Amazon Prime membership has gone from 41 million subscribers in March of 2015 to 85 million subscribers in June of 2017. Subscribers pay a single price for a year of free expedited shipping.
Amazon understandably does not want to pay Federal Express or UPS so it opted to build its own air fleet.
For the first time, Amazon Prime Air Cargo Planes Are Ready For Takeoff.
FedEx Corporation and United Parcel Service, Inc. are not alone anymore, Amazon.com’s Prime Air cargo jets are ready for takeoff.
On Friday, Amazon unveiled the first Boeing 767 of its new fleet of branded cargo planes at Seattle’s Seafair Air Show. Its first-ever branded cargo plane, the Amazon One, is a Boeing 767-300 operated by cargo service provider Atlas Air.
This is one of 40 planes Amazon has agreed to lease from Atlas Air and another partner, ATSG.
Prime Customer Growth
Amazon One
Amazon Prime Question
We are Amazon Prime members. It certainly has changed the way and frequency we shop.
Delivery charges on small orders without Prime can cost as much as the item. It would never occur to us to order a standalone item like toothpaste prior to Prime. Now, why not?
Second, there is no need to be at all careful. Instead of ordering bunches of things at the same time to cut down delivery charges, we order something when we think about it. A day or even hours later we may order something else.
I suspect Amazon is losing money on us, but perhaps they make it up on some more expensive photo equipment and lights I have ordered. It pays to be careful on such items. Sometimes there are far cheaper places than Amazon. On any big ticket item, please shop around.
Generally, I order photo equipment from B&H unless they do not have in stock or do not carry a specialized item I want. As a matter of disclosure, I have an affiliate relationship with both B&H and Amazon.
As a side note, if you have not yet checked out my photography website, MishMoments, please do so.
Mike “Mish” Shedlock
I’ve been a prime member for years. Free amazon video alone is worth the cost. I also use their free music service. For things like toothpaste they have a thing called amazon pantry. You have to fill a box to get free shipping.
Totally agree, Man in the High Castle and others for free, on top of the value on deliveries.
If you shop on Amazon frequently, it is probably a good deal. But I got tired of the limited movie selection. Otherwise, get yourself an Amazon TV Firestick (not on sale today) and learn about kodi and related programs.
I’ve never downloaded music or videos, and if fact, don’t know how to do it, so those “added values” are of no value to me. As for the shipping, I always take the free shipping anyway. What many people don’t know is that they estimate far longer than it will really take in order to encourage people to pay extra for faster shipping (or to join Prime). For example, recently I ordered 5 boxes of paper on a Wednesday. The next day I got an email saying that my paper should arrive between the following Thursday, and the Thursday after that (i.e. between 1 and 2 weeks after my order). The paper arrived, as I expected, on Friday, the second day after I ordered it.
Don’t forget the music and video services included with Prime also.
its funny that some people feel compelled to advertise and even defend a company they don’t work for…. or did you forget to disclose your relationship as our blog host did?
How much does amazon pay you to advertise / promote their product for them? Would you write copy for other vendors for zero compensation?
Do you expect your employer to pay you to work for them, while you do moonlight for Amazon for free?
So you never tell your friends about a good value? You sound quite bitter at the world, why? Did amazon fire you or something to make you feel this way?
I use amazon. That is my affiliation. It saves me money (after vetting the options) and provides the bonus of included entertainment. That is the extent of my relationship.
Now if you are done being abrasive, I accept your appology. 😛
I tell my friends about a sale price, but I don’t go online and advertise to complete strangers or post spam on someone else’s blog.
I guess you feel dumb working for free, but what happens when your employer finds out?? Do you even have a job? (collecting welfare is not a job, nor is whining from campus)
Why should your employer pay you, when you work for Amazon for free?
I own my company, and am my own employer. You?
same, but I don’t give my services away for free to the richest man in the country.
And BTW, Bezos isn’t working for you for free either.
I try to avoid buying things though Amazon since I do not like the owner. But if I can buy something from Amazon and Bezos loses money on it, great!
I hear you.
Currently, on several items each week, I find local “bricks and mortar” stores, or Ebay sellers, have much lower prices. We’re talking 1/2, 1/3 or even 1/10 of the cost Amazon is charging.
If I do purchase on Amazon, then about 19 times out of 20 purchases, it is from the “affiliated” private business people I buy from – or the Goodwill stores represented on Amazon.
FYI
“Food stamp funding for Jeff Bezos”
“If Amazon.com closes its deal with Whole Foods Market, the high-end grocery store for which CEO Jeff Bezos has announced a bid, the e-commerce giant would be set to increase its access to taxpayer money — potentially channeling billions in federal funding to the world’s second-richest man.”
http://www.rawstory.com/2017/06/food-stamp-funding-for-jeff-bezos/
I think it is important that we NEVER consider our local economies and jobs. I mean why should we? We have a government that will print to support our economy of bargains. We have banks that will loan to infinity so we can afford our bargains, and for all those who lose their jobs to benevolent heroes like Bezos, we have more than ample social services and entitlements to fall back on.
