inventory, so counterfeits end up in the same bins as real products. So even by ordering a specific product or SKU, from a reputable seller, you can still have a decent chance of getting a counterfeit.

https://sellercentral.amazon.ca/gp/help/external/G200141480?...

https://www.wired.com/story/amazon-fake-products-project-zer...

https://www.climbing.com/gear/counterfeited-how-illegal-knoc...

Yeah I'm in the same boat. Easily over 100 orders and everything has been great, other than the occasional item damaged from shipping (which isn't exactly their fault). I am in Canada, though.

I thought so too, but I’ve had (non-tech, non-Bay Area) friends start ordering household items from Target instead of Amazon because of experiences like knockoff nail clippers and purple shampoo.

It could just be my circle of friends, but from my vantage point it feels like Amazon is starting to do serious damage to their brand.

Definitely not overblown. I personally know people who have ordered sports equipment from Amazon and found it be fake. Extremely dangerous because some of it was climbing equipment. Luckily they were wary of the Amazon goods, got refunded and went to the MEC instead.

"Firstly, Amazon commingles fake and genuine goods in their warehouses. Here’s what happens: You buy a real Arc’teryx jacket, paying the full price, from an approved Arc’teryx retailer selling on Amazon, but you get shipped a substandard copy. This occurs because, in the warehouse, the “same” items have identical internal reference codes independent of the retailer."

https://www.climbing.com/gear/counterfeited-how-illegal-knoc...

That's surprisingly evil. Someone selling niche maps with a market in the hundreds or low thousands was ripped off by counterfeiters on Amazon.

Arc'teryx is the manufacturer. Amazon is the retailer, they're adding fulfillment and collections. Why are these randoms even involved? If I wanted eBay I know where to find it.

You did receive fake goods. About 3-5% of all sales are counterfeit.

I wonder if Amazon’s days as the de facto online retailing site are numbered.

For nearly everything I buy on Amazon now, I wonder: “is this real? Are these reviews real? Will it break in 10 minutes?”

Obviously, Amazon is doing just fine, and we are a long way from my parents asking those same questions, and they have tons of businesses beside retail. So yes, they’ll be ok.

But I think they’ve left the door open for competition with their approach to third party sellers.

This is my concern as well. They're becoming victims of their own success with knockoffs and scammers increasingly gaming the system. Everything from knockoffs piggybacking on real listings, to entire lines of products being dominated by no-name Chinese companies throwing armies of shills at the reviews.

Amazon figuring out how to deal with the problem is critical for their future.

They've had a long time to figure that out. It's been an issue for a while. They've just neglected to do anything about it.

It doesn't take a genius to look at all the reviews that some products have and realize that they're fake

This is a common sentiment, but seems wrong to me. It doesn't take a genius to recognise a spam or phishing email either, and yet no company has created a perfect email filter.

It's not neglect, it's a very hard problem, as is any problem where you are trying to make an inference with limited information controlled by an adversary. Amazon could spend billions on incredibly sophisticated fake-review-detection algorithms, but they still couldn't stop sellers finding real amazon customers and paying them to buy and review their products.

Neither the sentiment nor the difficulty of the problem matters. Big A gets a cut of a sale whether or not the reviews or products are genuine so they won’t do more than the bare minimum to deal with it, until their tide starts to change.

Who in your mind could replace them? I am sure they have issues, but it seems like they have such a massive lead in terms of logistics it's hard to imagine anyone delivering a comparable customer experience anytime soon.

I don’t know, but that’s how people felt with Yahoo, AOL, IBM, etc at different times.

A few ideas:

Walmart. Their grocery delivery service is already baked into our weekly workflow. Plus they benefit from having X000 stores around the USA. They really are getting their act together.

Wayfair and friends. Wayfair is demonstrating that certain verticals really benefit from having a dedicated site and customer service matters.

They've clearly spent the last 10 years spending like crazy, in a frantic (and successful) effort to diversify their offerings.

