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Has Amazon become a monopoly?

Discussion in 'Business Models, Niches, Industries' started by MJ DeMarco, Jul 27, 2018.

  1. MJ DeMarco
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    MJ DeMarco Raving Lunatic Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    Interesting. To back this up, Kroger recently bought Vitacost (a mid-sized vitamins/grocery mail order company) and I use them often, like weekly.

    They are cheaper than Amazon, offer 1 day shipping, and have light years better service. So in this small realm, Amazon is being beaten.
     
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  2. MJ DeMarco
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    Aside from the political undertones, it does shed some light on how Amazon treats its employees.

    I'm all about capitalism and getting rich, but not at the expense of treating people like dirt. Again, it's all a facade. Amazon treats customers like GOLD, but everyone else in the supply chain can go F-themselves. If you're a supplier and ever had to deal with their so called "customer service", you know what I'm talking about.

    Jeff Bezos's $150 Billion Fortune Is a Policy Failure - The Atlantic

    On a Fastlane "money system" note, Bezos would have to spend $28,000,000 a day just to stop accumulating wealth. Now that's some passive income!
     
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  3. andrewsyc
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  4. RB96
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    Its absolutely crazy but as a Consumer I love Amazon but from reading whats been written here it is scary what disruption power Amazon has!
     
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  5. njsinko
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    Amazon is good at one thing: Logistics.

    Amazon will be beat eventually when someone else can figure out how to deliver products faster then they can from the retailers who sell them.

    This sounds crazy and far fetched, but remember those systems of suction tubes from the Jetsons? You put something in the capsule, and it delivers it instantly through a network of tubes? Make that happen and have one going to every house in an underground network and amazon will be obsolete.
     
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  6. jmusic
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    True, but the same can be said about USA's collective decision to outsource manufacturing to China. In the short term we've benefited hugely from it, but I believe we're reaching the end (if we haven't already) of the benefits of that strategy. Not to mention the fact that we've totally shafted the blue collar worker over the last 50 years.

    Circling back to the Amazon debate, that's why monopolies are so dangerous. In the early stages all people see are the benefits, but when ZERO competitors are left because they've all been run out of business, the last man standing is free to charge whatever he wants!
     
  7. jmusic
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    Holy crap that sounds expensive. I doubt even Apple with their $1T market cap could afford that. If anyone does it first it'll BE Amazon.

    I think if 3D printers get much more advanced they could disrupt SOME of Amazon's business model... until they get bought out.
     
  8. GPM
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    GPM Gold Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass Summit Attendee

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    I am guilty of feeding the machine. I order nearly everything online, and probably 90% of my online purchases are made at Amazon. It is people like me who give them all this power.

    I get all my physical books from thrift stores, but >90% of my purchases are digital through audible or kindle.

    I get my groceries from Costco, and my major computer supplies from a small local vendor that I like to support. Other than that nearly everything I purchase is off of amazon. I like not having to leave my house, fight traffic, and then wander store isles looking to find what I want. I can get out of my phone or hop on the computer and just click a few buttons and have it show up the next day.

    Amazon tells me I have 33 orders so far in 2018, 65 orders in 2017, and 58 in 2016. I don't see myself moving away from the platform either. But at the same time they do scare me. Hmmm... Is this like the Americans that complain that Mexicans are stealing their jobs, and then go to the corner and hire them as soon as they need labor done?
     
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  9. 0dysseus
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    Amazon will become the ultimate monopoly, the final manifestation of hyper capitalism. Seems like they can win at everything they enter, and I believe it is inevitable that they get into beef with the other giants (and win).

    No other company has managed to succeed in branching out as much as Amazon, even with all the gimmicks and crazy startups that Google and Facebook acquire they are still a one trick pony - online advertisement platforms. Amazon are much more "offline", which is so much harder to achieve when you think about it. A few years old SAAS can easily dominate a niche worldwide, for a company to dominate offline, well, it has to be like an oil conglomerate controling men with guns...

    Alexa has the potential to destroy Google, and it ultimatelly will.

    Facebook's Marketplace is a move on Amazon. Not sure how Amazon will respond. My personal opinion is that Amazon will release a phone-like device, trying to push Amazon owned apps.

    Weirdly, I think that the giant most resistant giant to Amazon is Microsoft. They seem to be making the right moves, especially with LinkedIn and Github. Still, I'm sure Amazon will find a way to devour them in the future too.

    Their end can only come from a blockchain entity that will be somewhat publicly owned and reward users in some hybrid model between capitalism and UBI. Otherwise we all end up working somewhere in and for the Amazon world.

