What “Amazon Supply Chain Services” tells us about what Amazon is
gadallon.substack.com
gadallon.substack.com
I used to be a big user of Amazon prime, but they recently swapped over to logistics for my rural area which has no cell service and huge distances between houses and that apparently means they can’t deliver. They try and packages sit at the local warehouse for a couple of weeks before being sent back to Amazon.
Originally, some drivers would be foolish enough to try to come up here without cell, but by and large, they were unable to find the property- mainly because the house is not visible from the road, even if the mailbox is on the road, and mapping apps do a bad job. So I’m assuming the drivers don’t get paid or in some other way get punished and this means that a bunch of Christmas presents didn’t show up, and we stopped using Amazon entirely.
Since that we’ve already had a problem with one vendor we purchased from directly that tried to send something to us via Amazon logistics, and it got returned to them. This was not mentioned on the webpage, and when we contacted them, they got really angry with us for giving them an “undeliverable address” – they literally did not want to give us a refund. They really didn’t like: It’s deliverable by USPS, UPS, and FedEx as a response. But eventually, we got a refund.
I’m assuming this is going to be my future more and more now.
I can get Amazon logistics to deliver where I live, but it's pretty unreliable. Usually delayed, or it doesn't arrive until 8pm and given how Amazon treats their drivers, I hate being part of that problem no one should have to be out making home deliveries that late.
I'd much prefer if they just kept using USPS. Public service and reliable, and usually here by noon.
After putting in step-by-step instructions, it's been much less of an issue.
However, even after my third revision of the notes – to just remove them entirely – deliveries didn’t pick up again, so I don’t know. It’s opaque to me.
Build infrastructure to serve internal operations at a scale no rational external buyer would justify. Optimize it to a level that drives marginal cost below the buyer’s internal alternative. When the surplus capacity is too large to write off, open the API and sell it.
Forgot the last part: when you have eliminated all the competition and have all your customers locked in with no other options, raise the price.
We need to get back to preventing (or breaking up) monopolies.
The issue is that AWS is embedded in many governments and there is no appetite to do anything about it.
If a country started proceedings against AWS they'd risk their country infrastructure going down, so it is a no go.
I wonder why this has not been considered as national security risk and frankly negligence.
Aws marginal cost is below the internal production price of the buyer
This is exactly what we want our tax structure to incentivise. Investing in the future for growth and cheaper goods.
While I agree we want to incentivize investing in future capacity, I don't think we intend that incentive to be used to create monopolies. As with many things, what's good at small scales can be bad at huge scales.
It is unclear what is bad about it, as long as they provide a better or cheaper product than the competitor.
If they are ilegally preventing competition, then regulatory action should be swift. Otherwise, it is a win-win and the consumer is getting a better product than others could provide. This is the classic walmart scenario.
AND don't forget to degrade services as well
break up Apple, Meta, MSFT, etc... while we're at it.
Or, keep it simpler - if a company passes a market cap of 1 trillion dollars, they must forgo lobbying and "government relations". if you're worth a trillion dollars or more, you don't need the government to hold your hand.
Government influence primarily consistes of sharing information with votes passing flyers on the street or running adds.
When framed this way, I dont think most people would agree that groups should be prevented from getting their message out.
Coops, unions, guilds, non-profit societies, knitting circles, meetups, etc. are all non-corporations.
> Government influence primarily consistes of sharing information with votes passing flyers on the street or running adds.
Lobbying, and superpacs are not about getting a message out - they are about spending money on ads to buy votes. That’s different from advocating for your hobby or interest.
Not to mention the asymmetry. If 20,000 grain farmers want to lobby about wheat by spending $10 each, that’s different from one man spending the same $200,000k on getting a candidate in. Or millions - e.g. elon, etc last election.
That said, we could also ban informal groups from political speech.
How are these things different, getting the message out versus buying votes? Also where do I go to collect my vote payments? Getting the message out usually cost money. If you like some but not others, is it the content of the messaage you find disagreeable?
Money is not speech. Speech is free, everybody can speak. Money lets some people amplify their speech proportional to how rich they are. Thus the rich get richer and democracy goes hungry.
> How are these things different, getting the message out versus buying votes
“Grain is good” getting your message out.
“Vote for jeff, a message from big grain” buying votes
You could talk to your neighbor but not donate or collaborate.
E.g. Spending limits. Each person can spend up to $2000 on political speech. Individually or as part of a group, company, whatever. After that, all you’ve got is your time - go knock on doors.
Sure, $2000 is nothing to a jeff bezos, and too much to someone making $18k/year - but it levels the field so that jeffy, or the nra, or aipac, or oil and gas can’t throw their weight around in the way they do now.
There are other ways, that’d just be a return to how things were pre-citizens united
That said, I think it's a position that someone could take that they'll political speech should be limited when it involves money, provided they are honest about it.