Yes, they'll first and foremost be "internet walmart", but only a fool would think that the insane growth was unstoppable - Jeff Bezos is many things but he's not an idiot.

isn't there an upside? feels like a return to bricks-and-mortar competition is good, not bad. well.. depends if you own amazon shares or not. Im a non-direct shareholder, my pension fund might have a consequence but I'd expect it to be both sides of this anyway.

totally feels like an upside to me.

> a return to bricks-and-mortar competition

That's not what is happening at all. Amazon dominates the ecommerce market, is still growing like crazy, is even still growing faster than the overall ecommerce market, and the ecommerce market is growing faster than the overall retail market.

No return to bricks-and-mortar competition remotely in sight here. It's a pity the spin in the article seems to have been accepted so uncritically in many posts here.

Well, thats a shame then. I might add I believed it because of the false assumption "what I do is what everyone does" and I stopped using AMZN and buy in bricks-and-mortar deliberately for a reason.

I do however, in some cases continue to buy online but from shops direct, not via their Amazon channel.

I assumed the background was this is a "thing" but your story makes more sense: the rate of growth of underlying trends makes a single-line measure "drop" but it isn't what they say it is, its a decline in relative scale.

Amazon is doing great... but its stock price now seems much riskier.

This is because many self-professed "growth investors" head for the exits, swiftly and silently, the moment they get a whiff that growth is slowing down.

The growth numbers to keep an eye on aren't ecomm, it's AWS and Prime subscriptions.

I would say keep an eye on the whole top line, not just those two contributors to revenue. And also, watch out for any warning signs in the industry suggesting that cloud services are starting to become utility-like (low-margin, capital-intensive) businesses. That would not be good for AWS.

I'm curious if acquisitions impact the rate of growth, Amazon has been on a buying spree these past couple of years.

they finally stagnated. the site is still as unusable as when I first used it.

Search and categories are complete garbage.

The listings that breakdown price (e.g. $/unit or $/Gb or $/ounce) are a inconsistent mess in the same search result, sometimes showing different units for the same product from two sellers!

and I still have no idea if a listing will be OK or from a seller worse thab ebay.

I can live with the unpleasant UX as far as that goes, but where it implodes for me is having to sift through endless fake reviews, counterfeits, and shit products. “Amazon’s Choice” is frequently garbage, and everything else is a coin flip at best. I have to use Fakespot just to sift through the more obvious dreck.

Of course it’s AWS printing their money, not retail.

It’s really quite surreal. Unless it’s a highly commoditized item, I don’t bother with Amazon anymore.

What do you use instead? I'd love to be able to ditch amazon for most purchases.

Literally any thing else. For photography equipment, B&H or my local camera shop. For non-Apple computer stuff, local MicroCenter, NewEgg, etc. For non-techy stuff, local stores. Even the dollar stores have laundry soap, dish soap, etc.

I've actually gotten used to taking a weekend afternoon for errands or maybe in the evenings on the way home. It's a good way to just unwind from the computer for a while. There are times to avoid certain stores (Central Market on the weekend). Shopping online pretty much means being in front of the computer all of the time.

FWIW, it's still a decent place to buy books. I go to my local bookstore first, because reasons, but Amazon comes through whenever they can't source it through their distributor.

But yeah, when I die, I want Amazon electronics sellers to be my pallbearers so they can let me down one last time.

Fakespot is pure trash. That thing doesn't work at all. According to Fakespot everything in Amazon is fake. Even small legitimate third-party sellers get bad ratings from Fakespot. But that's not even the worst part. I have found dubious listings where Fakespot didn't detect anything and gave them a semi-decent rating when it's obvious that the reviews were manipulated just by looking at them.

If you want to understand a product reliability is pretty simple. Just browse the 1 and 2 star reviews. You can find a lot of valuable information about the products in those reviews.

If you still want to use something to evaluate the reviews use Reviewmeta. It's much better and transparent than Fakespot.

