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Comment by coldtea | Hacker News Reader

>I'm amazed by Amazon

I, on the other hand, am underwhelmed.

Their AWS services is a pretty cool tech and business.

But as for their other stuff:

1) Their core business (the store) barely makes any profit. Their profit margins are razor-thin, and until recently operated at a loss IIRC.

2) Their ebooks and music store are ho-hum.

3) Their hardwares, Kindles (Fire and plain) are simply loss leaders for content sales. Which (1) is not that profitable in itself anyway. Not that difficult to sell stuff like readers and tablets at a cost or slight loss.

Anything else I forget about?

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That's the genius though. They are the ultimate Walmart, and that is one of the best things to be. Even better, they are Walmart with the option to expand into anything, because they don't have the stigma of being cheap. They can sell luxury goods (at small margins), highly complex technical solutions (at small margins) etc etc. What Amazon have managed to do is essentially to brand a bunch of things that were highly commoditized before. The potential in that is amazing, and almost scary.

Amazon MWS, their horrible piece of an API. If I were to give someone an example of a bad API it would be Amazon MWS, because it has everything:

-XML only (which is often strucured in the most obscure ways, and inconsistent through the API)

-shared reqeust throttling across all authorized applications (which turns the API from "barely useful" to "I can be lucky if I get a valid response")

-inconsistent across all marketplaces (of course I can't use the "fullfilmentLatency" attribute on the US-marketplace like in the rest of the world)

-unreliable (yeah Amazon, just ignore the list of prices I just sent you and mark them as processed, I am used to it)

That and many more things(e.g. hiding competitors in the responses) makes the API so useless that many people resort to just scraping the Amazon pages. An API that is so bad that nobody uses it is almost as bad as none at all.

I'm sorry, I didn't mean to rage but seeing that Amazon treats 3rd party developers and merchants like shit while doing everything to make the customers happy always makes my blood boil.

The Kindle e-readers are excellent products in their own right. With the Paperwhite they've perfected the category IMO. The software -- e.g., the Xray feature, and the overall gesture UI -- and the hardware are equally good.

> 1) Their core business (the store) barely makes any profit. Their profit margins are razor-thin, and until recently operated at a loss IIRC.

The choose to do this. I read an excellent article on it some months back but can't find it again, but suffice it to say there is far more to their low margins than you think.

Yes - the general idea is they could monetize their business to get profits now, at the expense of future growth later. They write to their shareholders to be patient, so it's transparent.

I think all that things are considered investment in the future by Bezos. Amazon will probably eclipse Apple, Microsoft, Google etc in 5-10 years.

Or it will be the same as it is now -- because I don't think there's any magical path to make a low-margin, comoditized, operating at almost break even business in a highly profitable one.

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