    Ok, I know, this is a little scifi, but it's fun and I think there could be some truth in it :)

    Cheers
     
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  10. Walter Hay
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    I know this is a side track from the thread topic, but greed was the basic reason for the move, not only by the people of the USA, but every western country to shift manufacturing to China.

    The benefits (greed for lower cost products) have been largely ephemeral and illusory. Chinese suppliers have been able to dominate large parts of the market to the extent that they have for a long time been calling the tune on price and quality. This is part of the reason for Taiwanese companies, who years ago set up factories in China have been steadily shifting production to places like Vietnam, Cambodia and Bangladesh.

    It's also part of the reason for the re-shoring that has been gathering pace in recent years, whereby manufacturing has been steadily shifted back to western countries by the multinationals who began the stampede to China.

    In many cases the presumed and expected cost benefits were not there in the first place. Production of many low labor cost products was shifted to China without good reason, and I have been in factories where I have seen automated machinery being used that I knew was imported second hand from the factories in the USA, Australia, UK where it had been successfully churning out relatively low cost products.

    One side effect of the crazy move to ship jobs to China, was the loss of quality. The concept of quality was not well understood in China and they have been slow to learn it. I demanded high quality and got it when I first started importing from China in 1987, but it was a constant battle to maintain that high standard.

    Efforts to train Chinese manufacturers in the value of producing quality goods was severely hampered by big retailers demanding lower and lower prices. They got them, but they also got lower and lower quality.

    Just consider the high return rate on some products carrying famous old brands. How much have they really saved? Mind you a lot of those famous brands have surrendered and sold their trademarks to Chinese companies without any publicity.

    Walter
     
  11. Denis from BE
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    Unfortunately everything is made by Amazon to keep customers buying via their plateform whatever you need to buy. As a customer point of view it's a very nice service, but on the hiden side...

    Making business based on system like Amazon or Uber shouldn't be a good idea in long term. Their policy are too unrealiable and with big impact. (especially if main income stream come from it)

    I'm very curious to see it how will go in the next years when Zozos will get more & more power on every industries. How this guy can sleep ?
     
  12. Caroleen M
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    Caroleen M Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    MJ,
    They have done the same when it comes to Amazon Prime. Which means that my title's 'watch time', thus earnings will be lower than what it used to be. Same here with making a rotten deal sound like they're offering you fresh honey on a silver baby spoon: apparently the "upside with international sales will wind up being much more lucrative for content producers" stated the email.

    Problem is, if this is even true, we might be looking at years before we see any of those returns as Amazon is only just starting to make a dent in the international marketplace (think Europe, excluding the UK where they are reasonably-well established). {Sigh.}
     
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  13. Vigilante
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    Vigilante Legendary Contributor Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    People said the same thing about Walmart. I say laissez faire.

    Walmart has been a net gain for America, and for consumers. Has there been a toll? Absolutely. However, as a pure Capitalist, what benefit would it serve to stifle Amazon? They provide what people want, and how they want it. If they didn't, someone else would.

    Let the market decide, and let Darwinism win.

    @Kak where you at? Take a break from your empire building monopoly to comment.
     
  14. GoGetter24
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    GoGetter24 Silver Contributor Speedway Pass

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    I'll always buy from a local supplier if I know one that probably has the thing I need, and is within 30 minutes drive. Amazon's primary power has always been as a "thing search engine".

    If someone could provide a service to easily unify stock record keeping and description info, with a geographic search engine, and get local physical retailers to take it up in any serious kind of numbers, it would deliver a hefty whack to Amazon & co.

    When people have the option between "wait X days for it to be delivered" and "walk a couple of blocks over and get it right now", they'll choose the latter. Unless we're going to pretend the skies will be roaring with the sound of swarms of Amazon delivery drones: which isn't going to happen.

    Until they actually do that. Then competitors come back.

    My favourite story about monopolies was Dow Chemical. The big German chemical companies tried to drive him out of business in Europe by selling chemicals below cost. He simply responded by switching from selling them to buying them :D
     
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  15. Kak
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    Left to its own devices, Amazon will retreat eventually, giving some way to new and more exciting entrants (to both investors and consumers) to emerge.

    There will come a day when the price-to-earnings comes down to a healthy 20-30... Amazon can simply can not sustain this. They're no longer going to be paid handsomly to expand at this pace. Opportunities for competition will emerge.

    Clearly it isn't happening right now, but it will. Good for Bezos honestly. I applaud his success.

    In the interim... Let it ride. There is no such thing as too big unless it's the government. The beauty of capitalism is that these things will self regulate.
     
