The Anti-Amazon Alliance
stratechery.com
stratechery.com
Well now here we are. Fake reviews, counterfeit products, most things (IME) are actually FBA or just outright 3rd party sellers (not automatically bad, but more opportunities for problems), their prices aren't competitive anymore...
So, they've still got a lot of selection, although it's really more like shopping at a bazaar, since really their website is almost nothing more than Ebay in some sense, and I will say their customer service has almost w/o exception been stellar. But that's not enough anymore.
We'll see. Nothing lasts forever. Either Amazon will get the wakeup call and tighten its ship, or it will become the next Ebay/Myspace/Craigslist (I'm deliberately just throwing the kitchen sink here).
One last footnote -- just within the last week or so, 2 Amazon tech products that I've praised -- the Ring Doorbell and the Eero router(s) -- had firmware problems. Ring bricked itself (firmware update gone wrong) and had to be RMA'ed (they did it w/o any problem, and this was almost 2 years after purchase). The Eeros went into a cycle of resets and couldn't update their firmware.
So, yeah, eBay, Ali-express ... might as well go there.
...strange world.
I would argue that it's even worse. At least, IME, the ratings at E-bay for both sellers and products mean something. With Amazon, neither mean a damned thing anymore. It's just a crap shoot, unless you know exactly what you're already looking for.
Amazon used to be nice, because you could actually do product research. The worst thing, again in my opinion, they've done is ruin the ability to actually compare products due to sketchy reviews.
I know what I'm looking for, but most of the products are impossible to evaluate, because there is just not enough info/data. Low res bad stock photos, terse description, no full technical specs, etc.
And many Amazon sellers don't sell anywhere else, they don't even have a real website, so ... good luck deciding based on that.
And since Amazon become so big, they set the bar for quality. So now the same shit is everywhere. (Plus there's the high-end overpriced but also not perfect segment too.)
But even someone who actively dislikes Amazon such as yourself would still rather get the lowest price and access to the largest selection, even if it means begrudgingly putting up with a worse experience.
Blows my mind that this is an actual issue. It just doesn't make sense that _this_ would be an issue, yet it totally is. Oftentimes you don't even know for sure what's included with a product and you have to sift thru the comments (reviews & Q&As) to figure out if what you think is included is indeed included as there is no clear indication in the listing. Very low quality in this regard. eBay, OTOH, is very specific because sellers vying for your attention want to make sure you know exactly what you're buying.
If eBay offered something which tightly integrated 2-Day Delivery, they could become a legit competitor on the non-media services side.
What's the search engine equivalent of "showrooming"?
Turns out, all Best Buy had to do was not turn their inventory into a lottery of real/counterfeit/broken/returned stuff.
On Amazon, you can still get some value from the 1-3 star review contents, but the average star count (which is similar to eBay's % positive ratings) is almost meaningless since any number of negatives can be outweighed by near infinite fake 5-stars. That doesn't seem to happen as much on eBay (although I'm sure it does still happen).
Even if you do, inventory co-mingling means that sometimes the seller you think is the seller isn't even the seller!
they don't. when you buy something from a top seller, they get an automatic 5 star rating for that purchase. you have to wait many days (5 i think) after you receive the item, to lodge a less than 5 star rating. the rating is across a few categories, with unknown weighting, so even if you successfully put in a 1 star rating (which you have to justify), the weighted rating is still above 3.
"top seller" status doesn't have anything to do with quality, just as "amazon's choice" has nothing to do with quality.
It has an abysmal user interface that seems to have been built by 100 team with an intense hatred for each other.
The feedback system is broken. You can't leave feedback if you opened a case against a seller. Many sellers I had serious problems with had stellar reviews.
The resolution system is also pretty bad. If you open a case that gets automatically closed without being solved, you better hope it all happens within 60 days. Thankfully, PayPal is better run.
Now I really view Amazon as two separate products in one interface - there's the Ebay style bazaar, and then there's the first-party store. If I'm looking for a brand-name item, like an iPad or some other gadget, or some camera gear, I can often find it on Amazon and it'll be "shipped from and sold by Amazon", or there are a few other sellers whose names I recognize (like Apple or Adorama for the camera gear I was recently looking at) that I trust to buy from. More and more there's also the Amazon Basics brand covering everything from batteries and usb cables to snacks like trail mix, and I have come to trust their brand as well. These things will generally ship with prime shipping and arrive in 1 or 2 days, I get 5% cash back on my amazon card, and it's convenient to check out and I generally can trust I won't have any issues.
If I'm looking for something that's not brand-name, and I want to pay the cheapest price I can for something that gets the job done, I can venture into the bazaar land. I recently bought some patio furniture and a rug that were quite cheap, and they work pretty well and have been awesome for using my outdoor space during the lockdown. In this side of the platform I know I'm making sacrifices, I often don't get prime shipping, and I may even get counterfit items. I would never buy things like vitamins or lotion or make-up here in the seedy back alleys of the store. And often I do opt to use a different e-commerce site instead of Amazon, rather than risk it here. But I still buy from here occasionally.
I still think Amazon should do more to differentiate these two worlds, the high-trust vs low-trust platforms. But as a frequent user I now know what to look for and am mostly able to distinguish between the two, and I have to admit I do appreciate that the low-trust, 3rd party world exists. It gives me more choice as a consumer, and the alternative is that most of these items wouldn't be available on Amazon at all.
I think this has more to do with a lack of meaningful competition than anything else. I'd happily go back to 1-2 week shipping if I could order from a more trustworthy source. I've only had a few total duds from amazon and they were all under $50 and not worth even returning, but I accept that I'm basically rolling the dice with every amazon purchase at this point.
> I do appreciate that the low-trust, 3rd party world exists. It gives me more choice as a consumer, and the alternative is that most of these items wouldn't be available on Amazon at all.
I'm largely fine with it 100, assuming that amazon is wiling to refund or replace anything I buy that turns out to be crap. That gives them an economic incentive to do at least the most basic policing of people selling on their site.
A good way to introduce meaningful competition is leveling the playing field when it comes to return policies. The ease of returns at Amazon is often brought up by US users in these discussions. And it's indeed great. However in europe it's a non-issue since all shops have to offer a 14-day no questions asked return option. Wondering whether I'll be able to return an item isn't part of my purchasing considerations at all - regardless of where I shop.
In my opinion good legislation and reasonable minimum standards for all sellers enable competition.
Now when I go to Amazon they push the lowest cost thing even if by a $1 (like Wallmart). These weird "Amazon's Choice" options are increasingly lower quality cheap stuff. And Amazon day feels like a garage sale where I think they're pushing out their back stock of rock bottom quality garbage ... more than usual. And that's not to mention fakes and etc.
At this point I'm shopping around the internet way more than I used to when I was all about Amazon first.
What do you mean by this?
Amazon has had the lowest price for basically everything I’ve shopped for in the last 4 years. When it is higher on Amazon, it’s by pennies (because algorithms) and not for very long.
At home there’s a grocery store at the bottom of my elevator. It costs less money for me to buy groceries on Amazon Fresh with same-day delivery, than it does for me to go downstairs and buy my own groceries. Not a little bit less either, like 20% less. Same products!
I don’t even have to be home, the groceries just materialize at my front door whenever I schedule them to.
I think HN just gets on a negativity roll sometimes, and the most extreme or exaggerated comments float to the top.
I’m sure there are plenty of externalities, probably moreso with Amazon than most any other company... but let’s not pretend that Amazon isn’t doing amazing things for their customers. The efficiencies they’ve added to my life have saved me hundreds of hours.
They’ve done that with a business model that (allegedly) monetizes the widespread violation of all kinds of regulations while (allegedly) externalizing all of the liability, and it’s devastating hundreds of businesses, and a million other things ... but on the other end of all of that is a very happy customer.
There would be no point to playing so dirty if there was nothing in it for the customer. It wouldn’t even work, we would all just go back to K-Mart.
For things like PC components, I find them hit or miss. They might be the cheapest (or near it), but they might also be way more expensive than another legit retailer. These days, I always check, because they are so variable. A lot of that is probably that Amazon doesn't carry everything, and other sellers are a crapshoot.
