
Bezos Faces Season of Worsts as Losses Mount - dataminer
http://www.bloomberg.com/news/2014-10-24/amazon-ceo-bezos-faces-season-of-worsts-as-losses-mount.html
======
MCRed
I've always thought of Amazon as a company whose primary product was their own
stock. They had a great model-- their terms with vendors were such that they
often had the customers cash for weeks before they had to pay the vendor.

When I worked there the emphasis was always on new press releases. So they
created many silly things that never stuck-- like Amazon catalog shopping:
They took paper catalogs from other retailers, sent them to the phillipenes to
be scanned and then hosted them. Amazon movie times. Amazon local restaurant
menus. All of these are now gone.

I worked on the product search engine, and for laughs I like to go back and
check the regressions that we worked on during my time there. About 9 months
after I left, a key one came back... and it's still there many years later.

I think this is because they simply disbanded the search team. I'm sure it's
been since reformulated and disbanded several times. But the regressions in
question, by the way, we had automated tests for. We tested for them before we
pushed code.... I think those tests have been lost in the chaos.

Amazon was constantly reorganizing.. and products (software products) would
get abandoned because the team would be dissipated.

They were also very poorly managed for a "Tech" company. My boss had trained
to be a prison guard-- I kid you not-- his degree was in criminal justice. By
the time I left, %80 of the team had left for other positions. His boss was
one of those old school middle managers who you would expect to be running the
DMV. Neither of them were technical- their skills extended to managing email
and spreadsheets.

And yet the stock has continued to rise, even on little or no profits.

They're great at selling stock-- look at the P/E ratio.

~~~
sillysaurus3
It's alarming how consistent HN comments are regarding working at Amazon:
management is dysfunctional.

Might Amazon secretly be one of the worst famous large tech companies to work
for?

~~~
sytelus
According to the book "The Everything Store", Amazon employees pay for the
parking ($20-30 per day). Coffee machines are ancient varieties but it's
better than past when employees also had to pay for coffee. You get the desk
that is downright cheapest possible thing you can get. And so on...

If you are wondering how Amazon can attract any talent at all, the answer is
that 70% staff is college hires that were promised significant stock. The
caveat is that it doesn't even start getting vested until _after_ 3rd year.
Most of the hires leaves in about 2 year (attrition rate is being rumored as
much as 70%). So their secret is feeding the growth engine on huge swaths of
college hires that can be lured for stock options in distant futures with
expectation that they will just leave before vesting starts.

Well, I do love Amazon. One thing they have got absolutely right is obsessing
about customers. Everything starts with customers, period.

~~~
CalRobert
Why should parking be free? I have always ridden a bike or taken transit to
work; I don't see why I should be subsidizing other people's parking. My
previous two jobs both paid you not to use parking (which is effectively
charging for parking, in a way), and I was grateful for it. Now I work in a
city center and it's taken for granted you won't be driving.

~~~
funkyy
Company is not a social being or country. Its not you, who is subsidizing
parking. Its company. If they would stop doing it in 99% cases nothing would
change for you money wise.

The way you think now is "I dont use it, so it should be paid."

Maybe you should pay for bicycle parking as well?

~~~
CalRobert
Companies normally try to cut costs where possible. If they can rent fewer
spaces in a garage that certainly ought to save them money, in addition to
giving them greater flexibility when considering alternate locations.

I don't really understand what you're actually saying. Is it an accusation? A
counterargument? Merely an observation? I do think people should have the
option to receive cash in lieu of benefits where practical.

------
IgorPartola
Yikes. I use them both for their AWS service and as a consumer of their
ecommerce side. I don't do much with their Prime programming, but I have a
membership. There are a couple of areas where Amazon got worse since 2012 on
the ecommerce side. First, Add-on items are annoying. Stuff I used to order
and get for free now has to be bundled. I get why they are doing this, but
it's just jarring.

Second, their prices actually seem to be getting higher. I can often now find
equivalent products cheaper locally. Tools are especially bad that way: Home
Depot regularly beats them. Clothing is a crapshoot, but I generally find
better sales at local stores as well. Amazon will typically have the best of
breed item, while not having a basic version for a reasonable price. For
example, last winter I bought winter gloves. Amazon had great ones, with good
reviews, etc. but I bought a pair for 80% less that while not as good was very
adequate. I checked later and Amazon did not carry this brand or much decent
stuff at this price point.

Search is getting worse. More products are miscategorized and you have to be
very careful about what you buy. Here's a quick example, search for "GoPro".
You'll get many duplicate options, often with confusing descriptions, in
different departments, etc.

They are still a powerhouse when it comes to online shopping, but I really
wish someone gave them a kick in the ass in terms of pricing and usability.

