Amazon Sticking It To Suppliers
Prime Cut: Amazon’s retail business has been willing to absorb millions in annual losses in its margin-crushing pursuit of market share. But with its fulfillment expenses rising 43 percent last year, to $25 billion, even Amazon is finally crying uncle.
TWICE Take: To sustain its price war with Walmart and other retail competitors, the e-tailer is reportedly raising its transportation fees for bulky products that are expensive to ship, and will expand the number of inexpensive products (under $7) that can’t be purchased as single-item orders.
Cleared For Landing
Prime Cut: Amazon is apparently proceeding with its plan to employ fleets of delivery drones that can fulfill orders in 30 minutes or less. The e-tailer applied for and was recently granted a new patent that removes a major hurdle from its aerial strategy: humans.
TWICE Take: The technology behind the patent will allow Amazon’s drones to respond to a full range of gestures, from the frantic arm waving of a dive-bombed bystander to the satisfied thumbs up of a customer awaiting his/her package. The drones would use cameras and sensors to recognize hand and body gestures, human voices and movement, and can deliver parcels by landing or releasing padded packages from the air, the patent shows.
It’s No Party For Third-Party Sellers
Prime Cut: It ain’t easy being a third-party seller on Amazon. The online leviathan dictates terms, can be slow to respond to sellers’ complaints, and could more aggressively lobby government officials on their behalf, the marketplace merchants believe.
TWICE Take: Perhaps the final straw came in January when Amazon quietly raised fees for some sellers and increased its cut from others. Fast forward to March, when 1,900 sellers gathered for the annual Prosper Show in Las Vegas. There, consultant Chris McCabe, a former Amazon employee, and Pace University law professor Paul Rafelson, began pitching attendees on forming a trade association. So far only about 100 expressed interest in the proposed Online Merchants Guild, whose annual fee would range from $100 to $25,000.
Toys “R” Them?
Prime Cut: With liquidation sales in the offing, some 700 Toys “R” Us locations will soon be up for grabs. But who the heck wants them? With big-box chains like Best Buy shedding stores, and discounters like Target focusing on smaller urban footprints, it may be up to Amazon to fill the void.
TWICE Take: In fact, the e-tail giant has purportedly considered picking up at least some TRU real estate, if not for additional Whole Foods, book shop or convenience store locations, then perhaps for use as localized distribution centers, which it is reportedly doing with vacant Sears stores. But if the rumor sounds familiar, it is: many were convinced that Amazon would snap up all 4,000 RadioShack storefronts when the CE chain when bust. (It didn’t.)
Just Another Manic Monday
Prime Cut: It was only three years ago that a blistering New York Times report painted corporate life at Amazon as a dog-eat-dog existence where ratting out colleagues is encouraged and around-the-clock hours are table stakes. Warehouse workers seemingly fared no better, as stories surfaced of employees passing out from heat and exhaustion.
TWICE Take: But accounts by an Amazon engineer, researcher and product manager gathered by LinkedIn tell a different tale, one of deep satisfaction and personal fulfillment from pursuing readily-bankrolled dream projects that are given room to fail. The ethos is appealing: Amazon has surged to first place on LinkedIn’s Top Companies list, and in the last 12 months its LinkedIn job postings drew 8 million applicants, all eager to join the 566,000 already on the payroll, making Amazon the country’s second-largest private sector employer after Walmart.
Amazon Quote Of The Week
“Whatever you do, don’t shoot babies.” — Amazon trainer Madeline Buchanan on a “Hunger Games” promotion that had Jennifer Lawrence seemingly aim her arrow at a diaper-modeling toddler on the e-tailer’s home page.