I don't know where you live that their groceries are so much cheaper, but it isn't true here in Texas, where HEB (the dominant grocery chain) is hard to beat.
Groceries? I find that Amazon almost never wins there compared to the local grocery chain. That most certainly is going to end up being a "where you are right now" kind of thing compared to computer parts.
Amazon beats other shops in terms of convenience and selection (you can buy lots of random unrelated items and get them delivered fast), but often it's basically just a more upmarket eBay.
Their prices are almost always the lowest I can find on books, similar to Book Depository which they also now apparently own. Other items like the small kitchen appliances I've bought on the DE site are also almost always cheaper than I can find in brick and mortar stores.
I'm not sure they have the same grocery service in most European markets that they have in the US, where as I understand it the grocery orders are handled rather separately with local selections.
For instance, my local grocery store has 2 liter Diet Coke Caffeine Free for $0.99 (on sale, sure, but it occurs like clockwork every 2 weeks), while Amazon Fresh has it for $1.74. Plain bagels are $1.99 at the grocery store, while AF charges $3.24.
Could it be the case that your local grocery store is simply overpriced?
But I don’t trust it for anything that goes into my body any more. I’ll make a trip to a GNC to buy ON protein powder. I don’t trust Amazon to sell my something from the actual manufacturer.
That’s new for me. Just in the last couple of years. The risk profile of getting a bad knockoff is overwhelming now. And for ingestibles it’s just not worth it...
costco.com has this at a good price with fast free shipping: https://www.costco.com/optimum-nutrition-gold-standard-100%2...
For example, recently i had some items missing from Amazon and some items missing from Instacart. Refund from Amazon took a few minutes. By contrast, i've spent a very long time dealing with Instacart (and more hours sitting on hold, and weeks waiting for promised followups that never came) and no refund yet. Instacart is just an example; there are many other merchants with poor return policies (or poor execution of return policies), and many others with good return policies. The competitive advantage of Amazon here is that it's hard to quickly find out whether a merchant that you haven't used before has good customer support, which pushes you towards sticking with a merchant you know.
You can build something much, much better with about $100 with a Raspberry Pi, depending I guess on the camera quality. Are there any features unique to the Ring?
I am an advocate of using something like RPi's for Computer Science in Africa but I am a missionary without a following (thank goodness there isn't another crank like me going to central Africa).
It may not be obvious to someone not experienced in the design of battery-powered electronics, but that much battery life from a device with wifi and streaming video is very impressive - they must be making extremely good use of low-power sleep modes on their CPU, radio and camera.
Being battery powered means it can be self-installed, even by people who don't know a serial terminal from a screw terminal.
At individual level, I’ve markedly experienced degraded customer service in last 1 year. For instance, I have to deal with hassles in cases where product sold by amazon (not 3rd party) had defect. The key reason I moved to Amazon bandwagon was: no hassles.
To me, Amazon’s day 2 looks likely now.
It was great while it lasted.
with amazon it's convenient and honestly the support (while hit and miss) is still better than the effort you get from minimum waged retail workers. i am getting annoyed at the rise in rubbish and duplicate listings though.
This is empirically false. Amazon is the second most-trusted brand in America.
https://morningconsult.com/most-trusted-brands/
It's wild how easily SV types will tweet things like "No one trusts Amazon!" when the reality outside the Bay Area is so radically and demonstrably opposite.
Although, really only in my childhood..
I would say that they are hurting for trust, right along with everyone else.
Also amusing: weather forecasting in the top 5.
91% have a favorable view of Amazon
73% trust Amazon with their information
70% say Amazon has a positive effect on society
81% would be disappointed if Amazon disappeared
https://www.theverge.com/2020/3/2/21144680/verge-tech-survey...
Also didn't some celebs get their iCloud (or whatever their offering is) accounts hacked?
I am not saying that I personally find them less reliable than MS, but I can see why less techie people might have a mistrust.
Anecdotical, it's wasn't long ago that I was deeply impressed by Amazon's customer service and quality. This has changed drastically, and today I go as far as only using Amazon if I basically have to. Thanks to recent developments (I'd say over the past few years), I now prefer either the manufacturer's website, or shops specialized on the relevant subject. I even get my consumer electronics from Best Buy.
I might be a bit extreme there (or maybe just "further along", depending on how you look at it), but Amazon having gone downhill--from once being well-known for its customer facing qualities no less--is certainly not a new or hot take.
I tend to think this slow way is alot harder to bounce back from. It took what, 3 generations? For Japanese-made cars to be seen as equal to or better than, American made cars, because for a long, long time the perception was that Japanese-made was crap (and it was). It took generations to overcome that point of view (because it took generations to form it).
It looks to me like the same is happening to Amazon. Not many people fully trust Amazon anymore, but also don't distrust it enough to say "I don't trust it!" to a survey. More like "Well... kind of... ok sure... I trust them."
I would really like to wonder of the people encountering frequent fake products on Amazon, what categories are you shopping in? Is it fashion items or something similar? My main Amazon purchases are household items/toiletries and then hobby electronic parts. I haven't had any issues with these - and beyond the review issue the Amazon pricing/delivery time/return policy is by far the best of any site I've dealt with.
There was an article recently with pictures of the real and fake items, both from Amazon. You wouldn't know which was which even if they were side by side.
But the fake will probably fall apart faster, may leak poison and is overall not what you thought to buy.
And that is all aside from the issue of fake reviews, which are so prevalent as to be the nrm. So the product might be an original, but it is not what you thought you were getting in way of reliability or noise et al.
A fake wire sodder, which was pretty expensive and cost me in damage to the item I wanted to build. I turned to the manufacturer and complained, and they asked me to send images... it was a fake.
We got Desitin with a very weird consistency and smell. I am convinced it is not real, and have been afraid to use it.
An external disk drive, wich wasn't fake, but was also clearly not the brand it said on the box. I complained about that, and am still waiting for a resolution.
Those are what I recall offhand, but mostly have been avoiding Amazon.
Even when it's not counterfeit a lot of brands sell a cheaper version on Amazon than they do through other retailers.
https://thewirecutter.com/blog/i-bought-these-things-from-am...
Edit to add: just last week I ordered a potty training seat from Amazon. Great reviews. Supposedly installs into every kind of toilet. It shows up and, predictably, does not work properly with any of our toilets. I wish I would have gotten it from Target or the local consignment store where I could look at it and ask about how it works, and I probably would have if not for the lock-down. So Amazon is getting my business right now, but it's very begrudgingly.
Upside is it soft-closes, so as to not BANG shut.
(Bezos does own WaPo, though.)
My last purchase was a lawn chair that was advertised with attachments, there was only one tiny 8point font note at the bottom that said translation something like "attachments are just attachments" which could vaguely be interpreted as attachments not included while all of the pictures and descriptions featured them. My return got denied.
All of the reviews are fake on thse two storefronts too. There are often promotions of "leave 5 star review with at least 3 pictures to win an iPad!" which would be illegal in many countries.
As much as I dislike Amazon, they are by far the most trustworthy general store front I've used.
Package lost? They send another one free. Package delayed too long? Get a refund (and keep the package when it arrives). Don't like the product? Return it for free.
There's never any friction, even in the bad scenarios. Combined with the fact that they consistently have the lowest price, it's hard to argue in favour of other services.
1. Is Google really all in on product search? Their product search is pretty bad at the moment and it's a very challenging search space, esp when you work with tens of thousands of retailers. Going directly to retailer/niche-platform sites usually works better for me. For example, for music related I go to reverb.com, for outdoor to rei.com, etc. I then to Google and Amazon for reviews if needed.
2. Distribution and fast shipping is something Amazon has invested in for decades. I still need to wait longer than a week to receive items from retailers such as REI and others. Not an easy problem to solve.
3. Competing with Prime. Amazon ships everything including groceries. That's a big plus of Prime. Not only you get fast shipment, but you get everything you may need so you rarely need to use a different service. And with a credit card from Amazon you get 5% cash back on purchases. Everything is included.
Disclaimer. I own Amazon stock.
I wonder how much of their slow delivery is them under promising and how much is them actually not being able to get things out in a day or two. None of the other vendors I’ve worked with, except Nespresso oddly enough, have been able to match Amazon’s actual performance.