People are idiots to worry about consequence of our actions as we have been assured that those actions are completely understandable and part of our “rights” of subsidized self destruction.
What makes Amazon so special is their access to unlimited funds, much like Tesla, where their “technology” makes them immune from normal constraints endured by most companies….something called PROFITS. This fact they they by all comparisons demonstrate this apparent bullet proof mantle, makes then part of the “can’t lose” casino conglomerate.
Profits don’t matter.
Jobs don’t matter.
Reality doesn’t matter.
What, me worry???
The economy in the entire Northeast is booming now. The Northeast (New England & the NYC area) has seen the best job & income growth in history since 2010.. Not sure where you live but every town in Massachusetts & Connecticut (along with the NYC metropolitan area which includes Fairfield County CT) seems to be doing great with new homes being constructed, luxury apartments that charge $2900 a month in rent for the cheapest one bedroom…
I have never seen the entire NYC area (you know the 4 boros outside of Manhattan where 80% of the population of NYC lives) doing as well as it is. Rents and home prices are rising by 10% a year at least despite a record amount of new supply and permits in the pipeline hitting the market
also even upstate NY has made a dramatic comeback in the past few years. Cities like Rochester, Buffalo & Syracuse has seen a dramatic change with many tech startups and new manufacturing facilities that have opened up. Gov Andrew Cuomo even got Elon Musk to build a Tesla manufacturing plant in buffalo
mad – they are all idiots who will end up with absolutely nothing.
Didn’t Amazon just give away its Prime Membership for almost free to food stamp recipients last month or so? Makes that 85 million mark totally UN-impressive.
How many know that Amazon prices the same goods differently for different shoppers? (At least that is what they supposedly have done in the past. So always clear your cookies if you’ve looked at something on Amazon and then decide to actually “buy” from them is the advice I’ve been given.)
Kidhorn says he likes the free videos on Amazon’s Prime Membership. However, for me no free videos appear in months and months of use. Does Amazon practice “price discrimination” as the marketers label it?
“Kidhorn says he likes the free videos on Amazon’s Prime Membership. However, for me no free videos appear in months and months of use. Does Amazon practice “price discrimination” as the marketers label it?”
You do realize he’s referring to free -streaming- videos, right? There are a huge number of them. I just watched a movie the other day that someone on-line said was good and it was free for Prime members.
Yes, and that’s a correct statement for me.
Amazon has one price for college students (you must have a dot-edu email).
They have a second price for welfare recipients
And they have a third price for the general public.
If other stores practiced price discrimination, they would get sued.
Remember when Amazon assumed they didn’t have to collect sales tax? Wonder how long before an underemployed lawyer sues Amazon for price discrimination.
Sounds just like all the Health Care providers in the country. They seem to get away with it.
Does your employer know you are an anti-amazon activist on their time? Do you write copy against other companies for free also?
Why do you know so much to communicate how amazon does business and vocalize it on the web in a negative manner for no compensation?
That coin has 2 sides, no?
Back atcha Xman. 😉
Good day》
I don’t like corporate welfare cases.
Amazon and Tesla exist because they get billions in subsidies that competitors do not. Central economic planners picking winners (and subsidizing them), while taxing less politically connected businesses, is bad for the economy and jobs.
I am not an evil socialist, so I speak up about underhanded, backdoor taxpayer subsidies.
I agree with you 100%
The bailout of the auto industry was a pet peeve of mine also. How many billions did we taxpayers spend on that only to see huge amounts go directly to the unions. Tesla is a prime example of a company that doesn’t exist without subsidies. Think of it. Tesla has nearly the market cap of GM and only produces a small fraction of the vehicles.
There’s a bunch of corporate welfare out there and they seem to have one common connection – the CIA. Zuckerberg, Bezos, and Musk are their favorite dancing boys.
Signed in just to up vote you. We’ve drastically curtailed our previously substantial purchases from Bezos during the past year. Amazon no longer delivers to our house since we’ve tried the free Prime trial, but declined paid membership. Almost all orders wind up at the Post Office. Besides, why feed this Krony Socialist, especially with the almost free po folk membership and buying the AmazonPost to promote propaganda.
Ok, let me get this right.
We need to sue:
– Lowes for the 10% military discount
– McDonald’s for their senior coffee prices
– Microsoft for their student prices for MS office
– AAA for the discounts they get on ticket prices
That a good start?
Just ask yourself what the AARP would say if millenials, who are buried in student debt, got a discount and seniors were charged full price. Would that be considered age discrimination? Just because the elderly used to be a small group (and got away with discriminating against young people) does not mean the practice will hold up once baby boomers retire.
Same with the other examples. Charging different prices to different groups is discriminatory. Just because it wasn’t enforced in the recent past doesn’t mean it will continue.