~~~
bitL
Median selling fee is 15% from the end price so if you run your own
marketing/ads/sales, you can offer prices without this "tax". This pushes 3rd
party sellers to either very low margins (especially in electronics) or higher
prices on Amazon in exchange for discoverability and no need to run your own
SEO/eshop/marketing etc.

~~~
hga
Amazon has something of a monopoly on trust in 3rd party sales. Lots of
experience gives me great confidence in sellers with a 96% or greater rating,
and willingness to pay more. Whereas my father and I have found in an iPhone
purchase (an old, but still well over $100 model) that eBay can be trivially
played to completely screw over the buyer.

For that matter, Amazon has a 5 refunds per lifetime policy last time I
checked; that limits it to really big ticket items, but without that there are
a number I wouldn't buy through them.

~~~
mleonhard
This is the first I've heard of a limit on refunds. Can you point me to more
information?

~~~
hga
I think it's their "A-to-z Guarantee Protection", and I now note no lifetime
limit ... and claims can be denied for other than clear cut legit reasons (a
catch-all "Amazon regarded the claim as inappropriate." see
[https://www.amazon.com/gp/help/customer/display.html?nodeId=...](https://www.amazon.com/gp/help/customer/display.html?nodeId=200783790)).
Also a $2,500 limit.

Note this is the last ditch, the seller isn't playing ball resort.

------
bane
I've started to hate shopping on Amazon. The other day I was looking for a
tablet, typed in the search, gota huge list of results (mostly not relevant).

Prices are $xxx used and new. Okay, so is it $xxx used or new? Inquiring minds
want to know!

Clicked through to the listing.

No price. There's a bunch of other gibberish, it's not being sold by Amazon,
and no price. Have to add it to my cart to see the price.

Really? All I want is to see

a) do you have the tablet I want?

b) what does it cost?

c) when can it be delivered?

I don't care about the 173 other vendors that sell it, the used or new price
(no category for refurbished btw), or any of that. I don't want to have to add
a dozen copies of the same item to my cart just to see what it'll cost, or if
I have to pay shipping, or what the shipping will cost.

It's becoming absurd.

I think sometime in the last year, Amazon jumped the shark and has moved to a
model of actively hiding things from the users...this is usually the beginning
of a death spiral for many companies and it explains reduced business volume.
It's something pathological that companies seem to want to do, make it hard to
buy their stuff, that always seems to indicate the beginning of the end.

edit _dammit_ now Newegg is pulling the same "see price in cart"
shenanigans....I'm about done with on-line shopping...time to just go to Best
Buy or Costco

~~~
nate_meurer
I've been redirecting my purchases to Newegg whenever possible, partly for
this reason. Newegg's Marketplace (the term just refers to items sold by third
parties using newegg's site) is seamlessly integrated with their core retail
business; marketplace items appear alongside items sold directly by newegg,
and the pricing remains transparent.

Some stuff is quite a bit more eggspensive than on amazon, but I love newegg's
troll-fighting work so much that I consider the extra expense a charitable
donation.

~~~
bane
Yeah, I was just looking at Newegg for those reasons. I buy my computer stuff
from them because I think they're worth supporting.*

But dammit if they also aren't starting to pull the old "see price in cart"
scam. No! I will not see the price in the cart. You've lost a sale.

* Last time I built a computer I was so informed by NewEgg's interviews with the reps from the various parts companies that I really didn't have to do much other reading. I knew based on the interview with each company's rep basically what I wanted to buy, which tier of product and what I'd get for it. It was such a better experience for me than reading a bunch of hardware sites.

The computer I built based on that is the best computer I've ever had.

~~~
zaroth
Never understood why it isn't just 'Click to show' the price. A click to
reveal is still not great, but gives them every bit as much information for
less overall UI pain.

------
blhack
Wow, you guys all seem to have extremely different experiences with amazon
than I do.

I buy everything I can on amazon, I love having prime (it would be one of the
last things to go if I was cutting costs heavily).

I also have no problems with the search. Anecdotally, I see more and more
people I know signing up for prime and doing most of their shopping on Amazon.
From my perspective, Target/Wal Mart should be really scared of this.

------
untog
When will Amazon get out of the hardware business already? The Kindle Fire?
Awful. Fire Phone? Awful. Whatever their TV box is? Well, jury is still out,
but...