I do think it would give more power to those who owned the megaphones, but maybe that's worth it.
That said, I don't think that pac spending are that big of a problem. The bigger problem is lobbying, aka the sharing of thoughts and ideas with politicians to educate them and inform their positions.
Speech is free, as in part of freedom, so speech should not be regulated by the government.
Spending money to amplify speech is not a right or a freedom, it should be heavily regulated.
> That said, I don't think that pac spending are that big of a problem
Look at aipac, there are only a handful of politicians who don’t take their money (or how every you want to phrase pac money being spent on you “independently”). And yet something like 60% of americans have an unfavorable view of israel. If those politicans taking aipac money take the wrong position on israel, that money disappears, and goes to an opponent of theirs. That’s just lobbying. Pac money is lobbying.
Sure, most people would agree that the various kinds of corporations formed for the purpose of doing something other than making money should be able to play a political role.
But I do not believe that most people would agree that corporations formed for the explicit and (generally) sole purpose of making money should have this ability.
https://issueone.org/press/new-polling-citizens-united-money...
The law and the majority don’t agree way more often than one would expect in a democratic society.
Corporations might be "people" but they aren't citizens. Especially if they participate in shenanigans designed to "minimize" their tax exposure that involve shell corporations in other countries.
well at least they're not hiding it
There's a difference between a few people getting together and petitioning the government for redress; versus, a multitrillion dollar corporation (that pays little to no tax, and is the recipient of very generous government contracts) buying its way to the front of the line and whining until it gets its way.
In citizens united, the government’s position was that, under their interpretation of the law, the government had the authority to prohibit a corporation or a non-profit organization of any size from publishing a book or pamphlets if they had political implications.
Where would you draw the line? what does "buying its way to the front of the line and whining until it gets its way" mean in practice?
No it's not, the definition of a monopoly is a seller without any competitors. Stop spreading lies. Amazon has plenty of competitors for what it sells, but it has a large market share because its products and services are generally cheapest.
In Germany, the Federal Cartel Office fined Amazon[^2] 59 million euro (68.7 millions US dollars) because of "abuse of market power" with anti-competitive practices.
The European Commission[^3] also opened an investigation regarding Amazon's practices regarding Prime and the "Buy Box" (I had to look this up, apparently it means being picked as the default seller for a product where multiple sellers are offering it), since you need to pay extra for FBA to have your products marked as Prime (appearing before on the search results, and being the "buy box") and Amazon itself competes with you sometimes, being both a marketplace and a seller.
[1]: https://www.ftc.gov/news-events/news/press-releases/2023/09/... [2]: https://www.politico.eu/article/german-regulator-fines-amazo... [3]: https://ec.europa.eu/commission/presscorner/detail/en/ip_20_...
So the question is whether you read this to be inspired by it and attempt to create your own monopoly, or to be afraid of it and start thinking about regulation. Or both :-)
Yet others with Amazon’s scale have tried and failed at this sort of horizontal integration.
How?
> In 2006, Amazon launched what is now AWS, exposing the internal compute, storage, and database services its retail group had built. The internal pitch was identical to Marketplace seven years earlier.
These were not internal services, and it wasn't exactly the retail group that built them (Chris and Ben were dedicated to EC2 and the team ran remote from Seattle). Nor was Marketplace run on the 1P Amazon platform, so it would have been a strange analogy to use for a pitch.
In the end, though, the point is the same as I made elsewhere in the thread — once you are big enough you can try and bootstrap pretty much anything adjacent to your business and have a good shot at success.
AWS was inspired by certain engineering concepts developed inside Amazon but was launched largely as a greenfield new thing.
Amazon itself is not even “all in” on AWS despite encouraging its customers to do so.
Logistics = Getting stuff to your door super fast… Amazing, nobody is better.
Other stuff = An app and website that doesn’t suck and lets you find what you want amidst a sea of junk. Not great here.
Infrastructure = AWS core services which are quite good.
Other stuff = Nearly everything AWS tries to do on top of base commodity infrastructure, which is a hot mess.
Other stuff = Alexa, which is a has-been also-ran now that’s struggling to compete in the GenAI era. Rando also-ran businesses like Amazon Music. Various sports things that seem to be more Andy Jassy’s pet projects than anything. Physical retail with some keeping the lights on via Whole Foods but nearly everything else here has been shut down as a failure.
It is probably not too late for a state-driven type of service layer like this from some rationally led government somewhere in the world.
We call it the postal service.
More seriously, it's somewhat mind-boggling that Amazon is allowed to keep it's "everything store" business, it's logistics business, and it's internet business all under one roof. The P&G discussion here highlights how insane it is that this isn't being investigated and prosecuted.
it's a volume game to provide a service.
The dig in the middle - "you can skip the next part, but if you do skip, are you even a real reader? Not judging. Just saying" - ugh. Why would I bother reading every word if you likely didn't write every word?