Socialism causes economic suffering, and the baby boomers will not be spared
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Almost every day we see articles about how Amazon is buying this or that company or expanding into another business sector. Amazon’s recent announcement they were purchasing Whole Foods got me thinking their engulf and devour strategy will eventually max out then come back to haunt them by generating a backlash and scorn.
I deal with small businesses on a day to day basis and will tell you they face many challenges and that they are very important to our communities, society, and the economy. This is why “Small business failures should receive a lot more attention than they do.” Never forget that Small business is the largest job creator in America, more in the article below;
http://brucewilds.blogspot.com/2017/07/amazons-engulf-and-devour-strategy.html
Best thing about Amazon (other than the free shipping and millions of items to choose from)? The comments and ratings on virtually anything you want to consider buying. In reading the ratings from prior buyers, if there are several 1’s, I start with those first, since the person making the comment may have found a problem with the product that is a deal-killer for me. Or the seller of that item was not helpful in replacing it if there was a manufacturing defect.
Over the past several months I have completely re-outfitted my backpacking equipment and the ratings section on Amazon, and a few other specialist sites, has been instrumental in not only avoiding major mistakes in backpacks, tents, sleeping bags, etc. but has led to opportunities to save money. Comments are particularly helpful regarding sizing on items like clothing, as there seems to be no real world-wide “standard” as to what the letters “L and XL” really mean.
I might end up buying from another website, but I always go to Amazon to read the ratings before making any major purchase. It saves time, money and headaches. But, I am also the type of guy who sits down and reads the entire book of directions before actually ever touching any item that has a bit of technology or complexity to it. My wife, not so much. I keep my tools handy.
If you’re a long time Amazon customer (about 20 years here) then you know how Amazon has played around with those “customer” reviews you can see.
Bologna.
I’ve posted damning, technically detailed reviews on a number of items that were complete junk like, for example, virtually every lithium ion cell, cell phone or camera battery you will find on Amazon (or eBay) because Chinese counterfeiting and mAh capacity fraud is so rampant in that category. I have the ability to actually test the cells and batteries I buy on Amazon (and eBay) and I’ve yet to find one that is even half it’s claimed capacity rating. As a matter of fact, I don’t usually bother to review something unless it’s a super great deal or total cr*p. As a result, most of my reviews are highly critical ones because there’s far more cr*p than super great deals and the great deals rarely NEED further feedback from customers because they’ve already received so many.
Once, when a US supplier, actually a drop shipper run from China, gave me a BS run-around – “send us a photo of the markings on the batteries”, then, “ship them back to us at your cost” those -lipos- having been shipped to me, by the way, from within the US with none of the proper markings, un-boxed and loose inside of a bubble wrap envelope(!) via first class mail (meaning air transport could have been used), every violation of safety for the shipment of lipos! They wouldn’t provide a refund until I shipped the worthless (<50% of rated capacity) batteries back to them. I told Amazon about it and THEY refunded my money.
BTW, that's the only seller on Amazon who ever gave me a run-around about a refund.
That’s not what I said……..
OMG you read the directions first ?? How weird is that? My mantra is “when all else fails, read the directions”. I’ll bet you drive down a curvy street with no traffic and never cross the center line also.
“Best thing about Amazon (other than the free shipping and millions of items to choose from)? The comments and ratings on virtually anything you want to consider buying.”
Totally agree.
The ratings are good except a lot of them aren’t based on the product itself. Many of the 1’s are given because of fulfillment issues. Many are based on the price paid. Buying something for $10 doesn’t make the product any better than if you spent $20.
This idea, i.e. own distribution network, does seem to make sense. Still leaves the question if it is viable at costs or if the ambition is to raise prices once something going on a monopoly is established.
Negative side is local business is put out, at what price.
I ordered something from amazon last month (because it wasn’t available in time from my regular vendor). 5-8 day shipping was officially “free”, sort of…
Amazon sent the package UPS from their warehouse… to the big post office several cities away from my address. Amazon’s delivery date was the one UPS gave them — and I am told the package was delivered to the nearby Post Office sorting office in five days… just as UPS promised.
From there, my package went into the twilight zone that is the US post office. There was a tracking number, which told Amazon that the package was at the sorting center. I contacted Amazon’s customer service, and they contacted the Post Office sorting center… only to discover the package had supposedly left the facility a day before UPS delivered it.
Lots more shuffling and bureaucratic run around. After two weeks, Amazon offered to overnight a second package to me free of charge. Great customer service, but hardly a sustainable business model (and this wasn’t a trivial cost item). Amazon shipped two counts of the same item, plus “free” regular shipping, plus complimentary overnight shipping — and I was only charged for one count of the product. Amazon lost a lot of money.
UPS delivered the second package overnight, right to my door. My customer got the service I had promised **LATE**, which is bad for my business.
The US Post Office located the lost package a week after that, and eventually delivered it.
