Not exactly related, but I recently canceled my Amazon Prime membership after 19 years of using it. Amazon used to model itself after Nordstrom and Costco, with exceptional customer service and great prices. Now it seems to be wish.com with faster shipping, shady anti-pattern advertising, 90% fake reviews, and TERRIBLE customer service.
It started because a few weeks ago I had a billing question and was forwarded to 6 different reps, also while being told lies about my issue. Finally, the rep asked if he could call. I got a call and it was an offshore guy who had no idea what was going on.
In its place I've been using Walmart+, there are times when Amazon is cheaper, most often though Walmart+ is cheaper, also I can get groceries delivered with rock-bottom prices. If you get the poorly named in-home service you can get as many free (no tip) deliveries to your house with groceries as you want.
I will be canceling in May. The $3/mo to remove commercials was the last straw. I don't know exactly how long I've had Prime, but probably around the same number of years. I've been using Amazon since 1997, according to my order history. Books on May 27, 1997. It will be 27 years this May. Wow.
Not if you "used" the services you want a refund for. And I have, for sure. I had a long discussion with a rep and she said if I canceled I might not get a refund and I'd be out of luck.
I cancelled my Amazon account a few years ago for very similar reasons. But instead of seeking out a different amazon-like marketplace. I just started ordering the things I need directly from the manufacturer's websites.
Usually, the pricing is about the same it's about the same amount of time from placing the order to receiving it. Much of the time, shipping is still free. But even if it isn't that's a small price to pay, considering that I'm certain to get what I thought I was ordering rather than a counterfeit or substitution, and if there's a problem then it's much easier to get it resolved.
I also found that I was going back to physical stores more often, which seems weird, but makes some sense too: I stopped feeling like I could trust the quality of things I was getting delivered and there are few substitutes for actually seeing goods on shelves before you buy and buying exactly the item that you looked at.
For me the "drop Prime" realization hit just after 2020 when I realized that even with everything that went on in 2020 I had nothing actually Prime "Next Day" shipped and had visited more physical stores than I had Amazon orders. In 2020. That certainly seemed a sign that I wasn't getting much value from Prime anymore on the shipping side and pushed me to re-evaluate all the other Prime benefits.
It felt interesting canceling Prime because I was an early adopter and it was a key resource for things like text books for me at that time. I realized one of the things I missed from that Amazon was how much better the eBay-like "Marketplace" orders were differentiated back then (I certainly made quite a few intentionally and it was nice knowing it was a choice between options) and it how much Amazon intentionally fuzzied and then wiped that border away and the UI treats almost all sellers the same now whether first/second party, large automated third party drop shipper, or even small "hobbiest" eBay-like shipper. In this world, physical stores seem safest again and I can see the difference between a major retailer, an overstock warehouse, a thrift store, and a flea market so much better that trying to guess based on what few tea leaves are left in the Amazon shopping experience. (Even Walmart and Target's websites aren't safe as both try to keep up with Amazon and both now have weird second and third-party relationships that are kept intentionally blurry on the websites themselves.) It's almost funny because solving that trust problem of who the seller was was one of the reasons of Amazon and Prime's early success to make online shopping feel nearly as safe as physical shopping. I appreciate the irony that I've returned to physical shopping because it is the only thing that feels safe.
> I also found that I was going back to physical stores more often
I would have mentioned this myself except that I never stopped going to physical stores. They always were, and remain, my first stop. I only go online if I can't find what I need from a local shop.
Amazon delivery drivers inconsistently refused to deliver packages professionally to a secured area or would instead steal or discard them by marking them as "delivered" without a photograph. Customer service was powerless and made no tangible effort to remedy the situation except a refund or replacement that would often also not arrive, so I canceled Prime and stopped using Amazon. It's faster, cheaper, and easier for me to go a brick and mortar store for most things or to use another platform with professional delivery services.
How does the no tip aspect work? Does it mean no tip is required, but is optional... So you open yourself up to the risk of some angry delivery person complaining or exacting revenge on your items during the next delivery? Ideally I would like it to be "no tip possible" meaning even if I wanted to tip, I can't.
I just looked up recent orders I placed on Amazon on wish.com... I gotta say, the results were quite disappointing. I don't think wish.com is anywhere near Amazon.
The FTC, of which Khan is now chair, contends that Amazon has found a way to push up prices after all, without losing shoppers.
There's no doubt about this. I spent a few months of my life doing FBA (Fulfillment by Amazon) before all the white-labeled Alibaba trash dominated the Amazon search results, and it was very easy to find things in the local Target, BigLots, etc. that could be sent into Amazon and sold at 30/50/100% markups, and it would still fly off the commingled shelves.
Amazon got everyone used to the assumption that Amazon prices were the lowest, then introduced the behavioral convenience of Prime, and then slowly allowed prices to float upwards once that Prime behavior was entrained.
The Prime membership has recently reached an inflection point where the value paid is not worth the value received, I just recently let my 15-yr Prime expire for that reason.
Ever since 2017 or so, Amazon is running a global experiment on how far you can drive prices up, and reduce customer service, without loosing customers.