> According to Fakespot everything in Amazon is fake.

http://www.chioka.in/class-imbalance-problem/

And probably half or more that’s on the Internet is fake too especially if it revolves around making money.

I’ve told my older parent not to buy a product or use a svc based on Internet reviews.. go with personal recommendations only!

>According to Fakespot everything in Amazon is fake.

I really don't know how good or bad fakespot is, but I get a roughly uniform distribution - it's not at all rare for me to see an A or B, and I'm pretty sure I don't see more F's than those.

"Search and categories are complete garbage."

I'm consulting in the pet space, if you search for 'Mousr' which is the name of a very cool pet toy brand that they carry - you get PC mouses (ie 'Mouse'). Not the brand 'Mousr'.

So basically their 'spell correct' 'Mousr->Mouse' utterly and completely overrides the notion that the users wanted to in fact input 'Mousr' to get that product.

Instead, in order to find the product, you have to type the company name 'Petronics'.

FYI - if you've worked in NLP, you might recognize this problem: the edit distance from Mousr->Mouse is short, and the 'e' and 'r' keys are beside one another, and of course the word 'Mouse' is very common while the word 'Mousr' is very uncommon, leading the error correction algorithm to 'over correct'.

This is a problem in NLP where very uncommon things that are lexically adjacent to common things get suppressed.

Since 'Mousr' however, is 100% in the Amazon catalougue, you'd think they'd include it!

But no.

Consider the resulting 'lowest common denominator' approach: statistically speaking, it might be slightly more economically efficient to actually assume the error and show PC mice, besides, 'everyone' needs a PC mouse anyhow!

But the interesting, long-tail stuff gets suppressed.

This is to me the statistical epitome of not just Amazon, but of our new, globalized culture - the big brands have such power they just bulldoze through everything else - and the 'short run' economics are in their favour! They can point to 'the efficiency of the search' etc. to validate to everyone else in the equation (ie city councillors approving permits, banks giving loans, buyers - heck, even consumers) to validate their case on competitive, culturally secular grounds.

It takes quite some magic, a loyal following, a magic meme of attention, a super faithful investor, or deep rooted cultural behaviours (like Italians who could care less about the new 'Starbucks' because they already have good coffee).

Most big CEO founders have made some kind of 'big claims' or almost arbitrary statements about 'how it ought to be' and they stuck to their guns on those, I wish Bezos et. al. would think just one tiny bit about the 2cnd order effects of their businesses.

It is completely reasonable to optimize for the vast majority typing 'mouse' and potentially misspelling it. Also "mousr petronics" shows up as the 1st choice in the autocomplete when typing "mousr".

This is probably one of those products that can and should have its own website and sell from there or link directly to Amazon instead.

I don't think it's reasonable to show one thing when the user typed another.

There are dozens of product results, there's no reason why one of the proper results wouldn't show up as well.

"Results for Mousr ..." "Results for Mouse ..."

etc

The 'r' is next to the 'e' in a qwerty keyboard. Quite honestly it's more likely for someone to make a typo and enter "mousr" than your case which is someone searching for a brand name that happens to be "mousr". It seems like the right optimization IMHO. I presume the p90 case for this would be people looking for an actual "mouse."

Additionally, there’s a “search for mousr” link directly under the “Showing results for mouse” banner. It’s not as if they make it hard to do the exact match search.

Why not show both?

There is a link on the search result page for "Search instead for X" if you really want to search for "Mousr". There's also nothing wrong with correcting what appears to be a typo'd word for a user (Google and every other search engine I can think of does this).

Seems more like poor naming on Mousr's part.

Totally disagree, and it seems nobody understood my comment.

I pointed out in that I'm fully aware where the probabilities are, and the fact the 'keys are close to one another' - that's my whole point, it's a statistical suppression.

The 'short view' is to just show 'mice' - but there are problems with that:

1) 'over correction' is far worse error that 'insufficient correction'

2) There are tons of 'Mousr' products out there, i.e. products that overlap closely to more common things.