Now if Amazon removes UPS from the equation (I doubt one plane will do it, but lets all smoke our dot com hopium anyway). Amazon flies the next package on their own jet, and then drops it off at the twilight zone US Post Office.
Two issues:
(1) getting the package to the Post Office is not getting the package to Amazon’s customer.
(2) Why should taxpayers subsidize Amazon’s deliveries? When the US Post Office delivers a package, it don’t cover their costs. TAXPAYERS, not Amazon, end up paying the difference via on-going bailouts… The USPS has been given an extra few billion (ranges from $4B to $9 billion per year) for decades — and there have been dozens of “five year plans” to restore the Post Office to break even.
Why should Amazon, run by the richest welfare recipient in the country, get shipping subsidies from taxpayers? because that is what “Prime Air” essentially is about.
If Prime Air takes off (pun intended), every big retailier in the country as well as FedEx and UPS are going to sue the Post Office for discrimination. And they will win the case, probably won’t even go to trial.
Guess who are the biggest employers of both rail worker and Teamster union members? UPS and Fedex. No one else comes close. Guess who pays local property taxes? Obviously brick and mortar stores.
Amazon grew by exploiting sales tax loopholes, and now they are using Post Office subsidies…. except Amazon’s modus operandi is now well understood, and a LOT of states are in financial trouble.
Think politicians can ignore rail workers, teamsters, and lost property taxes? Or will Congress order the Post Office to charge Amazon the true cost of delivery?
As a seller on ebay with over 800 feedbacks, I have dealt quite a bit with shipping going in and out. I have had more problems with UPS than with USPS. I absolutely will not ship anything fragile by UPS. Sometimes UPS does not pay the claim on the insurance you paid for either.
Do you know the post office loses money on packages shipped from China? They get a special rate: https://venetianbeadshopblog.com/2015/01/15/us-post-office-subsidizes-shipments-from-china/comment-page-1/
I don’t know if UPS mishandled your package. I am sure the US Post Office sometimes delivers packages correctly. I am not arguing about that.
I am arguing against the slimy backdoor subsidy that Amazon gets by drop shipping packages at the post office. I want the post office to charge amazon at least their cost (like a REAL business), and perhaps a slight profit.
I don’t want taxpayers to subsidize amazon’s shipping costs… Its especially bad to have Amazon take US subsidies to ship products manufactured overseas.
Why should US workers pay taxes to help pay to ship a foreign competitor’s product? How does that make any sense to you?
“I don’t know if UPS mishandled your package.” Yes you do know, Medex, I just told you, and to be clear, it was a lot more than one. If you use UPS you had better know that their own policy is that if the contents of the package break when it is dropped from 10 feet onto concrete, it wasn’t properly packaged. No joke, I once followed a UPS delivery down the sidewalk to my door (he didn’t know I was behind him) and watched as he dropped a box of dishes on the concrete, not by accident.
A friend of mine once had a temp job at a UPS sorting facility. He said it was just like the Luci Show episode when she & Ethel work in the candy factory and everything is falling off the end of the conveyor.
If the UPS truck comes to you in the afternoon, look in the back. Everything is falling off the shelves and tumbling around on the floor.
My other point was in support of your mention of stupid USPS giving discount rates to Amazon, apparently like they do for Chinese shipments.
I don’t know if UPS mishandled your package. I am sure the US Post Office sometimes delivers packages correctly. I am not arguing about that.
I object to the sneaky subsidy amazon is collecting. Why should US taxpayers subsidize amazon USPS shipping costs?
Why should US workers pay taxes to help pay to ship a foreign competitor’s product? How does that make any sense to you?
Same here. Almost flawless performance by the USPS, but UPS can be dismal at times.
I have sent 10 business envelopes out from two different post offices (on two separate occasions).
In both instances, the envelopes were dropped in the OUTMAIL chute inside the post office. Same fonts, same stamps, same envelopes (from the same box of #10s) — mailed at exactly the same time.
In one case, some were delivered locally in 1 business day, while another was delivered (also local) after 5 business days. Out of town mailings had random delivery times.
The other case, envelopes addressed across the country arrived before any of the local addresses (the long distance recipient wrote back, with a copy of the post mark).
Different post offices are better / worse than others. I suspect UPS is the same. Whether your local UPS or your local post office is better or worse isn’t the issue.
Amazon collecting massive taxpayer subsidies to deliver packages is the issue — it smacks of central economic planning. It gives an unfair advantage over less politically connected businesses. And a lot of Amazon’s sales are manufactured overseas.
Why should US workers pay taxes to subsidize the post office delivering amazon packages that contain products manufactures abroad by competitors of those US workers? How does that make any sense?