I wonder if it’s just because I happen to be close to a lot of warehouses? Still very weird for Amazon to be sandbagging themselves regardless.
Also, when FBA stock depletes, sellers have the individual option of whether to direct ship or not. Some are, and some are using expedited shipping, but others are either not shipping at all or are using the cheapest freight possible.
They are advertising their shipping speed as being worse than it is, causing people to think competitors are faster, when, typically, Amazon is still superior.
Edit: needlessly inflammatory language
The delivery quality is worse than bad, and has lead to us getting boxes stolen because Amazon drivers dump them at the quickest most convenient place for them - like Amazon drivers are incentivized to maximize time efficiency and every second counts. It's super painful.
We're now using other websites to buy from simply because their delivery takes approximately the same but goes to our door.
Honestly, Amazon's own product search is pretty terrible too, unless you're searching for a specific name-brand product. Google might not even have to be very good to be competitive.
The best product search I've actually found is NewEgg's (for computer parts, specifically). They're the only one who's collected enough accurate product metadata to facet their results effectively.
In the specific sector of car parts, search is based on the year, manufacturer, model, and trim line/options of the vehicle. What's weird to me is that every one of these retailers has a point of sale system that works on the "specify vehicle, list and search within parts" model, yet they're using a traditional/"Amazon style" search on their own website.
RockAuto's site is ugly, but it's extremely functional. Their business model has complicated shipping (sometimes buying a more expensive item from the same warehouse as another item in your cart is less expensive after shipping than buying a less expensive item from a different warehouse) but there are UI affordances that make this easier to deal with. It's kind of sad that "show the shipping cost in the shopping cart, on the same page as the product list" is a noteworthy UI affordance, but it's so rare. (Also the option to select several items that meet spec, and it will automatically select the overall lowest cost after shipping set of products)
I went to their site to see how ugly it was, and was absolutely blown away by how visually terrible it is. Truly function before form.
If they could just include shipping when doing a "sort by price", or a price limit search, that alone would help SO MUCH.
I pick "prime only", "under $10", and I get results where some other non-prime seller is selling it for under $10, with $15 of shipping. Useless.
Actually even ignoring shipping, if the under $10 price is for a non-prime option, why is that being included in a "prime only" search for under $10?
That's the primary way fake reviews happen. The seller gets thousands of sales of a high quality, good product, gets great reviews, pictures etc. and then they bait and switch to a cheaper, lower quality product at the same (or higher, because REVIEWS) price with a bigger margin.
Huge problem over there and Amazon has done nothing to stop it.
Investing heavily in logistics connected to transactions is what made Amazon excel over Walmart, Target, UPS, Fedex, etc. How many companies setting out in online commerce have the amount of backbone infrastructure as Amazon?
The closest I can think of is Taobao/Alibaba.
2. I think this is something that is burned into people’s heads but not actually true. Most retailers do offer pretty fast shipping. Even with prime you’re paying for fast shipping (in the membership fee).
Definitely drop frys.com from the list, they are going out of business. Actually, except for microcenter.com, I wouldn't buy from the others either. newegg.com seems to have the best attribute filtering by far.
I really don't understand why Fry's isn't out of business.
Do they own the real estate they're sitting on or something? Are their online operations that profitable?
Sure, a private company can carry losses for as long as they have money. But, why would you?
https://www.sfchronicle.com/business/article/Is-Fry-s-Electr...
https://venturebeat.com/2019/09/10/frys-electronics-isnt-res...
A quick search gives some mixed results. They own their San Jose property¹ through an affiliate company. This affiliate doesn't appear to own any other Fry's property though². Conversely, the Palo Alto location was closed when the lease ran out³.
¹https://www.mercurynews.com/2020/01/10/industrial-mega-devel...
²https://www.corporationwiki.com/California/Menlo-Park/caraco...
³https://www.mercurynews.com/2019/08/29/frys-to-close-its-pal...
Ah! That probably explains it.
Any residual money can be drained into the affiliate companies before filing bankruptcy so that there is nothing left in "Fry's".
I've been purposely going to Microcenter, and buying stuff there in the hopes that they'll stay in business. There's no other computer stores in the area of note.
Either Google never goes all in, or they do not know what all in means
Most grocery stores still don't have online ordering. Years, and years, and years, after Amazon entered the field, the other grocers have just decided to lie down and die.
Still waiting for Chapters (a bookstore in Canada) to start sending me reading good reading recommendations.
Still waiting on VISA to make generalized gift cards which are not miserable to use.
I'm trying to think of any industry Amazon took out when even tried to fight back. Most just whined their way into oblivion.
The problem with non-Amazon companies is that they don't do anything excellently.
OTOH, I am still waiting for Amazon to make the ads which appear on my Kindle lock screen have even a modicum of relevance to my buying/reading habits.
As far as grocery stores are concerned, I find that their combination with Instacart does a great job on that front.
Why do you need the store to recommend to you what to buy from them next? Obviously the store is only going to recommend content which maximally increases its profits, regardless of whether that content is worth your time or really in tune with your most passionate interests. Buying the book from a shop is a necessary evil (unless you just want to read pirated ebooks from LibGen for free like many Kindle owners are doing now), but for getting recommendations on what to read next, why not look to the numerous internet communities of passionate readers who are not motivated by financial self-interest and may better serve your particular tastes?
I have lists upon lists of of music, library ebooks (the free way to not pay!), and video games as well as multiple lifetimes worth of free content on the internet. What today's consumer craves is for anyone to reach in, show them the next perfect thing, and promise that the barrier to entry will be worthwhile. Some fans immediately know what they want next thanks to friends, critics, or their own insatiable research, but most people* desire a buzz of encouragement to get them started.
* I use the phrase "most people" very deliberately here. The Blue Ocean Strategy theorizes that there's always a new demographic to pursue. Reduce the barrier to entry and some increase in customer retention is almost guaranteed.
It is about uncovering things that are of value, but that I might not think of immediately.
This just reads like people who buy humble bundle games or steam sale games.
I'm tired of people lamenting the loss of true retail and blaming disruption for any negative changes in the world. The fact is, entire industries outside of Bezos' world flourished from these failures and continue to thrive as long as Chapters doesn't use big data, Visa doesn't make an intuitive gift card option, and the family-owned grocery store doesn't have software to share inventory online.
Most of the zombie companies had excelled at some point in the past - even a joke company like Sears was once the pinnacle of innovation. At this point I'm just convinced companies that decided to "lie down and die" are cases of competing goals among the decision-makers. Some are too non-confrontational, some are egomaniacal, some stifle innovation, some are too audacious, and lots of executives, board members, and consultants flourish regardless of the result.
The result is an unhealthy economy that is constantly getting conned by those who know how to play the game. But maybe that has always been the case...
They could be great again if they leveraged their old "good, better, best" strategy. Instead of trying to sell all the things like Amazon and Walmart do, they should be offering a broad, curated set of items that are reliable and binned by those three quality descriptors.
This specifically addresses the issues many people have with buying from Amazon.
https://www.amazon.com/Last-Sears-Catalog-Roebuck-Company/dp...
An online store would "take away" business from their retail fronts and would face plentiful sabotage. It isn't like they had a frontier out west to ship to as the "new domain" that respected their nice little boundaries.
Organizations age poorly by default. People become motivated to climb the org chart--or, even easier, to stay in place while sprouting new branches under themselves. People become risk averse and unimaginative.
The only way to avoid that fate is with strong leadership. Starship will replace the Falcon 9, and I'm sure there are people on the Falcon team who are not thrilled about that, but the show goes on anyway. Everyone is on a shared mission. It's clear that SpaceX culturally doesn't tolerate people more concerned with internal politics than they are with going to space. Culture comes from the top--the founders, the CEO, and flows from there.
[0] https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma [1] https://duckduckgo.com/?q=vulture+capital
I don’t know if there’s a lesson here for grocers, or maybe Organic Valley (a farmer cooperative) is a closer model.
If you are not clear on what your secret sauce is, or what your competitors think theirs is, it’s hard to be open about commodifying things that aren’t critical to you but are to your customers. Shared logistics systems? Probably trade secrets there. Other things? Maybe not so much.
Local bookstores are much better about this.