Amazon excels at many things, but they've demonstrated that hardware (well,
actually, primarily the software that runs _on_ the hardware, but still both)
is a huge weakness.

~~~
nkozyra
I'm not interested in any of these products but here's my impression:

\- Kindle Fire initially fulfilled an unmet market - Android(y) tablets for
less than $200 that weren't total garbage. When the Kindle Fire launched,
there were none. Tablets cost $300+ unless you were satisfied with some
terrible off-brand tablet.

\- The Fire phone. Total flop. Total miss. They offered nothing to the average
Android phone user that wasn't already available, often for cheaper. Amazon
has been giving the milk away for free and are now reigning in their services
(which is why there's no Amazon Prime for Chromecast, for example).

\- The TV. I think it's sleek looking and competitively priced (with
everything but the Chromecast, cough, cough). You're basically throwing a dart
at Apple TV, Roku, Google Player and the Amazon TV product, though.

I welcome anyone to the hardware market, primarily because the competition
will drive this and frankly we have some dismal options outside of phones.
Anything that can drive innovation (and prices downward) sounds good to me.
Flops will happen along the way. Companies will try things and fail
magnificently and that's ultimately good for (almost) everyone.

~~~
ido
For a while the kindle fire was _the_ android tablet - as a game developer
you'd often sell more tablet games on amazon's app store than on google's.

------
jackcarter
This is barely on-topic, but hoping that someone has a workaround, I'll share
my biggest gripe with Amazon:

When you find a product with multiple options (say, color[1]), often the
variations will have different prices. It tells you the minimum and maximum
price, but forces you to click through every single variant to see their
prices. To make matters worse, it takes multiple seconds to load each price.

Is there any way to view product variants in a table format?

[1][http://www.amazon.com/Nalgene-Tritan-BPA-Free-
Bottle-1-Quart...](http://www.amazon.com/Nalgene-Tritan-BPA-Free-
Bottle-1-Quart/dp/B001NCDE8O/ref=sr_1_1?s=sporting-
goods&ie=UTF8&qid=1414203128&sr=1-1&keywords=nalgene)

------
bsder
Now that states are forcing Amazon to collect sales tax, it has no in-built
price advantage over brick-and-mortar stores.

Additionally, the brick-and-mortar stores are using their retail space to
handle deliveries and returns that Amazon has to deal with in terms of
postage.

Basically, the brick-and-mortar stores have finally pulled their heads out of
their asses, and Amazon has nothing to fight them with.

That's why Amazon is getting pummeled.

~~~
uptown
In some cases, they've dramatically increased their prices on some products. A
concrete example:

Honey Bunches of Oats 3 pack cost $14.33 with free Prime shipping in November,
2012. Today, that same pack costs $29.99 and is no longer eligible for Prime.

I've seen the same pricing trends across a number of their products, but other
online retailers offer the same items for considerably less. I think they
thought consumers might just stick with them because of habits and the
expediency of "Prime" but when prices jump by over 100%, you can bet I'll seek
alternatives.

~~~
ams6110
honestly, people are buying Honey Bunches of Oats on Amazon? My mind reels.

~~~
brandonmenc
Why?

If you don't want to drive or worse, don't own a car, or you're a shut-in, or
elderly, or just simply don't have the time - purchasing some or all of your
groceries online is a life saver.

------
r12s
Benedict Evans (Andreessen Horowitz) wrote an excellent post on Amazon's
"profits". The comments are good value too.

[http://ben-evans.com/benedictevans/2014/9/4/why-amazon-has-n...](http://ben-
evans.com/benedictevans/2014/9/4/why-amazon-has-no-profits-and-why-it-works)

As for the Fire Phone and it's product discovery functionality, I get Bezos'
vision (I think ...) which would be a world with only one retailer.

~~~
stephenr
I don't understand the Amazon loving crowd. The CEO flat out says he wants to
undercut all competition until he has none, and then raise prices.. And people
still buy through Amazon, still use aws, etc.

~~~
ertdfgcb
Really? Do you have a source?

------
christoph
The biggest thing that pisses me off at the moment is their shipping. I refuse
to pay for prime due to the way it seems to be enforced on the user and their
near dark pattern techniques to get you to sign up at every checkout.

Whenever I order something now and pick the cheapest or free shipping method,
it seems to always sit in their warehouse for nearly a week before they even
consider shipping it. It seems like another shady attempt to force me over to
prime.

Most of the time I can buy the same product for similar or cheaper (after
shipping) from another retailer and not have to wonder how many days it will
take them to ship it, or be upsold into a delivery club at every turn.