Retired Postal worker here. The subsidy paid to the Post Office is for congressional mail, and for non-profit mailings. The P.O. looses money because of 2 things. The first is because they need to pay up front for retiree health care; even those employees not yet hired. (No lie-congress required a certain amount be paid every year, regardless of staffing levels). The second is because they are ill equipped to handle the volume of packages, as their business model (if it can be called that) is based on (or was, anyway) on 1st class mail. That is the only thing they have a monopoly on They are getting better at it, and finally devoting proper manpower to it. Also, they are hamstrung by the fact they need congressional approval to do anything; be it office closings, rate structure, or delivery times. (I think they also make poor choices at times). The unionization is also a hindrance when it comes to removing dead wood, although anyone with a vindictive boss was glad to have them (and they do indeed exist, both dead wood and worthless bosses-just like any other large enterprise).
The deal with UPS has been ongoing for over a decade, also exists with FedEx (they’ve handled express mail for years), and was called Smartpost. The drops at local PO’s have gotten larger over time. FedEx actually has contract help do the drop in many areas,unlike UPS, which has their own drivers do the drops.
@just Newman — you seem to forget the $5 billion extra that Congress gave the post office in addition to the their stamping priviledge.
You postal creeps have had more five year plans than the Soviets, and you failed each and every time. Its not politics, both political parties have given the post office bailout after bailout after bailout.
This is not a government agency buddy. You will get called out when you lie, and no one cares about your abusive union rules. If you don’t like being called out for lying, then go get a real job in the real world. You won’t get the short hours and regular breaks that you were used to when you misdelivered mail.
@Medicine man-I’m not lying. Nor have I forgotten any of what has been pumped in. When I was hired it was indeed a government agency. It is now a “quasi-government” agency. I made the comment I did in relation to the Amazon article. The CURRENT subsidies are as I’ve stated. So are the parts relating to UPS and FedEx drops. I am more aware of the faults of both the P.O. and the assorted unions than you are. Believe that. I offered information that you chose to reject in a most uncivil manner. Show me where I lied, or leave me be. Rest assured, I will no longer reply to you, Medicine Man.
@Just Newman — rest assured, no one cares if you reply or not. You are a lazy, lying, useless government bureaucrat who barely “worked” and now you are “retired” and living off taxpayers without even pretending to work.
Your so-called profession used to be the butt of comedic jokes (NEWMAN!!!) but they don’t even bother to make fun of you now.
Your former welfare employer gets subsidy after subsidy after subsidy — and loses money because they employ 5 postal sloths to do the work of 1. And they let you “retire” after barely working.
You don’t like being called out as a lazy sloth? Too bad. I don’t like paying taxes to bail you out year after year. I don’t like you losing my mail constantly. And I don’t like the fraud you pull when the government charges higher taxes for “the poor” and instead gives the money to lazy bureaucrats like you.
You don’t deserve constant bailouts and subsidies in the first place, but suggesting that political donors like Bezos are also entitled to postal bailouts is even more absurd.
If Amazon were a real company, they would make money and wouldn’t need subsidies. Same for your GSE postal system — its only a “private” company on paper. On its own merits, it would have gone out of business years ago.
Take the money the government is GIVING to you (you did not earn it) and return it to taxpayers who actually worked for it.
How many people are fired from the USPS as compared to UPS.
I have had the same commercial address for 24 years and they STILL can’t reliably deliver my mail. My commercial neighbors have a standing joke that our post office is a social program as it forces us to all commune to exchange each others mail that has been incorrectly delivered. I paid them $20 for overnight mail delivery to an adjoining city 30 miles away. It took FOUR DAYS to get there. No other BUSINESS would still be in BUSINESS if they operated that way.
An exactly how many years did you toil for your “retirement”? I’ve worked my entire life and at 64 see no “retirement” in sight. I suppose I’m just not as entitled as others. But from what I understand I evidently owe YOU.
Almost everything I have ordered from Amazon has come to me through USPS, and they are HORRIBLE. USPS delivers even on Sundays, which be be wonderful if they were delivering to my home, but they deliver to my office/warehouse in an industrial area where virtually NOBODY is at during nights or weekends. If they deliver at all they typically just throw it on the front porch, regardless of weather. many times items completely soaked through in rain. I actually purchased a 100oz silver bar through Ebay and they shipped through the USPS and the driver left it on his truck for a week until I actually cornered him and made him look for it in his truck, which he eventually produced.
There is something going on here and I believe it to be completely unfair. Manufacturers are producing FURNITURE in China, boxing it, shipping it to Texas, UPS is providing door step delivery, for less than I can hire someone to transport the item across town…..this INCLUDES the cost of the furniture.
Now I KNOW everyone loves a good deal but REALLY! Somehow UPS, USPS and others are providing shipping rates far below what any of us can buy it at, and manufactures are selling manufactured products for less than we can buy the materials.
Feels like I’m sucking on a chocolate dipped 357 magnum. Mish would say I should just enjoy it.
Mish would say I should just enjoy it.
Please don’t say what I would say or suggest when you don’t know.