I highly appreciate Khan and what she's doing, it was loooong over due. Driving up prices without loosing clients so is, well, normal I guess? Why would that be a FTC issue?
> This secrecy offends one of the central premises of American corporate law: the idea that, because corporations are an exercise of public authority, the public is entitled to know what they’re up to.
This seems like a leap or a very biased interpretation to me unless they are implying fraudulent bookkeeping. Amazon shares their revenue breakdown by division and are not required to disclose their margins on sub-divisions? Where would the line be, should they share their margins on every AWS product, some of which might be unprofitable?
I fail to see how this protects the public. Sue Amazon for monopolistic behaviour if you want, but the idea that getting sued should result in publishing internal financial information into the public record seems exceedingly disruptive.
This is worded somewhat awkwardly. Nobody that has really thought of it ever thought that AWS was solely what funded Retail. Indeed, Retail was known to seed AWS, such that that view would have difficulty explaining how Amazon grew before AWS existed.
Rather, Amazon has famously spent money on growth. And a distribution network is not at all cheap. You can check openstreet/google maps and see the sheer size of their buildings. I remember the absurd effort to make prime now back when they had to gut some Manhattan buildings to make that work. Could be I was mislead, as I do not claim to be an expert on this, but it did not seem at all outside the pale.
Some of the problems people have when it comes to Amazons financials, or any other companies at that, is the (in)ability to differenciate between cash flow (Amazon retail) and profits (AWS, marketplace and FBA).
Once you grasp that, all of things make a lot more sense.
Indeed, I forgot to put that up there. The big difference between Retail and AWS is that Retail has obviously expensive ways to grow. And has to have an absurd float in the form of inventory to work. I think datacenters have a bit of that, as well. But I would be shocked if it was to the same level. AWS, on the other hand, seems to genuinely have trouble finding ways to spend all of the margin they pull in.
So, I guess after 5+ years after having left Amazon I feel I can provide some insight, mostly based on SEC filings (unless we accuse Amazon of cooking the books, those tell us the aggregated "truth") and conclussions drawn from my experience:
- Amazon retail is profitable, with acceptable but not stellar margins for a retail business, the US part is so
- Amazon's international retail business is, at best barely break-even, and no, I never saw a breal down by country
- Amazon's retail arm is the cash machine, it is always cash positive (potential, but rare, exceptions in Q3)
- In agregate, Amazon's retail arm is cash positive and profitable, some rare exceprions occur in Q3 (ramping up inventory for Q4 is a drain on both)
- Fulfillment by Amazon is a genius thing, hugely profitable with basically no additional fix costs on the operations side, while only occuring variable costs and increasing utilozation of Amazons full logostics network
- FBA also gives Amazon oncredible insights into the eCommerce business of others, and here it starts to become tricky (none of the other points so far are an issue anti-trust wise)
- Profits come, last time I checked (years ago) arpund 80% or so, from AWS, revenues and cash flow come from Retail (also around 80%)
- No idea how profitable or cash contributing Prime Video and adds are, I assume the latter have to be very interessting so
- Devices are basically just a means to sell Prime subscriptions, Audible subscriptions and stuff
- All tax shenenigans Amazon did were genius, and legal (doesn't mean those tricks shouldn't be prohibited, but back then they weren't, so...)
- Nobody outside Retail knew which product lines made how much money (profit and cash), and even then only the one they were involved in, management knew the aggregate (also, only retail management, and I won't ever share the few numbers I happened to see)
- Amazons accounting is top notch, from inventories to cahs flow, profits and beyond, if you think whatever is published is not sufficient, discuss changes to accounting rules (GAAP and IFRS) and not Amazons numbers
- No idea how Whole Foods is doing
- Amazon has enough businesses that don't turn a profit, and closed ultimately, e.g. Prime Now and Fresh in Europe
- Amazon logistics was the logical conclusion of Amazon's growth, service providers capacities (from UPS and FedEx over DHL and various postal services) were not sufficient anymore to swallow additional volumes, hence Amazon decided to invest in its own network instead of someone else's (most likely no anti-trust risk here, unless Amazon abuses it's control over allocations and exagerates its share of most profitable shipments, even then it is more of a contract issue and to my knowledge no carrier ever complained more than the usual about all of that)
Spoiler: The article doesn't say. People suspect Amazon marketplace since it accounted for $140B / year in just fee alone, but the margin is still a mystery yet to be uncovered by DOJ.
Marketplace fees are semi-public, so ine extrapolate. For Amazon's books, DOJ can just ask either the SEc (also public data) or subpoena Amazon or its auditors.
One has to wonder so, nobody knows those details about any other company, and even less about private ones. No idea what all the fuzz is about.
It started because a few weeks ago I had a billing question and was forwarded to 6 different reps, also while being told lies about my issue. Finally, the rep asked if he could call. I got a call and it was an offshore guy who had no idea what was going on.
In its place I've been using Walmart+, there are times when Amazon is cheaper, most often though Walmart+ is cheaper, also I can get groceries delivered with rock-bottom prices. If you get the poorly named in-home service you can get as many free (no tip) deliveries to your house with groceries as you want.
As long as it's over $35.