~~~
baddox
> I refuse to pay for prime due to the way it seems to be enforced on the user
> and their near dark pattern techniques to get you to sign up at every
> checkout.

I've had Prime since shortly after it was first released (it's a no-brainer
for me), so I've never encountered these "dark pattern techniques." Can you
explain in more detail what you mean?

I've also never experienced shipping delays, but again I've had Prime for a
long time.

~~~
coliveira
They offer Prime every time you buy something at Amazon. It is annoying if you
really don't want to sign for it.

~~~
danso
You think _that 's_ annoying? Trying signing up for Prime and _still being
bombarded by ads /links to signup_. Seems to have been alleviated in the
recent redesign, but I was frequently bemused at how Amazon's shopping-
history-feature could know so much about me...and apparently, wasn't tied to
the system that spit out Join-amazon-prime links on a given page.

------
increment_i
The fire phone was a completely unnecessary waste of resources - I wonder how
much that contributed to this dreary news.

~~~
uptown
According to their CFO, it amounts to a $170m loss, with "$83 million worth of
Fire Phone inventory on hand at the end of the last quarter".

[http://www.geekwire.com/2014/amazon-takes-170m-loss-fire-
pho...](http://www.geekwire.com/2014/amazon-takes-170m-loss-fire-phone/)

~~~
vishnugupta
It'd easily be significantly higher if they managed to quantify the
opportunity cost in areas that are doing well (e.g., Kindle reader, AWS,
warehouse automation etc.,).

------
jvagner
This topic gets ping-ponged depending on the prevailing weather conditions.

Amazon has been clear about what they're doing: sometimes this is genius, and
sometimes this is diabolically stupid for shareholders. When a CEO has a 20+
year plan and doesn't vacillate from it, it's bizarre for those who've bought
in to complain every quarter.

I do think, however, that Amazon's recent high profile product failures have
fueled the Amazon growth dissidents. This is Bezos' big mistake... he's gift-
wrapping the big wins to the opposition. And IMHO, it's absolutely legitimate
to wonder how the Fire phone ever made it to market. It was absolutely,
positively obvious that it wasn't a good product. All big companies put out
products that fail, and that's an acceptable churn on the road to success, but
this example shows that there's a huge disconnect inside the company with
respect to the viability of early product iterations.

They blew it, big time. If Bezos had anything to do with approving it, his
round table isn't, or can't, giving good guidance.

I personally used to "love" Amazon. Now they're Just Another Etailer. They've
missed on the emotional customer adherence front, somehow.

------
jmspring
So many people are comfortable with Amazon as the store front that if they
just turned the knob up a bit where transactions were marginally more
expensive, but not inordinately so, they bring in more money and likely don't
lose much traffic. I expect this knob to be turned a bit in the coming months.

------
r0h1n
Pertinent question by BBC _from 2001_ : "When will Amazon make a profit?" [1]

> But its overall performance has remained loss making as it invests in new
> areas and products as part of its 'land grab' strategy.

> The strategy is to secure a large slab of the global etail market as it
> evolves.

> The idea is that this large share of the market can then be converted into
> profits in years to come.

It's amazing how 13 years on Amazon is still pretty much where it was in 2001
in terms of philosophy and losses. And I suppose the answer still remains, its
_" large share of the market can then be converted into profits in years to
come."_

[Edit - added URL]

[1] -
[http://news.bbc.co.uk/2/hi/business/1195954.stm](http://news.bbc.co.uk/2/hi/business/1195954.stm)

------
WalterBright
It seems only just 5 days ago that Amazon was an unstoppable juggernaut taking
over the world!

[https://news.ycombinator.com/item?id=8481011](https://news.ycombinator.com/item?id=8481011)

~~~
arbuge
...and since then it's only grown bigger. Plus ca change...

------
coliveira
I (and many investors) just think that Amazon is badly managed from the
financial standpoint. I don't see any problem in reinvesting your profits, but
you also don't need to incur a loss every quarter for this purpose. Just
adjust your metrics so that you spend a bit less than you make. The fact that
they cannot manage to do this tells the world that: (1) they don't care about
investors money (2) they don't have the ability to control costs even though
they're making billions of dollars in revenue. These things together can be a
recipe for disaster if there is any problem in the economy (think of 2001 or
2008).

~~~
TheEzEzz
> These things together can be a recipe for disaster if there is any problem
> in the economy (think of 2001 or 2008).

Amazon was founded in 94 and lived through both bubbles.