    Last edited: Sep 2, 2018
  16. ChrisV
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    Good... let ‘em do it. It will just open up a space where one of us can jump in and take it over

    Remember what happened when eBay started getting greedy and boosting their fees?

    Oh yea that’s right. Amazon took over ;D Amazon used to be in second place until eBay f*cked up.

    So let them do whatever they want.

    Honestly I think that the ideas of monopolies is kind of BS. In theory it sounds scary, but when a company is so f*cking awesome that everyone goes there.. it’s just because they offer an awesome service or product. Like when people were calling Microsoft a monopoly in the 90’s, were they really a monopoly? Apple still made computers. But Microsoft was the best (AT THE TIME... i dont think so anymore,) and since they were the best, that’s what people bought.

    I think we’re trained to believe monopolies are bad and wrong from an early age and look at them as they’re evil, but in reality of course everyone is going to go to the company doing the best job. Google has a monopoly on Search Engines imo. Why? Because everyone else sucks. If anyone wants to beat Google at search, the way to do it is simple: stop sucking so much.

    I mean at the end of the day whoever is offering the most value for the best price is gonna be the winner. No one is stopping you or me from creating a company that’s better than Amazon. Yea, it’s a tall order, but that speaks to how great Amazon is as a company. The fact that it’s really really hard to create a company better than Amazon doesn’t speak to their evilness, imo, it just speaks to the fact that they deserve their success. No one holds a gun to our heads and forces us to buy Prime. We do it becasue it used to take us weeks to get our orders. If someone started offering 1-day shipping and all the other benefits, Amazon would go out of business in an hour.

    Bottom line is if Amazon starts pissing people off, it’s simply going to create an void in the market. It’s going to create a problem that I’m sure many many companies would be more than happy to fix.
     
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  17. ChrisV
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    And all beating Amazon is easy. All you would have to do is get really accurate statistics on who are buying what products. Using Data Science and predictive analytics, you predict how many of a certain product every town is likely to buy. You store your products in those places, so that it can be shipped to the most likely location as fast as possible.

    In other words, with predictive analytics we can guess with 95% accuracy that 300 people in New York City are going to buy this specific Potato Peeler. So you just store 301 in New York City.

    With that 1 day shipping would be possible, and once drone technology is more viable, it will be 1 hour shipping.
     
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  18. ChrisV
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    Yea +1
     
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  19. The Abundant Man
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    [​IMG]
    -Disney Pixar's WALL-E
     
  20. Geekour
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    Amazon's growth is scary. They made one of the biggest purchases acquiring Souq.com for $580 million. Souq is the eCommerce mogul of the middle east and now it is owned by amazon as a subsidiary. The founder of Souq, Ronaldo Mouchawar, has a story filled with inspiration and tragedy. His parent's were murdered while he was in college or living abroad. You won't read this online as it is personal and only those that grew up in the same town know his story. He was my relative's classmate and they played basketball together long ago in their youth. I can't imagine the strength required to make it to where he is now. All people see is how big amazon is but let's not forget the smaller companies and services amazon acquired to grow to what it is today. Hell, serving amazon would be a business endeavor in its own right. Also Whole Foods is giving discounts to Prime members now, I believe that's recent too not sure about that one or when it started.
     
    Last edited: Sep 3, 2018
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  21. ruzara5
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    Amazon is a big target. Layers of Big Business and Big GOV have a method. In time. Others in the upper echelons find better strategies and opportunities. Like takeovers from 'activist investors' and major shifts that cannot be ignored even eventually by the fat cats. When they get missed and ignored. It is opportunity. Which at one time. When the 90's were groovin in Seattle. Bez was a another grinding entrepreneur with some quality connections. Market history shows like MaBell and Big Standard Oil, Kodak, etc. Change is inevitable. Chopping up the leftovers means the market will keep feasting.
     
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    You guys talking about laissez-faire economics don't know what you are talking about. Nothing about amazon's rise to monopoly power has been "laissez-faire".

    If there is one thing amazon has done well, it's use the government for their benefit.

    Amazon's shipping costs are subsidized by taxpayers. That's right, you and I are paying our taxes so that amazon can undercut competitors and sell for such a low cost.

    If you believe in laissez-faire and the free market (as I do), then you should be very concerned with what amazon is doing, because it is the farthest thing from the free market.
     
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  23. Nik@16
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    Dude , All these articles are written by novices. Especially on Medium. It doesn't mean a thing and pitying and compassion is a bullshit idea the author is promoting. All I learned is that only the paranoid survives.
     
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  24. Nik@16
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  25. MarkTheNatural
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    My thoughts are.... have I missed the wave to invest in Amazon?.... or should I consider investing now?
     
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