Wednesday, July 15, 2015
Amazon Resorts to Hucksterism
The entire point of buying things online is defeated when you "shop".
Amazon is losing money. And that is not a good sign. After all, you'd think one of the world's largest online retailers should be making a bundle, right? Well, last year, it made 18 cents a share, so I guess that's something. But at today's share price, that is a P/E ratio of 2570, which is staggering. By the time Christ comes back in 2570 years, you'll have made back your investment in Amazon stock, at this rate.
So, they have to gin the numbers somehow. Just selling stuff online isn't very profitable. Why not take a page from WOOT! and offer "limited time specials" and induce people to buy things they really don't want or need? At these prices, you can't afford not to buy, right? (just in case you missed school, the correct answer is "wrong").
It is bad enough that Amazon is pushing this lame "Prime!" deal, where they try to trick you into signing up for a monthly subscription fee, in order to "save money" on things you buy at Amazon. Of course, the gag is an old one - rake in subscription fees from folks who don't notice small charges on their credit cards, and of course, use negative option to make it hard to un-subscribe from these deals.
These sorts of shenanigans are what is making me less and less inclined to buy on Amazon. eBay already has sort of burned its bridges with me - you buy things there, you basically are taking a 50% chance you will never get the item, or the item will not be as described - and you will have no recourse whatsoever. PayPal has similarly shot itself in the foot, by trying to trick people into signing up for PayPal credit cards by making the checkout window confusing and hard to use. eBay and PayPal are splitting up, which is not a sign they are both doing well.
At least Amazon was reliable and the prices were reasonable. What is wrong with that selling model? Instead, we get hucksterism.
And no, things sold through hucksterism are never a good deal at all, period.
Why is this? Well, as I have noted time and time again, good deals present themselves. A solid product at a good price doesn't need hype to be sold. It sells out in short order. On the other hand, marginal products at iffy prices require a lot of flim-flammery to sell.
Will someone get a "good deal" at Amazon's "Prime Day"? Maybe. Someone will crow they bought a $599 television for $299 and "saved" $300. Of course, as we have talked about here, time and time again, that "savings" are what you put in the bank, not false "discounts" from arbitrary "manufacturer's suggested retail price" numbers.
So no, they didn't "save" $300. If they did, they would buy 1,000 of such television sets and re-sell them on eBay for a $300 profit each and make $300,000 in one afternoon. The reality is, they bought a $299 television, and we know this, because that is the price they paid for it, and only a fool would pay more.
It is sad that Amazon has gone this route. They were sort of one of the good guys on the Internet, offering decent products at reasonable prices, as well as a great resource for online e-readers. Perhaps the rise of the iPhone and iPad are cutting into Kindle sales and e-book sales at the site. The iPad has already killed off the Nook, apparently.
But as this latest venture isn't a move in the right direction, I think. It is just a descent into retail hucksterism hell. And sadly, very few companies turn around once they go in this direction. There is apparently new management at Amazon, and their ideas are more about how to screw the consumer than to just offer decent products at decent prices.
The are no "bargains" on "Prime Day" - and no, I will never, ever sign up for "Amazon Prime" no matter how they try to trick me into doing it.