Sunday, October 23, 2022

Adios, Amazon!

Websites become popular and then fade from view.  Will this happen to Amazon?

Websites are funny in that you become obsessed with one and check it out every day.  Then you use it less and less, and then forget about it entirely.  It is like your favorite sweater - you wore it all the time, and then one day, years later, you find it in the back of the closet and say, "Oh, yea, I remember this.  I wonder why I stopped wearing it?"  And you put it on and it doesn't fit and it is frayed and pilled and has burn mark on it and you go, "Oh, yea, now I remember!"

Amazon, like Facebook, or Google is a website.  Yea, they sell things and have warehouses and trucks and stuff, but the main thing is that it is just a site you visit - or visited - and over time, these get stale, particularly when they start to take on the air of a carnival barker.

Early on, Amazon was a lot of fun - you could find things for cheap online and they were shipped quickly.  The whole "kindle" thing was sort of a bust.  You could find old books and compilations (the complete works of Shakespeare!) for 99 cents.  But the big publishing houses, early on, wanted $29.95 for an e-copy of a best-seller.  Might as well wait for it to come out in paperback.

Or, as I did, rediscover the local library, where everything was free.

Over time, Amazon became a retail colossus - almost bigger than Walmart - and of course, the largest retailer on the Internet. The book business sort of became a tiny part of this - who reads anymore?  Certainly not the Qanon people or the Trumpers.   I mean, they read 4chan, but that's about it.

And over time, the retail part got shittier and shittier.  In typical Silicon Valley fashion, they "got big, fast!" by selling at a loss  or by breaking even (or at very low profit margins).  Once people got hooked on "one-click buying" and "Prime" (which was not a real bargain) they slowly raised prices to the point where, today, Amazon is no real bargain at all.

When I buy something online, I open a number of windows, and odds are, there is a cheaper source out there than Amazon - often from the manufacturer's website.  Amazon's weird pricing algorithms (which change prices in real-time) are a turn-off as well.  One reader reports that if he leaves a product in his Amazon "cart" but does not buy it, he will get an e-mail in a day or two advising him that the price has dropped.   Wait a few days, and it drops further.  Amazon has all the charm of a used car dealer!

So I stopped going for the most part.  The chart above shows the number of orders I made with Amazon over the years and in recent years, it has declined a lot.  I bought everything from tires to books to tools to a hot tub (which turned into a real shipping headache - and they lowered the price right after I bought it!).  Amazon just left a bad taste in my mouth.  The last "big purchase" I made was a rechargeable circular saw, and the only reason I went with Amazon is that I could get next-day shipping by signing up for "Prime" (and then cancelling it the next day once the item arrived) as we were rehabbing the condo and I needed to cut down some doors to fit the carpeting.

If I was to buy the hot tub again, I would go directly to the manufacturer's website.  Tires?  I have found 100 places online that are cheaper and have just as good service, if not better.  For the most part, I have just given up on Amazon.

Others, well, they are shopaholics.  I know people who just go on Amazon and buy shit they don't need, simply to get a dopamine hit.  It is sad, really - they fill up their houses with junk like a hoarder, but it is all brand-new junk, some never leaving the boxes it came in.  Yes, people do this, get into intractable credit card debt, and then blame Joe Biden for their personal problems.

Of course, the less I use Amazon, the harder it is to use it.  I log on and they've changed the site, or I have to scroll through pages of offers for Prime or whatever.  What was the password, again?  I'd better look that up!  The less engaged you get with a site, the less you use it, until you stop using it entirely.

When a site becomes toxic - like Amazon is becoming (and PayPal already has) then you tend to stop using it entirely.  No, I am not interested in buying "crypto" through PayPal, thank you very much!  But they keep pushing it, the few times I log in, which is why I do not have any bank account or credit card linked to PayPal.  It just isn't safe - or doesn't provide a feeling of safety.

By the way, speaking of PayPal, I got an e-mail the other day that did NOT go into my SPAM basket, and it was  pretty well done.  The return address was and it was addressed to me.  It said an "estimate" for a new iPhone had been made and maybe my account was breached - call this 1-800 number if you wish to contest this!  It had all the graphics and everything down to the last detail - not even any typos or British English in it.  The only tip-off was the salutation to someone else's name.

Of course, I did not click on the internal links, but out of curiosity, checked my PayPal account and sure enough, the balance was still $4.  Kind of hard to steal from someone who is broke, eh?

But getting back to Amazon, a reader sent me a link to a book he wrote and I wanted to check it out.  I tried to click on the "free" button, but that wanted to sell me "Kindle Unlimited" for free (one month) or $4.99 for three months, going to $9.99 a month after that.  $120 a year to read "free" books - no thank you!  I get a lot of books from the local lending library and even the church has a book exchange - and campgrounds as well.  And there is the public library, too.  Nice try, Amazon.  No sale.