I can also order groceries online from Safeway and either get it delivered or do curb-side pickup from my local store.
My Twitch account was accessed and the person made a whole bunch of purchases on my account. Twitch customer service basically doesn't exist, so I went to paypal. Paypals system throttled me when I tried to report each action.
With my bank, I can call a number, say "These are all fake" they instantly cancel and refund my money, and I can file chargeback / fraud paper work.
Paypal has a long ways to go customer service and customer experience wise still.
Everyone but Trader Joe’s delivers where I love (SF). I don’t think this is true.
> I'm trying to think of any industry Amazon took out when even tried to fight back. Most just whined their way into oblivion.
Remember the Fire Phone? Amazon doesn’t always hit home runs, they have a ton of money so they can afford to fail fast and reinvest elsewhere.
So... the most technically forward city in North America? I'm in Calgary, which is not a tech hub.
> Remember the Fire Phone? Amazon doesn’t always hit home runs, they have a ton of money so they can afford to fail fast and reinvest elsewhere.
And these companies start as the incumbents, which gives them time to at least copy and respond. Amazon had to steal every customer from them.
(I'm not affiliated with Amazon other than that I've been a customer since the 90s)
For instance, in retail, Walmart does substantially more business — via brick and mortar stores — and is rapidly growing online.
[1] E.g. from many: https://www.nbcnews.com/tech/tech-news/amazon-fires-two-empl...
[2] Previous straws including the steady decline of their website, increasing fraudulent goods, and so, so many bad customer service experiences.
> Also, restrictions on your efforts to communicate with co-workers cannot be discriminatory. For example, your employer cannot prohibit you from talking about the union during working time if it permits you to talk about other non-work-related matters during working time.
I worked at a place where all emails had to be work related.
That was in the Cable TV Industry. Which, in it's own way makes sense; that industry has a 'Owner'->'Prime Contractor'->'Subcontractor' tiered setup for work that has always had the unspoken purpose of preventing field workers and installers from unionizing.
Wanted to send out an email about a fundraiser or special weekend craft thing? Had to have HR give the OK.
-IF- Amazon had and enforced such a policy it could be considered non-discriminatory. But I'm somehow doubting such a policy is fully enforced even if it is on the books.
(This was in the UK.)
And I've tried google's shopping - blah. If that's your starting point we are going to be with amazon for a while.
Recently tried to avoid amazon - got some stuff from a name brand retailer. The return process required a 40 minute hold time, and because it was one order they only give one return label even though order came in two large boxes. So now it's around and around to try to figure out the second label. It's apparently an outsourced return provider (is that a thing) so the logic / communication related to the original sellers product is terrible.
The last time this happened they ended up giving a store credit for sale price, a refund and never sent the label! Ended up giving away a pretty expensive item ($150). I mean it's just a totally unintegrated system
Compared to amazon (walk into Kohl's / UPS store even unsealed / drop in a locker / give to mailroom to give to UPS guy, stack item on UPS box in garage etc etc) it's night and day different.
Even if someone can afford that, I think it's been demonstrated futile to try to affect market behavior on the basis of employee treatment that's so normalized to everyone. Boycotts have worked on other specific issues on certain brands but it seems like people just don't care enough about Amazon's worker treatment or Nestle's horrible activities in Africa. So if those are never going to change without legislation then I can't really hold it against anyone for not paying out the nose to avoid Wal Mart and Amazon.
Amazon works, proved it works in a serious global crisis, does better job than that other "service" that takes a lot of your paycheck. Now you maybe can't get some niche item, or you shop stupid, doesn't mean it's not a wonderful service and perfectly valid utility.
Amazon is a company that does actual stuff, it's not just software that should have "better product search".
- They are ego driven, with legacy execs & others relentlessly protecting their status - whereas Amazon is relentlessly data-driven
- They have poor incentive structures and are feature factories. They value velocity over outcomes. Amazon, by being more data driven, is focused on being extremely outcome oriented
- Because of the first 2, Amazon can give people and groups a tremendous amount of autonomy, whereas other orgs heavily micromanage or have structures that create more politics than value
- There's little place to hide at Amazon (which means you might work your ass off!)
To compete with Amazon, you have to learn from them, and be prepared to adopt their practices as the new industry norm. Not just dismiss them as some relentless and heartless evil empire.
They sell products at a loss to gain income in other places. For example, if you are a content producer you are competing with a company that sells "ad-free" video (Prime Video) attached to a low-cost service (Prime) so that they can sell more goods online.
Amazon is killing content producers by running a negative margin content business to do sell-through on e-commerce.
Amazon is killing video encoding business by selling a negative margin video encoder to sell through AWS compute.
This is extremely common in every "field" Amazon is in. They run at negative margins in one huge sector of business because it drives massive income in another.
That is a strategy only available to... monopolies. You can't afford to compete with them, because they are not _even trying_ to make a profit in your sector.
Prime all together only made 14 billion. Considering that prime almost assuredly doesn't cover its 2day shipping we can be very sure, the video unit is _certainly_ not positive.
What's even more important is this quote from Bezos, which directly states it's their strategy:
"We get to monetize [our subscription video] in a very unusual way," Bezos said. "When we win a Golden Globe, it helps us sell more shoes. And it does that in a very direct way. Because if you look at Prime members, they buy more on Amazon than non-Prime members, and one of the reasons they do that is once they pay their annual fee, they're looking around to see, 'How can I get more value out of the program?' And so they look across more categories — they shop more. A lot of their behaviors change in ways that are very attractive to us as a business. And the customers utilize more of our services"
https://www.businessinsider.com/amazon-ceo-jeff-bezos-said-s...
It's a _publically stated strategy_.
Maybe for subscription video specifically Amazon is more unusual, but it's certainly not because Bezos came up with some wild strategy. Movie and TV producers themselves aim for far more monetization than just the sticker; merchandizing, product placement, ancillary media (sountracks/interviews/tie-ins), etc are all things commonly aimed for. And even for subscriptions there are players like Apple, who clearly are interested in selling more Apple hardware.
I guess what bothers me about what you're saying is that I don't think it makes sense that every single unit in a company needs to "pay its own way", and on the contrary that sort of reasoning in management is the source of a lot of horrors many of us have experienced in IT. Security say gets cut to the bone because it's "not a revenue generator" and down the road systems get broken into causing tons of costly damage (infuriatingly often externalized too to add salt to the wound). Outsourcing sometimes can be an answer, but that sometimes creates its own major headaches as well. Amazon's size and weight certain give rise to concerns that might be lower elsewhere, but some of the bonuses they bring represent quite genuine economic value, and either way I don't think justify what seems to be a general argument against vertical integration.
My guess is that Prime Video exists as a "gateway drug"; you get it for the videos and then realize that extra $4/month or $11/year will get you free shipping, and then you're back to "if I order $120 worth of shipping, it'll pay itself back" thinking.
Some retailers do this too, mainly warehouse clubs (e.g. Costco and Sam's Club).
So, Costco? Or other member/buyer-club type things across many industries? It seems to have become somewhat less common, but it's still not remotely a unique idea. Psychologically, even expiring coupons and sales invoke some of that feeling of "use it or lose it".
>My guess is that Prime Video exists as a "gateway drug"; you get it for the videos and then realize that extra $4/month or $11/year will get you free shipping, and then you're back to "if I order $120 worth of shipping, it'll pay itself back" thinking.
It's interesting you have that perspective because I've always heard and experienced it as the opposite, though I haven't followed it for a while. Prime of course started based fully around shipping, and it has seemed fairly common for a lot of old Prime users at least to never use any other Amazon services at all despite them really, really pushing them. I never have either personally fwiw. If you're doing enough business with Amazon (~$5.1k+/year) it's also probably more direct to just use their dedicated card I guess.
And there's a reason upfront costing has faded in general, it's usually discouraging rather then encouraging. Causation seems more likely to flow the other way: somebody looks and sees they're doing quite a lot with Amazon already, and then decides to try to further leverage it. Of course, Amazon certainly wants to encourage this and support it so that customers don't "grow out of them", and being a full fat full service provider probably can aid them in retention. I'm not sure all this supports the original contention however.
nothing requires a monopoly. monopolies are manipulative (cross-)market distortions.
