It's a pretty common theory that their retail division is just around the corner from reaping massive economies of scale. But they just had one of the biggest retail years ever had by a company in history and might have lost money overall.
Also last year was expensive for logistics, very expensive in part due to the supply chain bottlenecks and delays and using alternative shipping like flying more than ships etc. However prices for shipping on Amazon has not really gone up that much, the lack of profitability may reflect that as well.
Advertising, by its nature, derives it's value from the sale of other goods.
It should be concerning that more and more companies, major household names, make their money off of advertising. It fundamentally doesn't make sense.
How much of advertising revenue comes from companies that themselves ultimately don't make a profit? So much of our current economy is an illusion created by shuffling around huge amounts of investor capital to make it look like there is money flowing everywhere.
Turns out that advertising is inherently more scarce than consumer goods; while you can manufacture as many consumer goods as the market will absorb, you cannot just manufacture more human attention. Instead you must compete for the limited pool of attention that already exists, and established players like Google and Facebook control vast amounts of attention without much effort.
This supports a huge differential between the "cost" of serving an ad and its market value, whereas if you're charging $500 for a toaster somebody else will be selling them for $400 by the end of the month.
As for the huge sums of money: it's just a cost of doing business. As long as the manufacturers have still have nonzero profit margins, and as long as advertising delivers as much value as it costs, it's a stable equilibrium.
Damodaran keeps a table of industries by net margin:
https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile...
You could say the same thing with about every other expense of running a business.
So, big advertisers like Google and FB make money off almost ANY company that becomes successful trough ads. The funny thing is: If there are competitors then google or FB is making even more money, because they are all bidding for the add-spot. And google is walking away with the money. And, yeah, some companies lose money to try to push the competitors out of market. Through ads.
e.g. Any television channel (e.g. BBC, CNN, ESPN, MSNBC, SiFi), any newspaper/magazine (NYT, Life, etc), all of radio, every storefront and its flyers (e.g. Safeway, Wallgreens, Costco).
These are all directly or indirectly advertising companies that have been household names for the last 100+ years.
The only difference now is (unlike for billboards), digital real-estate is very cheap and can be owned by a single conglomerate, rather than a decentralized group of capital holders.
I don't miss it at all. I do miss the amazon of 10 years ago though.
Why? What about it do you miss?
The "2 day guarantee" doesn't really exist anymore, so I have to ask - what am I paying for?
For me, I go without, and I only buy things with free shipping, so having Prime would not save me money; it would cost me money.
(I also buy less things when I do not have Prime, so that saves me additional money!)
Added bonus is I found myself impulsively ordering less useless crap since it requires more thought to order and isn't delivered immediately.
I buy all sorts of one day/same day items that I would need to go to a store for otherwise (virtually anything that isn’t fresh food that you might want same day like toothpaste or soap or bandages), so I could never give it up.
Though I do have a pharmacy in walking distance so it's not much effort for me.
Just earlier today, I was looking to buy some isopropyl alcohol spray. There was one that was listed as "Get by Sun Feb 6". Out of curiosity, I applied that filter.
Now that item had disappeared. And a much smaller list of items where none of them were actually available tomorrow, and in fact, most were a week slower than the first I found.
The faster delivery is a nice bonus, but I have prime for the live tennis content mainly.
(Personally I keep Prime mostly for Prime Video, and a few other perks. I typically only buy a few things from Amazon each month, so the free fast shipping is a bonus for me, not a must-have).
So the statement you challenged makes perfect sense.
Their point was you might have erroneously assumed you had to make a decision now.
"Paid members who haven't used their benefits are eligible for a full refund of the current membership period. We'll process the refund in three to five business days."
https://www.amazon.com/gp/help/customer/display.html?nodeId=...
I have received a pro-rated refund when I cancelled in the past.
1. To profit they'd have to slow down investments in improvements to logistics, and they didn't. It doesn't seem like the year to do it? 2. Increased labor costs.
You can't figure this stuff out from first principles; you have to look at what they're doing.