So I paid the 99 cents for a kindle copy.  I tried to load it to my ancient Kindle, but it no longer supports the Amazon store.  I was able to order it on the computer and have it delivered to the Kindle.  Reading a book on a phone just isn't an option!

But all of this got me to thinking, "Gee, I haven't been on the Amazon site a lot lately!" and maybe part of this is we are spending less because, you know, the invisible recession no one is talking about.  Maybe part of this is that we are just buying less "stuff" than we used to (like most Americans, we are already drowning in stuff - I don't need more!).  Or maybe part of this is just that Amazon has no real bargains anymore.  Like I said, for many things I find better deals on manufacturer's sites, in the store at Walmart, or on eBay.  Amazon usually comes in a distant last, in terms of pricing.

eBay doesn't have historical ordering data for me, but for the last two years, I ordered 28 items on eBay in 2021, and 34 items so far in 2022.  My purchases are going more toward eBay than toward Amazon.

With the labor unrest at Amazon, it isn't hard to see that this isn't going to get better over time.  Bezos squeezed his employees as much as possible, treating them like robots and paying them squat.  Maybe in 2010 when unemployment was high, you could get away with that.  But one by one, the distribution centers will all eventually unionize (odd the union has to do it piecemeal this way - or is it by choice?) and as their operating costs escalate, so will prices.

There are noises about Amazon closing distribution centers and not opening ones they recently built.  They are blaming this on the pandemic, or more precisely, the end of the pandemic.  People are moving back to brick-and-mortar, so Amazon doesn't need so many distribution centers, they claim.  The reality is, their sales are down, and the actual reason could be the pandemic thing, or maybe people are just tapped out with the inflation and all, or maybe Amazon's prices are just too high.

Or maybe, like any website (and it is a website) people just tire of it and latch on to the next big shiny trinket dangled in front of them.   Facebook is facing a similar problem - once the only social media site, it now has to compete with Tick-Tock and Twitter, and increasingly for young people, YouTube.  Every site has its day in the sun and then fades to oblivion, it seems.  Usually it is because the site owners (or the people they sell the site to) decide they need to make more profits, so they pack it with ads (or in the case of Amazon, raise prices) and people turn away.

Will Amazon go broke?  I doubt it.  But then again, they have a lot of infrastructure to support and have grown rapidly.  Any decrease in revenue could be problematic for them.  Remember that closed distribution centers have to be paid for, even when they are empty and not making money for the company.  And as the world's largest private employer, they have a lot of overhead as well.

I mentioned before that one reason my MLM schemes are a bad bet is that any enterprise that is predicated on selling stuff you could buy anywhere is going to be a game of margins.  You sell a product for a dollar and the guy across the street cuts his price to 99 cents.  It is the great American game of capitalism - which sometimes works to the advantage of the consumer (provided the consumer plays his only hole card on occasion - not to consume).

There was an "old joke" posted online today that illustrates the problem for mercantile endeavors: 

A supermarket opened up next to a small grocer and to show how much cheaper they were put a big sign out the front advertising butter.

The grocer used to sell butter for 50p a packet, but the supermarket advertised it for 49p. The next day the grocer put a big sign on the front saying:

Butter: 48p

The supermarket couldn't afford to lose face so the next day it was loudly advertising:


However the grocer soon changed his sign to

Butter: 46p

This went on for days until the supermarket was advertising butter for ONLY 10p but the grocer still beat it:

Butter: 9p

The supermarket owner was now losing a lot of money by selling butter this cheap and went next door to the grocer to see if they could work out a deal. However the grocer wasn't too concerned and didn't want to. The supermarket owner said "I can't understand how you can survive selling butter this cheap, I pay 40p each for it and so I'm losing 30p on every sale!".

The grocer said "Oh, I'm only losing 1p on every sale, I just buy it from you".

You see the point - selling stuff just isn't all that profitable - not compared to making it.  And maybe that is why Amazon is expanding outside of its merchant roots.  The new center in Crystal City (in my old Patent Office digs) isn't selling crap online, it is selling computer services to the Pentagon.  Because while Amazon may be the world's largest private employer with 1.5 Million employees (by some counts), the Pentagon has it beat handily with 3.0 Million.

You go where the money is.  Maybe in 20 years, Amazon will just be another defense contractor.

Weirder things have happened.  At one time, Sears, Roebuck (remember them?) was the largest retailer in America.  But like so many other retailers over the years, it went bust.  IBM used to be the largest computer maker.  GM the largest carmaker.  Times change, and no one stays on top forever.

As for me, I doubt I will be running back into the arms of Amazon anytime soon, unless their stop acting like chiselers on their website and their prices come down.