I delete comments like that all the time
Mish, You have told us “luddites” for years that we are to enjoy and revel in the stupidity of those who would sell us their production at below cost, and MY contention is that it is folly to ignore what the entire point of dumping is…to destroy your competition. Not only folly but suicide. A chocolate dipped revolver.
Amazon has been dumping for years, selling product and services below the cost that others could….not because they were so much more efficient but because they were “special” and visionary and allowed to sell, to grow with NO profit for decades, while people like you and I are NOT. As a business owner for over thirty years I have NEVER been allowed to operate at a loss for any extended period of time.
We are experiencing the exact same thing with your beloved technology, most all of it funded by debt that we KNOW will likely never be repaid yet we also know will likely become a burden for the citizens to carry on their backs for an eternity. The technology that we enjoy we do not own, and those owners will NOT simply GIVE it to us because we are entitled, and as THEY own the government as well (except for its debt), we will find ourselves entitled to little except that technology which we can implement to enhance THEIR lives.
Sorry I you feel I put words into your mouth, but this is the way it seems to me.
Amazon has been dumping for years, selling product and services below the cost that others could
So what?
I approve of MSFT doing the same, I approve of China “dumping” steel, I approve of Google when it comes to ads.
If it lowers the cost to consumers, I approve.
So should any thinking human being.
I do disagree with any subsidies Amazon receives if any. I disagree with any subsidies Tesla gets and there certainly are some.
In general, I would kill all govt subsidies and tariffs on everything. But I would also change tax law to make it harder for businesses to get tax breaks overseas. The best way would be to slash corporate taxes to zero.
Mish
Not cheaper, not free even – if someone pays you to be dependent on them would you accept?
This is the sort of dynamic being discussed. We should be familiar with the concept as it is a common marketing ploy. Exactly what the setup is is where we lack detail, it is so complex, but there are a fair few people who notice that there is something very skewy going on.
Mish is correct – the advantage to the consumer is the only yardstick that counts. The yammering about “dumping below cost” is protectionist balderdash that never holds up under close scrutiny. Despite its (frankly inexplicable) popularity it is completely misguided.
I think Mish is failing to make a critical distinction. If Amazon (or MSFT or whomever) dumps products at a loss TO THEMSELVES — then its their own business and the consumer wins.
When a socialist, state favored enterprise (like Amazon) dumps products at a loss covered by taxpayers — that is a different story. Amazon is abusing the power of the state to force everyone to subsidize their shipping at the expense of every other retailer.
Amazon is not “dumping below cost” — Amazon is using political connections to steal taxpayer subsidies. Its central economic planning. Its socialism. Its unAmerican. Its immoral and unethical.
What are Amazon subsidies?
If they have any, I am against them.
How are taxpayers subsidizing Amazon?
I am sure the US Post Office sometimes delivers packages correctly. I am not arguing about that.
I object to the sneaky subsidy amazon is collecting. Why should US taxpayers subsidize amazon USPS shipping costs?
Why should US workers pay taxes to help pay to ship a competitor product? Especially a foreign competitor? How does that make any sense to you?
Medex, who is the “you” in “how does that make any sense to you?” I haven’t read anyone arguing about that with you here. Calm down; don’t go “postal”.
It was the “royal” you (a generic person, anyone reading)
And my comment was posted three times due to technical difficulties, didn’t mean to repeat myself
Ah, those twicky twechnical dwifficulties. It was posted as a reply so it seemed to refer to someone here. May I suggest a generic “anyone” instead of “you”?
Good point about the ‘you’. A person has to guess how it is said online. Example yesterday “you can take your WMD”… I had to figure out you weren’t on the offensive with me. It is really easy to get confused in comments…can be fun too, enlightening even… but “you” is usually taken personally… and it is people reading and being affected by what you write.
Also yesterday I think Huson misinterpreted which firm you were referencing CJ, maybe your error because he was talking of another initially, point being a conversation can go to **** and become unkind over nothing, over stupid misunderstandings.
Always better to be something impersonal unless you are certain what you are saying, to who, and why… the debate is supposed to be on a topic.
Now back to the flaming I suppose.
Crysangle, I would have corrected that error (mine or his) if I had seen it, whatever it was, but I can’t hang around on these comment threads forever, I do have other things to do.
Similar, thought I should comment at the time but was late . Wasn’t singling you out, was his reply that was sharp, just saying how confusion happens.
I’m sure “the” post office is not universal in its attributes, but I can say mine is terrible and has been for decades, and no matter how bad they perform, there is no change.
I’m a 30 year retired fed, and you know what? I in essence agree with your summation of said employer.
“I suspect Amazon is losing money on us,”
…
At what point will start making (seriouis) money? Or, when will the market finally call them out if they can’t?
Thought it telling when Amazon announced it was buying Whole Foods (for a meager $13 billion or so) that it would have to borrow. And might be downgraded (Fitch?).
Where is the money??
Amazon’s retail sales have never made money. It isn’t a real business. They make money off tax subsidies (to the US Post Office, and in amazon’s early days by evading local sales taxes).