I think though we need to recognize that Amazon is succesful for a reason, and those reasons are why they are in a position to invent even deeper and more relentlessly...
The last 20 years of PC gaming has been one of theft and grand larceny by steam, valve, EA and co. We used to get dedicated servers and level editors in games.
The internet allows companies to steal software from the point of production, because 2 or more computers in a network act as a single machine. So that means the internet is one giant world sized computer that companies de-facto own and control because they now "issue commands" to other nodes in the network.
We now live in a digital authoritarian society where we must get permission to use our software and have no privacy if we want to participate in the culture.
AKA the internet has been the greatest force for software theft and dispossession in all human history.
Because of the criminal way in which IP law was coded the public never got any property rights and this has created the greatest human rights disaster in all of history.
DRM in the OS, apps or games is literally you living in an open air prison and CEO's and government orgs can literally spy on everything you do.
Windows 10 is a case in point. There's no reason for client-server software anything for a home user.
We used to have to deposit a quarter every time our character died, and with zero save points.
Steam would have never got off the ground in 2004 if we had portal technology, man would have gotten killed.
IMO, this is like asking "is it still a democracy if the people don't decide on every bill directly?" In a sense, the answer is no–but I still feel comfortable using the word democracy.
I'm going to keep going with this analogy—IMO, idolizing the idea of a completely unregulated market is akin to idolizing the governing structure of ancient Athens. Yes, the rules we've added over the past millennia make us less free in a way—but they also make for a more sustainable system. These refinements are a sign of maturity.
I think you're caught up in an is/ought conundrum though: "idolizing the idea of a completely unregulated market" is the discourse! That's the pro-side rhetoric in a nutshell, how bills and laws get passed, and how the (US) economic system is constructed. So don't blame my inference, it's just what I'm reading in the newspaper.
https://www.statista.com/chart/18819/worldwide-market-share-...
But even AWS admits that only 5% of Enterprise workloads are using any cloud provider.
Also that includes IAAS and PAAS and private cloud services not companies like Linode that offer just a VPS nor places like Rackspace.
If you want a simple group of VPS’s to setup your own website to sell goods and you’re hosting on AWS (outside of Lightsail), you’re doing it wrong.
I’m a cloud true believer, know the ins and outs of AWS well, etc and I wouldn’t use AWS - besides Lightsail maybe - if I just wanted a VPS.
And retailers like Target who get consistent customers that compare products in-store just stop carrying their competition.
I'm not sure I agree with your characterization of that as a monopoly strategy, and I'm also genuinely curious how you know those are "negative margin" services. To the first, the strategy seems more about vertical integration than monopoly per se. Plenty of businesses aim to make a profit overall, but either have an outright strategy of loss leaders or more commonly have individual services that are absolutely necessary to the rest of the business yet are not profitable in and of themselves. And if the opportunity comes to leverage some of those internal divisions to some degree it can be completely reasonable.
To the first, the console market would be an example of a competitive sector (at least since the mid-90s) where players have quite fairly run one part at an initial loss (hardware in the first few years) with the plan to make it up on add-ons. They can further average break-even or profit over the product lifespan, because the hardware functionality is fixed but will be vastly cheaper to manufacture in Year 7 vs Year 1.
To the second, it's not uncommon at all for a business to require a certain amount of internal hardware or services for operations that is sitting idle a fair amount of the time, generates no direct revenue, or both. This is part of the whole logic behind cloud computing, or the constant tension of critical IT being seen as a "cost center". There isn't much minimal size for that to be the case either, even a small company may easily have a share of underutilized kit. In those cases, the marginal cost can be extremely low, even near-zero. If it can be turned into any sort of useful service or value-add at all with low enough overhead then it's still of value.
So I'm concerned your formulation is overly reductive of any company to its parts. The vertical strategy has real advantages as well as disadvantages, gains that are quite genuinely win-wins which is why they work. For AWS for example, that's a core business for Amazon and also something they require for their own activities. How much of the capacity is sitting idle at any given time so they can be prepared for when actual high priority customers need to spin things up? They certainly require significant margin to respond to variations in demand. Video encoding seems like a great way to fill troughs and average things out, since it can easily be run low priority, and the marginal cost is going to just be the electricity running chips at full vs power saving. Compared to all the cost of having the datacenter and hardware and staff supporting it at all, even just sitting around doing nothing, that's probably a pretty low fraction. Is video coding actually costing Amazon money vs what value they gain, or is it simply an area where they quite genuinely can do it for less, putting otherwise idle necessary capacity to use? And what about Azure or GCP, or even someone just running dedicated encoding hardware? How does Amazon have a monopoly on compute? If they're merely able to do it cheaper thanks to scale, what exactly is the problem? If they raised prices above what competitors or someone could do themselves where is the lock-in for video encoding?
What product are you referring to? I'm in this industry and based on my experience their video encoding+storage+streaming offerings are actually higher priced than their competitors. The reason their services are popular is the integration with the rest of AWS (which is true for most of their offerings).
The only cheap thing that Amazon offers is fast shipping for low-cost products, e.g. buying a $3 cable and getting it shipped for free the next day (assuming you have Prime). But for anything above $50-$100, Amazon is almost always the more expensive option.
https://slate.com/technology/2013/10/amazon-book-how-jeff-be...
The whole point of predatory pricing is that you jack the price up if you don't currently face any competition and use the threat of plunging prices to scare off competitors, so of course they're going to be more expensive by default.
Take the encoding example above, you might pay a competitive price for the compute time required to encode, but you'll be paying some of the highest bandwidth fees in the industry if you were to stream out your encoded video to multiple viewers.
Where electronics are concerned, for years I would go to Best Buy to look at merchandise first-hand, then go home and buy it from Amazon, because Amazon was almost always significantly cheaper (especially before they started collecting sales tax).
Now it's the opposite.
I use Amazon to find products, read reviews, etc., and then I go to Best Buy's website to order it. It's almost always the same price or lower at Best Buy, and since I happen to have a Best Buy store only five minutes from my house, I can order it and pick it up in under an hour.
For instance it didn’t make sense for DropBox to stay on Amazon but it did make sense for Netflix.
x264 is good but not the benchmark. x265 is simply mediocre.
That aside, as others have pointed out, there is the whole "in the cloud" thing which has to do with global TCO.
Also the pricing you can get of the AWS site doesn't look a thing like what an actual content distributor with 100 of thousands of hours of content gets.
Also, “the others” that pointed out TCO - was me.
That being said, their ecommerce org was still a complete mess. They were spending a ton of money operating a homemade ecommerce platform based on 2007 technology. They even had a mainframe running some critical features that they couldn't manage to deprecate. They ran everything focused on costs and didn't even do it right because they never considered the long-term benefits of investments. The architecture was multiple balls of mud. Teams were all aligned horizontally. Meeting customer needs wasn't never a factor in any decision making that I saw (and I spoke regularly to the CTO).
What does this mean?
GIMP hasn't killed Photoshop. It's all about giving value for money, or at least the perception thereof.
A practice neither invented by nor exclusive to Amazon, but they tend to get called out on it often, anyway: https://en.wikipedia.org/wiki/Loss_leader
I don't think this is the case. The strategy is called a "loss leader", and it's a very common business strategy.
https://www.investopedia.com/terms/l/lossleader.asp
> Loss leading can be a successful strategy if executed properly. A classic example is razor blades. Gillette, for example, gives their razor units away for free knowing that customers must buy their replacement blades, which is where the company makes its profit.
It's true that big companies can find profitable loss-leaders where small companies can't -- though this isn't always true; my startup uses a loss-leader B2B product to unlock a more attractive B2B2C offering.
I think what you're observing is that monopolists tend to be more able to use loss-leaders, since their monopoly power gives them the ability to charge a premium on their monopolized good(s), which would increase the scope of profitable loss-leaders. However loss-leading is certainly not a monopoly-only strategy.
Both exhibit the same behaviors with the same explicit goal.
You are debating semantics when the intent in both cases is the same.
In new markets we tolerate monopolies because we want to reward entrepreneurs.
The question to ask is whether the cost of rewarding Amazon with monopolies is beginning to outweigh the benefits.
