Comment on Facebook, Twitter, Amazon shares lose 23%, 8% and 3% in a day
iamtanmay@wolfballs.com 2 years agoEverything else is a loss leader ON PURPOSE. They sell so cheap, they lose money, but no one can undercut them and they can take over EVERY market. Its a genius strategy. They can turn off the AWS spigot and fight fair and square like everyone else. But not doing so has a HUGE advantage
Economies and negotiations of Scale. The bigger Amazon gets, the cheaper its supply will be
So by sacrificing all their profits from AWS and legacy, they keep making themselves more efficient.
Right now AMZ is the most transformative company on the planet, on par with SpaceX.
sj_zero@lotide.fbxl.net 2 years ago
Problem from my point of view is that realistically speaking, internet stores actually aren't super competitive unless you let them be a loss leader. The shipping and handling costs of an individual order are just so much higher than a brick and mortar store that the moment you need to compete, people go "Oh, that's sort of expensive" and go back to walmart.
iamtanmay@wolfballs.com 2 years ago
I bargain hunt a lot for electronics. I compare the online prices in Europe to price of ordering from China + import duties.... my observation is that generally the cheapest online stores are making ~1% profit, and that's enough for me, rather than waiting weeks for the cargo ship + inconvenience of going to the customs house to pay the duty. I think they are barely surviving on these margins.
I find electronics on Amazon to be 10% more expensive than Ebay. It only makes sense if you order many things and get free shipping.
sj_zero@lotide.fbxl.net 2 years ago
Chinese vendors have the benefit of a heavily subsidized postal system. A Chinese vendor sending something from China effectively can send a package internationally for free because they pay the Chinese half, and under international treaties it gets delivered to your house free of charge under the idea that it'll all come out in the wash because people will be sending stuff there too, but if you have ever tried to send a package yourself, you know that shipping isn't free in the West. If you resend a box that you received from amazon, you're probably looking at 10 or $20 of shipping.
iamtanmay@wolfballs.com 2 years ago
Did not know. I heard a talk from Louis Rossman (The macbook repair/right to repair guy), he tried both a quality reselling business (guarantees, replacements shipped etc) as well as the Ebay model.
He said the Ebay market is just quality gunk. Don't expect clients to return defective parts after claiming reimbursement etc etc. He end up losing his money on Ebay and shutting it down to focus on in person repair, where high quality/price is expected.