All of Amazon’s “profits” come from AWS, their web services. And a lot of those profits come from government contracts…. so once again, they just mooch off taxpayers.
Tesla isn’t getting the government subsidies they once got under the ghetto ex-president, and Tesla’s sales are imploding worldwide. They sold ZERO cars in Hong Kong last month as the Chinese government stopped their subsidy (the Chinese have their own local GSEs to subsidize already). And Tesla still doesn’t play by the same NHTSA rules on defects / mandatory recalls.
When an alleged “private business” cannot survive without ongoing taxpayer subsidies, one has to ask if it is a real business. Central economic planning is bad policy, and its hurting the US economy.
I realize many investors think of Bezos as a messiah (like Steve Jobs) and want IN … to be around for the next Big Thing.
And, if, er, something to were to happen to Bezos … the stock price?
FYI
Amazon’s Profit Margin No Higher than a Retail Grocery Store.
Amazon.com Profit Margin (Quarterly):2.03% for March 31, 2017
https://ycharts.com/companies/AMZN/profit_margin
Is that profit margin for total sales (both retail and AWS)? Because profits on the web service are enormous (especially no-bid government contracts). If the total profit margin is miniscule, it means they are losing money on the retail side
Great Points.
Thanks Medex Man. I didn’t know all of that, nor the full extent of all that on Amazon.
As a custom furniture manufacturer, who do you believe could “compete” with me if I NEVER had to make a profit?
I would be a damned GENIUS I tell ya!
Why would you care unless you are short the stock? For consumers it is great that the company is prepared to have a great many “loss leaders”.
If Amazon was selling at a loss to themselves, that would be good for the consumer.
The fact that Amazon is selling at a loss to taxpayers is the problem. If it was a real business, it wouldn’t need ongoing taxpayer subsidies.
Stealing from taxpayers is wrong.
Amazon no longer offers the best prices all around, people still need to shop around and remember prices as best as they can.
I have found items on Target that are literally 1/2 the price of the identical item on Amazon And on a recent run to an electronics store I found a similar situation, where the prices at least matched Amazon.
But yes, we do have prime membership and use it often.
Same here.
I NEVER buy off Amazon without checking elsewhere first. My wife loves her paperwhite kindle and got Prime for the digital books. But we still only use Amazon lightly.
Better deals elsewhere.
While I was a member of Prime, the “free download” digital books never interested me. I download free digital books from the county library system for 3 weeks at a time. I like my paperwhite Kindle as well.
Very true. Not only the price, but the whole experience. Many comments including here is that Amazon must be loosing money on them, and someone else is picking up the slack. Amazon does not make money, and get`s a huge leeway from Wall Street, but count on it, eventually it will be YOU who will pay big time.
A lot of that is manufacturers forcing price agreements on their sellers. If Best Buy and Amazon are selling at the same price, Amazon is making more money on the item even if they eat the shipping cost because their overhead is so much lower. The only thing the b&m store can offer is instant gratification, But Amazon is closing that gap.
The b&m offers reward points so that they can still report the sale to the manufacturer at the agreed-upon price. But most customers don’t want to have to keep track of numerous loyalty programs and credit cards.
We should not mistake to POWER of market dominance with efficiency.
Some insider points: Amazon is a LONG ways away from being their own delivery company. FedEx has over 500 aircraft, ups over 250. Each of them have tens of thousands (if not 100 thousand, delivery vehicles. Hundreds of thousands of workers to deliver tens of millions packages daily.
Amazon air is not an “airline”, they contest with two very small companies to provide air service. The massive shortage of pilots and aircraft mechanics is hitting these small companies very hard and they are having difficulty filling their seats in the jets. Also, they are already dealing with major labor strife. Their costs are going to increase significantly, where as UPS and FedEx have their costs contained, and they enjoy an economies of scale advantage.
Amazon does not ship things “free”, they just include the costs in their product/service costs. Keep in mind that the sellers pay Amazon for use of their market place, the buyers pay Amazon as well. But being a virtual “store” is much easier than being an actual shipping company.
Further, Amazon is reaping many tax loopholes and the greedy governments are already seeking ways to pull more revenue from this financial giant. This has been one of the motivations of owner to be so leftist, so he could enjoy the Crony capitalism of the leftist govs in CA and federal gov. This is going away soon as well.
It’s cute to see people fawn over Amazon, but I see it as a house of phones cards. And from all reports, Bezos is a lousy employer, with unemployment falling, he will struggle to costs low.
for semi major purchases I check costco, sams(jet) and sometimes ebay against amzn prices, nobody wins all the time but amzn has never been way out of line compared with the others
I single order an awful lot of stuff because of prime
an in-law in australia couldn’t get simple antibiotic cream without aussie prescription and then expensive, i had amzn ship him a half dozen tubes of cream for about 5 bucks
Filipinos buy tvs (made in Asia) in US and back ship them to the Phils, the loooong round trip is cheaper than buying locally
overall the US is a consumers paradise
Yes. Best place to shop in the world. Massive selection and best prices.