It's certainly a scale thing. What's notable about Amazon is they can run a losslead for an entire sector of industry, not just a single product. Note a grocery store could loss lead toilet paper so much no one can afford to produce toilet paper (maybe); but, could you imagine one which could afford to loss lead _all paper products_ to sell more coffee for long enough to wipe out all other paper retailers?
Because amazon can, and is, doing this systematically. And after that we no longer have fair-market prices, because there is no market but amazons for these goods.
Wait. And this is 100% not meant to be snide, it's a real question.
Isn't that the actual strategy for tech startups? Work with investor capital long enough to get established and own the market by selling at negative margins, then increase the price once you own the market?
Of course you might price your product less, but from a certain point of view it's less predatory than it is just fair market price. When you are a startup with no customers, your first customer is taking a chance on you. They have no idea what the quality of your product is. They have no idea if you're going to be around to support it in 6 months. All that uncertainty should be factored into the price. If you are a more established startup then the fair market price for the exact same product all other things held equal, should be higher.
- Because Amazon has extreme market power and engages in predatory anti-competitive behavior
Sure it does.
The American consumer continues to empower it to behave that way because no one other than Amazon gives them what they need.
Kind of like how people continue to complain about their cable provider being evil but they don't do anything about it except complain.
Want to solve your cable provider being evil? Start a cheap WISP. Anyone can do it, yet no one does.
Complaining is cheap. It takes a lot of work to actually do something.
The fact that ours is for sale to the highest bidder is problematic, clearly, but the whole point of antitrust as a concept is you can't just start a competitor, because of the predatory anti-competitive actions of the monopolist.
Ah the "government" playbook.
Life does not work that way. If I want to affect change, I have to get the job done.
The "government" is you and I. There's no group of people up in the sky listening to our complaints.
How many of the people here complaining about Amazon being evil have even written a grievance letter to this "government" that is supposed to step in and stop Amazon from being evil?
People are voting with their wallets and they want cheap consumer products with a great return policy made by sweat shops delivered by people urinating into bottles barely making minimum wage after accounting for overhead.
Every single Amazon customer knows this and they don't care.
Yeah, no. They're at 950 Pennsylvania Avenue, on the Blue & Orange line: https://www.justice.gov/atr/about-division
Problem is they've mostly decided not to do their job since about 1997 or so.
Do you not believe the government exists? Regulatory agencies aren't mythic gods, they're law enforcing bodies constructed by the people we vote for in every single election. You don't have to pray to them, you can just write them letters or call them.
Life does work that way, and has always worked that way since the beginning of the US. We have always regulated the market, even from the very first day that this country was founded.
> People are voting with their wallets
Yeah. And they're also voting by actually voting in the real elections that phrase is based on.
It's normal and realistic for government to break up monopolies and force regulations that help the market overall, especially in cases where market forces overall can't be trusted to enforce the same outcomes. We do this all the time; see pollution, price fixing, privacy violation, false advertising, and so on.
Arguably, Amazon itself only exists because of broad Title 2 classifications on the early Internet. No online business can in good faith argue that market regulation is unrealistic or impossible or inherently immoral, when the entire Internet ecosystem is built on top of the exact kinds of market regulation they're protesting: a forced level playing field that was forced by the government even though no individual consumer would have turned down zero-rated, prioritized, or access bundles through their ISPs.
> Want to solve your cable provider being evil? Start a cheap WISP. Anyone can do it, yet no one does.
> Complaining is cheap. It takes a lot of work to actually do something.
That "answer" elides so many problems that it smells strongly of BS:
* Most people who complain about their cable company barely have the technical capability to set up their own router, let alone run an ISP.
* Even a small ISP would require thousands to tens-of-thousands of dollars of equipment, very few people have that kind of money laying around to fund a quixotic endeavor like that.
* The person who runs such an ISP will probably have to deal with a significant administrative burden, including things like child porn investigations. The smaller the ISP the more likely the police are to treat the operator as a suspect himself.
* Even if someone's willing to deal with all of the above, they'd still have to sign up their neighbors. It's unlikely many of them are Sancho Panzas.
* etc.
The solution to most monopolies and other over-concentrations of market power isn't small-fry consumers attempting to compete with them directly; that idea doesn't even pass the smell test. The actual solution is some kind of government regulatory action, and the complaining you deride is part of the process to (possibly) make that happen.
You do realize that all the problems you listed exist because of regulation or can also be solved with regulation? Maybe instead of regulating how Comcast does business we should regulate things so it's easy to have many ISPs. That has a lot more benefits than trying to baby sit the one ISP:
* more jobs (many small companies are less efficient than one large company, economy of scale in reverse, leading to more jobs to do the same amount of work)
* better local community impact (decisions that impact the community aren't being made by people living somewhere far)
* more competition (better services, better prices, see some of the places where there's a lot of ISP competition are also the places that have the best cheap Internet and also overlaps with places with not very strong regulation, or enforcement, that directly affects running an ISP)
When I talk about relaxed regulation that affects ISPs I don't mean relaxed labor regulation (minimum wages, benefits), the bulk of the labor costs for an ISP comes from people that are payed much over minimum wage and get good benefits. But I do mean things like copyright strikes/enforcement and other Internet regulations, I mean things that control who and how can install wires, a fair market to rent existing wires and interconnect with existing ISPs.
I was mainly just responding to the weird idea that "anyone" who doesn't like Comcast should start their own ISP.
More competition would be great, but I think it'd only occur within some kind of regulatory framework that explicitly encourages it, which I think is along the lines you're thinkging. ISPs are basically natural monopolies that require significant amounts of expensive physical plant to operate. The unregulated free market handles such situations poorly, so some kind of regulation is a necessity even if it's not the current regulatory regime.
But that's a longer conversation. Ignoring all of that, the ISP argument is really weird to me.
> Start a cheap WISP. Anyone can do it, yet no one does.
Google started their own ISP, and then almost got forced out of the market by crony regulations that made it impossible for them to compete, despite offering a product that across the board was better priced and had higher customer satisfaction. And this is Google, who else in the US market was better positioned to start an ISP?
A big part of capitalist theory is the idea that markets trend towards efficiency. If you believe that ISPs are ruthlessly incompetent, and that the only thing blocking consumers from jumping ship to a better alternative is that nobody else has built one yet, then an efficient market should have solved that problem at some point in the last two decades.
If you're a Capitalist, and you believe there's an obviously underserved market where customers are constantly complaining about their current options, and nobody is stepping into that market even though anybody could -- well, there are two possibilities there:
A) Either the market doesn't actually trend towards efficiency, and all of Capitalism is wrong.
or
B) There's some kind of regulation, monopoly, or other barrier of entry that means ordinary people can't actually step in and easily compete.
Believing in Capitalism means believing that people follow money. You're telling me there's a massive underserved ISP market, everybody already knows that it exists, and that the only reason nobody has stolen every Comcast customer over the past decade is because people today are lazy? That's not how a free market works.
But of course, Capitalism does (at least mostly) work. So once you do the research on ISPs to figure out why they don't have competitors, you start to discover how many states ban community wifi efforts. You discover how many states still don't have decent one-touch-make-ready laws surrounding telephone poles. You find out how much money ISPs are willing to spend to sue and bully competitors out of the market, and how much government money ISPs rely on to keep their services running. You figure out that a lot of the free market businesses you're championing are basically publicly funded utilities that convert taxpayer money into private profits via exclusive government-funded contracts.
And once you discover all of that stuff, you realize that solving those problem requires serious legislative intervention, and it's not actually trivial to just vote with your wallet, and it's not actually that people are lazy or that they just want to complain. Some of the people you think are just complaining are actually working really hard to try and build (through legislative solutions) the type of market you think is going to magically solve the problem.
ISPs are a really good example of how sometimes if you want a legitimately free market, you have to work for it in government, and not just complain that other people haven't started their own business yet.
Isn't it hard to generalize like this? Consider Apple under Jobs: arguably Apple succeeded because of Jobs micromanagement because Jobs had (to quote Bill Gates) "great taste". Without that unifying sense of taste, you get something like Google, which is quite data-driven, and which doesn't have any unifying personality.
Although, in a way it feels funny drawing general conclusions from observations of unicorns which are, by definition, extremely rare and unique. It feels akin to cargo-culting.
