Comment by cortesoft | Hacker News Reader

Comment by cortesoft | Hacker News Reader

Parent Full thread

Man, I remember when Amazon Prime first started, I signed up for the free trial to get free shipping on something. Of course, I forgot about it and didn’t cancel, but then I got an email from Amazon saying, “hey, you didn’t cancel your prime subscription but you also haven’t used it at all, so we are going to not charge you and cancel it for now. Here is how you easily restart your subscription if you end up needing it”

It was such a wonderful feeling that clearly impacted me so much I remember it some 20 years later. I gained SO MUCH loyalty to Amazon after that, and sure enough, I restarted my prime subscription a bit later when I got a better job and started ordering more stuff. They made so much more money off me because they sacrificed those few dollars for one month of my subscription fee to show me they weren’t just trying to make me forget to cancel.

Amazon today would never do that, of course, but man I think more companies should if they want long term, loyal, customers.

Early Amazon was pro-customer in a way that I think most people have forgotten. Maybe that was always the strategy? They were losing money for years, and maybe that was investing in the company, or maybe it was allowing really large losses to keep customers happy, planning all along to eventually clamp down when people were addicted. And here we are.

Their return rate is still pretty terrible, IIRC. I bet they are trying to cut that down. I still see a lot (and I mean a LOT) of obvious Amazon returns in the line at the UPS store, and some of them are quite egregious (I stood behind a lady for 5 solid minutes a couple weeks ago and she was pulling return after return out of a big bag). Maybe Amazon will start firing those customers.

The way Amazon was "losing money" in the early years was all intense reinvestment though so they could at any point pretty easily tune their profit making by turning down the ridiculous amount of warehouses they were building for one example.

I think it's more a matter of companies just having different focuses. If you're wondering how to grow your userbase, you're thinking fundamentally differently than if you have an established one and are wondering how to monetize them.

Or maybe it's all one cycle with different phases? Not saying you did this, but is this a technique one uses to distract or diffuse a critical attack - break a system into parts and claim the parts are unconnected? Anyways to the above, e.g. spider spins it's web, attracts the prey, mummifies, etc.

Sure, I didn't mean to imply that it's unconnected, just that they're at different places. You're right that it's almost certainly just parts of one common cycle.

> Early Amazon was pro-customer in a way that I think most people have forgotten.

I think this is why I'm still such a loyal customer, and use Amazon for so many purchases. Intellectually I know that Amazon does super crappy things, both to their workers and around their website and sales. But I've been a Prime member since it was first offered, nearly 20 years now, and I still fondly remember when Amazon's customer service was pretty much better than anyone else's out there. It was actually delightful to interact with their customer service, which was (and is) so rare.

Interestingly, I actually still have only had great experiences with Amazon customer service. I have a feeling that is entirely due to how much my family continues to spend with them, though. It is pretty well known that their customer service response to things varies with how much your spend.

The customer service is a margins game, and you are correct that they ratio spend to returns to track those margins per account.

The service degradation is in terms of search no longer being useful, promoted/ad brands everywhere, popup 'businesses' with co-mingled inventory, fake reviews, just general lack of trust earning. Amazon used to be THE place to get the cheapest option too, but that is rarely the case these days.

> Early Amazon was pro-customer in a way that I think most people have forgotten. Maybe that was always the strategy? They were losing money for years, and maybe that was investing in the company, or maybe it was allowing really large losses to keep customers happy, planning all along to eventually clamp down when people were addicted. And here we are.

Yup. This is the playbook of the Enshittification[1] process as coined by Cory Doctorow.

> Here is how platforms die: first, they are good to their users; then they abuse their users to make things better for their business customers; finally, they abuse those business customers to claw back all the value for themselves. Then, they die. I call this enshittification, and it is a seemingly inevitable consequence arising from the combination of the ease of changing how a platform allocates value, combined with the nature of a "two-sided market", where a platform sits between buyers and sellers, hold each hostage to the other, raking off an ever-larger share of the value that passes between them.

[1] https://en.wikipedia.org/wiki/Enshittification

It's part of the leadership principles at amazon. "Earns Trust" is a strong guideline, with the saying that trust is hard earned and easily lost.

> Maybe Amazon will start firing those customers.

But does this actually hurt Amazon in any significant way, or do they simply externalize this cost by penalizing the original seller?

Egregious? The policy is literally "free returns". In my experience, they could cut it down a lot by not constantly playing pricing games and also getting rid of their slow spiteful shipping. Like if I'm in the market for a type of thing, and they have one of their sale days where two or three options are all 30% off, I'll order a few options and then decide later. Or if I'm in the middle of project I'll order extra parts that I merely might need so that I don't get interrupted waiting for another shipping round (especially if I don't currently have a "trial" of their sunk cost fallacy program). If I already have to do an Amazon return sometime, then taking more items is basically free. I know their system is wasteful as fuck, but that's on them for setting up such terrible policies. I'm certainly not going to validate the business model of letting companies cheat customers based on making us feel bad about how much they waste. (all the repeatedly damaged items from Target having no clue how how to pack items is another example that spelled out this larger dynamic for me. at least Target lets you keep the salvage much of the time)

Back when people were suspicious of buying things online, Amazon used to set a percentage in the low double digits, of revenue they assumed would be lost to refunds.

That allowed an amazing customer service experience, and immense trust: if there was an issue with your order that couldn’t be easily fixed, then we’re very sorry, and here’s your money back.

Both that program and the incentive for it are long gone.

This is textbook enshitification: Initially, vendors create high-quality offerings to attract users, then they degrade those offerings to better serve business customers, and finally degrade their services to users and business customers to maximize profits for shareholders. (https://en.wikipedia.org/wiki/Enshittification)

Reddit is following the same pattern. Entice everyone over from digg, make users happy and grow base, appeal to businesses, then squeeze the business (API changes). Chrome used to be the faster, cleaner, more 'techie' option, and they too have departed from Day1 and moved into the squeeze.

> Maybe that was always the strategy?

Can confirm that was the strategy from day minus-three.

Of course that’s the strategy. It’s called enshitifcation. Cory Doctorow coined the term and has many cool examples like this in his related speeches and blog posts.

Today's Amazon is doing it's very best to get rid of customers like you and me! Not at all a fan of what it has evolved into!

Amazon today won't even remind you that they are about to charge your card $150ish for an annual renewal, unless you specifically opt-in.

They still remind you automatically. I just got one.

I got mine two days ago, with no reminder. When I went in to the Account page, the "Notify me by email 3 days prior to renewal" was unchecked. While possible, I can't imagine a scenario where I'd have ever knowingly unchecked that.

I’m pretty sure that I receive emails before my prime subscription is up for the year each time “renewal notice”

Would you have that email from Amazon? That sounds interesting!!

How are long term, loyal customers going to provide the short term profits which are needed to goose executive bonuses?

Reply on news.ycombinator.com