As for Amazon, who cares about the details. I order tons of crap from ’em. After about 20 years I still never lost the Christmas feeling every time I see the delivery truck.
A consumer paradise, YES. A manufacturing and employment paradise….not so much.
Enjoy the cheap prices as once all alternatives are gone, they will charge what they please. It’s called a “market”.
they will charge what they please. It’s called a “market”.
Only in your distorted dystopian view of markets. I would bet significant size that can not happen.Widening margins always brings in competition. That is what is called a “free market.”
So you’re saying new American TV manufacturers are popping up all over.
I don’t claim to be as smart as you but predatory business practices have always existed…for a reason, and it’s NOT to do their customers a favor. Many industries can be destroyed in relatively short order, but growing them back can take decades, especially with a government with it’s boot on their necks.
Nation’s like China are definitely predatory and it’s NOT just about commerce. Their are ideologies involved, and are we going to suggest that China’s leaders have huge compassion for human rights…..or even happiness? At best they simply want to minimize riots but there can be no doubt they are about winning, domination.
No, what I am saying is that if they try and raise margins you will almost immediately bring in other players. You might insist that industry takes decades to rebuild but that is just not true. Capital is sloshing around this world always looking for a home, and regardless of what you think of Tesla and its viability, the one thing it does illustrate is how readily capital can move to build a large infrastructure in a short period of time.
Other than that, I am just saying the U.S. is the best place in the world to shop. I will be back there in 2-3 weeks and I intend to shop til I drop. Might even house shop a bit while I am there.
madashellowell – they won’t get it until they get it. They simply can’t think long-term.
So “Uncle Sam” is Jeff Bezo’s BIG SUGAR DADDY!?
I love the old white men whining about Jeff Bezos. I doubt he gives any of you old white men a nano seconds thought. The world you are living in is for younger generations and all you can do is bitterly complain about it!
You are a racist.
No one here identified as white or male — you just assumed that because you wanted to start an argument. Go back to your Soros funded “protest” march
Ain’t the youthful indoctrination just grand?
And to think old white men work so hard to pay for the education of these geniuses.
To big to succeed, it will fail spectacularly.
to, too, two. It’s a third grade thing.
https://m.youtube.com/watch?v=cg9kisHETKI
the amazon warehouses are slave ships.
“The beatings will continue until attitude improves”
Technology like Math, just is. We had too much retail floor space, yet owners of that space want to raise rents.
Result is traditional retail bankruptcy followed by the lose of retail jobs and the lose of the value of retail real estate.
Normal results of too much DEBT resulting in many bankrupt firms.
Just a comment from the antipodes. I rarely use Amazon as the delivery charges from the USA are horrific – same for Europe where I recently wanted to buy a book for about USD$60 only to be faced with a delivery charge far bigger than the book. Fed-ex and UPS are crooks and the sooner Amazon delivers themselves the better. Meanwhile Alibaba for me – they often deliver for free and are X times bigger than Amazon.
I live out in the sticks, and Amazon Prime is a real benefit for us. Like Sears before it they level the playing field for rural vs city when it comes to retail. But they aren’t the only player out there. As Mish points out a little comparison shopping is often worth the time.
Lately I’ve noticed a Amazon Prime tractor trailer on I-70 on my way home a few times a week. They’re expanding the distribution center in Denver again too. Pretty clear they’re gearing up for end-to-end delivery, basically emulating the Walmart model for now, maybe same day premium delivery on some items. Order by 10:00am get it by 10:00pm perhaps?
So according to a citi “analysis”, Amazon gets an average $1.46 taxpayer subsidy through the Post office — for EVERY PACKAGE. And they still lose money doing it! (they make money on their AWS web services).
https://www.wsj.com/articles/why-the-post-office-gives-amazon-special-delivery-1499987531
Its fine if Amazon sells at their own loss — but Mish needs to distinquish when a company sells at a loss that is subsidized by taxpayers, including the competition.
Why should other companies subsidize Amazon? Why should Walmart, Target, etc? And why should mom and pop retailiers? Ultimately, that is who “taxpayers” are — not the fools in Washington DC
I’ve been finding good deals on walmart.com and picking up at the walmart closest to my house thus free delivery. Bought a few things WAY cheaper than Amazon that way. I would rather buy though Walmart all day. Amazon is getting WAAAAY too big and controlling WAAAAY too much. This is NOT healthy. It is not a good thing when Amazon controls every purchase you make, Google controls every search you make, and Facebook controls all the social networking. Monopolies are not good. It’s really scary actually how much power those 3 companies have. Go Walmart!!! A good competitor like Walmart for Amazon will make it MUCH better for us consumers in the long run. Make sure you search walmart.com to compare when searching Amazon. In addition, I don’t like Bezos politics at the WA Post.