For Jobs-era Apple, your incentive is to make something Jobs liked and the only reason that worked was because Jobs had great taste (subjective ofc) and a strong vision of what he wanted.
Amazon is very very focused on outcomes and that's what incentives a lot of decisions. Being data-driven is a tool to understand and measure the outcomes and inform decisions.
Google from the outside may be data-driven but data-driven to do what?
Jobs wanted to make a great phone, amazon wants to be your everything store, Google wanted to organize the world's information but the company has far exceeded that original goal and it's not clear what they want to do now.
That's what we keep seeing products that seem to exist for their own sake in many companies imo and those products struggle to find footing and die with no learnings.
Interesting point, particularly in light of their history of starting up products only to kill them off 2-5 years later. One could say they are data-driven to sell ads, but that's almost overly broad and makes it hard to explain niches like self-driving cars.
Sometimes they hit a big opportunity like Gmail and it grows like crazy, but a lot of the time there's actually no market for their product, or the technology is nowhere near ready to work at scale. This leads to a lot of canceled projects.
The quality of the companies products then stagnate or rot, as the product people are always in a rush to meet the requests of upper management - who of which have no idea what it takes to make a good product. So everyone's being micromanaged to meet stupid metrics - rather than the outcome - a good product.
As so it's not so much about micromanagement, as so much as having the best decision makers throughout the company. But none of this matters much when you're big, or have a monopoly...
Apple products were visually-distinctive, but I wouldn't call them beautiful; they were relatively easy to use, though I wouldn't call them intuitive. But because they passed the bar in those two respects - in other words, because Apple products were not ugly nor difficult to use, and therefore not completely repellant on their face - the way was opened for Jobs to execute his coup de grace: positioning (through advertisement, third-party association, and pricing) the iMac, iPod, and eventually iPhone as markers of one's own affluence and taste. Everything else coalesces around that kernel of desirability, whether it's warranted or not. The "unifying sense of taste" of the products themselves is an illusion; what matters is that everyone agrees that Apple is the premium choice, in a society where premium (not necessarily fit) is of utmost importance.
This is why Apple stores and support are so crucial. Every generation of Apple product has a competitor that's more elegant, better-performing, more durable and reliable, better integrated within its own ecosystem, etc. But, again, what Jobs understood was that humanity always trumps engineering in the way our social and cultural hierarchies are constructed. Concierge and community are more desirable - more premium - when problems inevitably arise or UX inevitably fails. They maintain the illusion of usability when usability itself breaks down.
Jobs was just really good at playing people.
Apple is the only company that has nailed the premium computer. Why?
I think you're right that platform lock-in is one factor. I think the other factor is that Apple uses their own proprietary operating system. They have control all the way down to the hardware level and that gives them an advantage. When I close a MacBook it goes to sleep. When I close a premium Windows laptop there is a fairly high chance it's going to overheat in my bag. This is of course an issue that can be fixed but its only one of many smaller things that make up the whole product. Because Apple consistently gets enough of them right people look past the smaller flaws and see a polished product in a way that is not often seen in consumer electronics.
Not quite. In fact, the premium media player space is essentially the only one that still exists. They're mostly Android-based devices with high-quality DACs for the playback of lossless, high-bitrate music files.
>Secondly just because Samsung Andriod phones or Dell XPS laptops are nominally premium doesn't mean they are on par with Apple in terms of how they are perceived by consumers.
I disagree. Microsoft's Surface line is also seen as premium, and Lenovo's Thinkpad line is still considered to offer top performance for business and enterprise customers. In phones, Apple is not unassailable in the US, and outside it, deals with heavy competition from Samsung and Chinese brands.
>I think the other factor is that Apple uses their own proprietary operating system.
You sound like a fanboy.
I'm not a fanboy, I have plenty of qualms with Apple. For example they run their new MacBooks so hot that they are constantly throttling. The lack of 32 bit support on Catalina is a pain in the ass and Apple won't let anyone else repair their machines which is BS. I personally use an Android because iPhones are way overpriced but I have a MacBook because I need it for work (React Native). I'm not arguing that Apple is the best I'm arguing that they have a brand image that is well above the competition in a way that you don't see in other markets.
Just the fact that Apple actually provides software updates for devices for years longer than their competitors seems to disprove at least part of this statement. Their investment in retail stores and customer service is laudable, but to say the iPad has any competition in any of the metrics mentioned above is not true.
>Apple actually provides software updates for devices for years longer than their competitors
This is also debatable. The nature of Apple's sandbox means that it's much harder to find third-party support. A nominal official upgrade that effectively bricks your older device doesn't compare favorably to a PC or phone that can have FOSS replacements installed that actually increase performance.
From an outsider, it doesn't appear to me that Google is data driven, or at least they haven't ingrained it in their culture universally.
I can't imagine data lead them to believe they needed the 4 or 5 messaging apps they had at one point with the mix of hangouts, allo, duo, etc.
Amazon has taught me to go out of my way to buy directly from manufacturer or a reputable retailer that doesn't offer third party sellers on their website.
I don't want to save 10%, 20%, even 50% to risk any chance of getting some counterfeit crap. Hopefully, there will be sufficient customers like me to make it economical to offer quality, vetted goods at whatever price it takes. Sadly, I see even target.com now allows third party sellers.
I wouldn't care about third party sellers if the retailer explicitly mentioned they don't commingle and allowed me to restrict all of my searches to items procured, shipped, and sold directly by the retailer.
https://www.newegg.com/promotions/marketplace/sbn/doc/Agreem...
>We will not be required to physically mark or segregate Units from other inventory units (e.g., products with the same standard identification number) owned by us, our affiliates or third parties in the applicable fulfillment center(s).
Amazon has figured out how to appeal to the typical consumer and keep them real happy.
Exploiting workers, suppliers, distributors, the country it's founded in are some of they way they deliver that promise.
Jeff Bezos is not the monster here - he's just responding to market forces.
Until the fundamental consumer model changes, competing with Amazon is not very logical or effective. It might make people feel good, but not effective.
Market forces can make up for having a dysfunctional culture.
This is roughly analogous to the role of luck in personal success- people say “I must have done something right!” when in reality you have far less control than you imagine
But the core engineering stuff is high quality there. The build system that the whole company uses seems extremely well made. And I doubt that such a core thing can be done so well by a company with an overall poor engineering culture.
And the inverse seems to ring true as well. Even in large companies with overall poor engineering culture, you can find a few small pockets of teams that produce great small stuff. But they are fighting against the overall inefficiency of the company, while with Amazon, the opposite is happening, as poorly performing teams are being boosted by the core things (such as build systems) being done really well.
Are they big, small? What kinds of firepower could they compete with?
Just wondering about the efficacy for these companies of trying to compete against a behemoth like Amazon versus carving out their own niche or redefining their market.
I think there are real, deterministic reasons why Amazon is successful (other than its unscrupulous practices) but I'm not sure your comment adequately covers them. It's hard to make these determinations post hoc because they are not easily falsifiable.
* They ship super fast
* They sell almost everything at reasonable prices
* They have more user-provided content (reviews, photos) than anyone
At this stage, I could write a book about the idiocy of executives in tech.
Meh. I definitely know of teams that slack off for multiple years.
To think Amazon doesn't have internal politics doesn't sound too believable.
I think Amazon had a very good business strategy and that has foremost been expansion at any cost, extending reach even at a loss by having multiple revenue streams. They leveraged the tendency for convenience in a fast world where everyone works hard, not just at Amazon. Solid business strategy, but the factors about incentives sound exotic to me.
> Not just dismiss them as some relentless and heartless evil empire.
This sentence could be straight from the middle of the last century and probably the cradle of literature. I am sure you will find many comparable quotes.
<Some "relentless and heartless" decisions need to be made, John>.
The typical consumer does not care about "Made in U.S.A" vs "Made in China" vs "Made in Taiwan". They do care whether it's $9 vs $27.
The typical consumer does not care whether the workers were paid fair wages and given enough bathroom breaks so as not to urinate in a bottle to meet strict deadlines. They do care whether it's $9 vs $27.
The typical consumer does not care whether the IP of a company was stolen and cheap copies were made that were defective and buggy compared to the original product. They do care whether it's $9 vs $27.
