

Amazon Smile - jmduke
http://smile.amazon.com/

======
guiambros
That's pretty impressive.

Even if they restrict the donations to only a few _" eligible products"_
(which doesn't seem to be the case [1]), 0.5% for a retailer is an incredible
amount of money.

Wondering if they're compensating this move with tax rebates. Amazon already
operates under razor thin margins; they can't afford to take another 0.5% from
the bottom line.

[1] From
[http://smile.amazon.com/gp/charity/pd.html/ref=smi_se_saas_p...](http://smile.amazon.com/gp/charity/pd.html/ref=smi_se_saas_pd_pd)
_Purchases Eligible for Donations Tens of millions of products on AmazonSmile
are eligible for donations. You will see eligible products marked “Eligible
for AmazonSmile donation” on their product detail pages. Recurring Subscribe-
and-Save purchases and subscription renewals are not currently eligible._

~~~
devinmontgomery
"0.5% for a retailer is an incredible amount of money." It's not nothing, but
Amazon makes pretty healthy margins on a lot of what it sells. It's $.50 on a
$100 purchase, which is cheap for an Amazon leader.

It's just really smart. Surely less than the difference between Prime shipping
costs and the annual subscription fee, and with the same purpose: chipping
away at the reasons people would buy anything anywhere else ever.

~~~
guiambros
_> Amazon makes pretty healthy margins on a lot of what it sells_

I guess you're not following Amazon earning reports closely. In Q2 this year,
Amazon's margin was number 1,428, out of 1,515 US companies [1] [2]. That's
barely 1% after-tax margin. In several quarters they reported close to break-
even or losses.

At these levels, a "mere" 0.5% donation would be unsustainable for
shareholders, unless there's a way to claim most/all donations to reduce their
own tax payments.

Margins got better in Q3, but still (intentionally) low.

[1]
[http://www.forbes.com/sites/greatspeculations/2013/05/21/ama...](http://www.forbes.com/sites/greatspeculations/2013/05/21/amazons-
thin-margins-do-not-support-sky-high-valuation/)

[2] [http://247wallst.com/investing/2013/07/25/amazon-com-
company...](http://247wallst.com/investing/2013/07/25/amazon-com-company-
earnings-keep-margin-heading-to-zero/)

~~~
devinmontgomery
Margin on an item is different than gross operating margin.

Amazon makes 20%+ margin, "pretty healthy", on "a lot of what it sells"
(almost all retail items that are marked down 30% or less from their MSRP) and
.5% isn't a lot of that. It is less than Amazon loses on popular books, and
less than they lose on prime shipping.

Of all the things Amazon loses money on to incentivize customers, it's a small
one.

Gross operating margin is only tangentially related and can be increased by
them at any time by spending less money on other investments.

------
andyfleming
Is this new?