The likelihood of some random error being a product is low - and since 'Mousr' is an actual product, it makes sense to show it.

In this case, the rational product choice would be to show 'Mousr' first, and to not assume over-correction.

To take a more extreme example i.e. going with the 'highest probability case' ... it might make sense by that logic to show only the most commonly purchases products purchase, almost whatever is typed.

Hits on trademarks, proper nouns, product names, etc should be boosted.

It is 150 USD toy for cats. i.e. 99.9% people typing mousr are searching for mouse(PC).

Using the search/filter options on the site is useless now.

Most recently I was looking for a countertop hot plate/burner to replace one that finally broke (filament burned out after 15 years). Searching within the Appliances / Cooktops category, it is filled with random apparel like t-shirts and dresses for < $1. Try filtering by price to any interval and it's random kids' toys, arts and crafts supplies, tools, and sex toys. You're lucky to see one or two actual cooktops per page. Filter by 'Fuel Type: Electric' and there are only 5 actual results plus an impact socket even though there are hundreds of actual electric cooktops if you filter by brand name or surface material. It's insane.

Most of the sellers and brands have names that look like someone mashed their keyboard. At this point the only way to use the site is to already know the exact brand and model you want and search from google.

What? That sounds really strange. Do you have a browser extension messing with the page?

You can just use the search from the homepage. Typing "hotplate" gave autocomplete for "hotplate for cooking" which is hundreds of products: https://www.amazon.com/s?k=hotplate+for+cooking

Or if you want to browse, the category homepage has all kinds of filters: https://www.amazon.com/s?k=&ref=nb_sb_noss&rh=n%3A3741261

Search and category browsing have different purposes. Search is not a substitute for a decent taxonomy. Unfortunately, MS (start menu) and Amazon seem not to realize that.

Search is better than category browsing... you can spearfish instead of cast a net. If you had typed “hot plate” into search, you would have avoided your entire frustration... you already knew what you wanted.

Amazons web site is a mess for sure, but finding a specific product is not one of those problems. The search is quite good...

If you don't know what something is called, then you need categories to find it.

>> the site is still as unusable as when I first used it.

Maybe it's true, but is there someone better ? with a better search ? more valuable reviews ? As wide selection ?

I think the market has already realized that Amazon retail is beatable. There’s been a resurgence in stocks that were once falling like a knife because everyone thought Amazon would destroy them...among them Best Buy, Etsy, Shopify, etc.

Hopefully such a signal doesn't turn the market bearish. There's enough economists saying that we're overdue for a correction and I hope for them to be wrong.

Why do you hope for them to be wrong?

Edit: Fix typo.

Are you getting against the market? Cause of not then you probably want it to keep going up.

It healthier that the market reflects reality. Boom and bust is a stress inducing net negative pattern for society.

People suffer in recessions.

On the contrary, I think a recession - and hence a discount in asset prices - is good for people.

Good for rich people (those with money to spend on assets). Absolutely not good for most people.

Rich (<1%) already own assets, but the rest aren't invested enough. Asset prices right now are unaffordable. A big correction will give the rest a much needed discount. Agreed that there is a big segment in population who can't afford assets either way. But usually recessions impact the middle class the most.

Losing your home is not good for people.

I guess they have to get into the people-making business now.

I see Amazon now like Aliexpress with a worse UI. Side note - I got an Amazon.ca Visa 4 years ago. Then two years later I got a letter saying in a month or so they (Chase and Amazon) were ending the card service. So I was a student stuck with paying off the card without access to the credit I had factored into my budget while I was in school. I wasn't impressed. Haven't shopped on Amazon since.

I'm noticing that there's a lack of hot products that I "must have" and would jump onto Amazon to buy. Lately my consumption is largely driven by stuff I have wearing out -- this wasn't the case a few years ago.

It's time for massive M&As.

Now begins the monopoly, rent seeking, price hikes.

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