If the $9 product does not work, they can buy 2 more to even break even or just return it and get something cheap instead.
Thus, Amazon has figured out how to appeal to the typical consumer.
Exploiting workers, suppliers, distributors, the country it's founded in are some of they way they deliver that promise.
Jeff Bezos is not the monster here - he's just responding to market forces.
Until the fundamental consumer model changes, competing with Amazon is not very logical or effective. It might make people feel good, but not effective.
Can the competition provide the same product at $9 while doing all the warm and fuzzy things?
That's the real question.
Market forces are not moral. You don't get a free pass on your actions because you made a bunch of money.
If society is to give out free passes for suboptimal behavior to anyone, it's going to be to those who provide it the most value. Kind of like Amazon does to a lot of people right now.
Societies organize themselves and collapse all the time--what exactly makes Amazon beneficial to the continuation of our own? It would be beneficial to think critically about what goes on inside.
Right on!
I don't understand why this is so hard to understand.
People might not care if they are knowingly buying a counterfeit item, but they certainly do care if they think they are getting a legitimate brand name item and then receive a different (especially inferior) product.
I personally would be very cautious if I saw a $1500 Gucci handbag on sale for $45 and expected it to be genuine.
Have I come across a $1500 Gucci handbag on sale for $45 and it was genuine? Yes, at an auction because a colleague of mine flips these as a side business.
Would this pricing be available retail? No.
If you're saying someone was sold a $1500 Gucci for $1500 and it turned out to be counterfeit - I feel for them.
Solution: Return it and file a chargeback if the seller does not take returns.
Problem # 1 is the cost of returning an item and chargebacks is very high. I (and hopefully many others) are willing to pay a premium to a vendor that performs quality checks on their vendors. It's the whole reason premium brands exist.
Problem # 2 is there exist many items which consumers are not able to easily determine the legitimacy of, for example USB wall outlet AC adapters or batteries and many other small consumer electronic items where inferior parts can be used but are indiscernible to most people.
If you've never seen the original, some knockoffs are very hard to tell apart from the genuine item. They won't perform as well or be as high quality, but if it's your first ever experience with the brand/item, you'll just assume that's what a widget from ACME inc feels like.
In that case, there is no way to tell and it is a lottery whether you get what you pay for or something subpar. It's not as obvious as the 1500$ Gucci bag for 45$ from the back of a pickup on the parking lot.
The other real question is "Will it continue to be legal for Amazon NOT to provide the warm and fuzzy things".
In virtually all other developed countries the answer is NO, but with legal bribery (unlimited campaign contributions & lobbying) the US may never change.
Wal-Mart won the retail game because it won the price war, like you said, but it held the keys to the kingdom for so long because it also enforced a minimum quality standard with suppliers.
Ebay used to be inexpensive and widely used until it was overrun with counterfeits and scams. Amazon is on the same path with it's lax counterfeit enforcement with suppliers and fake reviews.
Wal-Mart is nearly just as guilty of selling shoddy items as Amazon. Wal-Mart has struck deals with brands so that lesser-quality versions of popular products are shipped to Wal-Mart stores than to more upscale shops. These lower-quality versions are not clearly marked as such, and it is difficult for the average consumer to notice how the plastic molding is thinner and less durable – they will only find out when it breaks on them.
I'm not saying Wal-Mart is top tier quality. The point is that their product quality vetting with suppliers is still magnitudes more than what Amazon does.
I've bought a sofa set from Coleman, and supposedly I needed to measure the door, if the sofa can fix or not. Because of the shape of the hallway and entrance, the sleeper did not fix from door. And carrier guys did not want to push further. Luckily, my patio's door was large enough to fit. I've called Coleman and explained the situation, they demanded extra money from me, to deliver through patio's door, or they were gonna send it back, which I have to pay for shipment and 15% re-stocking fee.
I come from another country, this would never be an issue. No matter what, carrier would deliver inside my home (either through front or back, or patio's door, or window), and never ask for extra.
If I would have bought from Amazon, I'm sure that I could send back, or speak for another delivery option. This is why Amazon is winning, they are customer obsessed, they are there to help, even if they lose money.
I used to work for a relatively large bank that for years didn't even track what customers were calling our mega call centre about. It took them a long time to realize that 25% of calls were password resets because the button was hard to see. They had recently expanded the call centre and all over a hard to see button.
They are so customer obsessed that I can't trust the brand name AC adapter I purchase from them is made with quality materials from a trusted brand, or if it's a counterfeit sent to their warehouses and commingled with all of the other inventory.
And they're so customer focused that they removed the option to restrict product searches to only show "shipped and sold by Amazon.com".
The only thing their actions show me is that they're obsessed with higher profit margins, which can't be obtained by providing traditional retail services. They can achieve higher profit margins by simply being a platform and collecting a commission of all the transactions.
Apple is customer obsessed. Amazon is efficiency obsessed.
What product issue is not solved by a refund or replacement?
A podcast from "the university of Flanders" (which is more than one university, but alas) talked about this and that free shipping offers are ways to bind customers but that it's typically not actually viable with current profit margins and just an attempt to squeeze others out of the market.
I got nothing in the end and wasted damn time with customer support + money stuck twice... since refunds take time to appear.
If I go to amazon.se I end up at amazon.de There is no same day delivery of household products (like toilet paper). If I want a book I need to go to an online bookstore.
Why this is I’m not sure. But it’s interesting.
I'm trying to avoid it but between my poor German and few web shops catering to the tiny non-Amazon-going audience, it's hard.
I don’t need Amazon for books or computers but I envy those who can get a cable for $5 with shipping in a few hours when in a pickle. In that situation I have to go to the physical store.
No Amazon would mean I’d have to use comparison sites, make a bunch of accounts on different websites, pay for shipping each time, and make more orders in total. I’m beyond happy that Amazon.de works perfectly for Poland. I see almost no upside to the alternative.
To me the idea for ordering toilet paper online is a bit foreign. In order to collect the package, I would have to go to my local store, where they already sell toilet paper.
Ultimately, I think that the small market size, taxes and staffing costs are why lots of international brands - Amazon included - skip Sweden as a market or fail to make an impact after many years.
Maybe Amazon will just fall on its own at some point.
All the news articles about worker safety are about Amazon, but in my local grocery store chains, I see a total lack of masks and social distancing by workers.
This is entry level domain material for anyone involved in sales: https://m.youtube.com/watch?v=Q4PE2hSqVnk
The news that Amazon has also abused sellers on their platform should shock nobody. As soon as they got into selling house brands, the writing was on the wall. Ironically, I can actually trust Amazon's house brands to at least be legitimate, non-fake products even if they do tend to be cheaply made.
I really like the Shopify model, as they (currently) don’t compete with their customers unlike Amazon. I was rather surprised that I didn’t see more Shopify stores at some of the sites that I bought things from recently. My one recent example (a ski movement analysis sensor called Carv) was incredible - one click checkout using Apple Pay without having to enter anything to order. I’m hopeful that we can get a credible competitor to Amazon for independent manufacturers in the near future.
Personally, this is the issue with the largest effect on my willingness to try other e-commerce sites. When 1-2 day shipping becomes normal, it's hard to want to shop somewhere else like eBay when shipping times are usually in the 1-2+ week time frame. So when Amazon started telling me it would be 3-4 weeks before I got what I ordered (because apparently their definition of essential doesn't overlap completely with my own), I started looking other places.
Also - the long tail exists almost exclusively on Amazon.
Despite its problems, it's still for sure the best shopping experience online overall for me, as much as I hate that to be true
Shopify is cool for that: enables a ton of tiny online businesses to thrive
1. Easy to access - I just need to type the item I want in browser address bar 2. I feel Google is relatively quicker at returning result - couple hundred millisecond that I can feel 3. I usually do find what I need in Google result
(as mentioned on linked page)
https://twitter.com/CaseyNewton/status/1254875738425012224/p...
People tend to deride WordPress source code on a technical level, but they forget about it and the ecosystem's importance as _free_, GPL tools that power over 1/4 of the web. Google is swinging its full weight into undermining this ecosystem so that it can turn WordPress.org source code into more ad real estate.