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Jeff Bezos’ letter to shareholders

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Re: Jeff Bezos’ letter to shareholders

#81
post #3

You have to love this sentence "We want Prime to be such a good value, you’d be irresponsible not to be a member."

I like being that irresponsible one. Though it is impressive that Amazon has turned a delivery fee - that most people don't like paying - into an exclusive subscription service. A service that customers fall over themselves to sign up for when it's offered at a discount.

I was gifted Prime and it surprised me how awesome it was. Say I want to buy a few pairs of SmartWool Socks, but since I'm buying them over the internet don't get a chance to try them on. Do I buy 7 pairs and risk it? No, I just buy 1 pair and get it in 2 days with no shipping fee.

In fact I buy all kinds of things now on Amazon because I can get them in 2 days with no shipping fee.

I get that I'm paying upfront for shipping, of course, which really only incentivizes me to shop more on Amazon. After a certain number of orders I'm beating the system, and that's fun.

Plus you get a lot of freebies, like movies.

Re: Jeff Bezos’ letter to shareholders

#83
post #70

From the 1997 letter that's included at the bottom: > We established long-term relationships with many important strategic partners, including America Online, Yahoo!, Excite, Netscape, GeoCities, AltaVista, @Home, and Prodigy. That takes me back.

Looking at it that way, it's kind of impressive that Yahoo! is still around.

I honestly don't have the slightest clue how yahoo stays in business. And I don't mean that as rhetoric, either. Other than Bloomberg I don't get where the money comes from. I hope it's not organized crime...

I'd probably read a biography of the company out of curiosity.

Re: Jeff Bezos’ letter to shareholders

#85

Earlier quoted context omitted.

I like being that irresponsible one. Though it is impressive that Amazon has turned a delivery fee - that most people don't like paying - into an exclusive subscription service. A service that customers fall over themselves to sign up for when it's offered at a discount.

I cancelled it because Amazon's abusing their position. Refusing to sell Chromecast and Apple TV, then lying, repeatedly, about the reason when asked? I've been an Amazon customer for 13 years. I was rather annoyed to see them go with the anti-Wikileaks and try to be "sensitive" by banning certain cultural items. But this shows they've zero commitment to selling products customers want. Edit: And it really hurts. Som…

Maybe you don't like it, and you are fully within your rights to cancel, but it is not abuse. They can or should be able to carry whatever products they damn well please.

Re: Jeff Bezos’ letter to shareholders

#87

Earlier quoted context omitted.

I know a lot of people who have left Amazon, and are very bitter about how it was to work there. I know some who are waiting out their signing bonus. I also know a lot who've left Microsoft, but they definitely have a lower average bitterness about the company.

I know a ton of people like this. 70% of the people I know didn't stay at Amazon past 4 years.

I don't rub shoulders with BigCo devs, but of all the SmallCo devs I know, the only ones that reach 4 years tenure are the ones that own the company.

Re: Jeff Bezos’ letter to shareholders

#88

I'm trying to do some math. What is the total economic value of the actual Amazon river, and how many Amazon rivers economies did Amazon.com make last year. Anybody?

"Economic value" is a slippery concept.

First off, most people read that as "price times volume", or the exchange value of some good or service. The Amazon River isn't exchanged, it has no exchange value.

Another definition of "economic value" is use value, which is to say, the benefit derived from use, possession, existence, control, etc., of some good. The problem here is that economics has little handle on estimating just what this use-value is. Some economists claim it cannot be measured or known (e.g., Ludwig von Mises), others note that it's not intrinsic but is always relative -- a property between the valuer and the valued (William Foster Lloyd in his 1834 essay on value, William Stanley Jevons in his book on money and transactions). That is, there is no absolute value.

(Lloyd's essay is prescient in some ways of Einstein's later work.)

Edwin Cannen, editor and researcher on Adam Smith notes that Smith's definition of wealth, "the annual labour and produce of the nation", specifically excludes the concept of land or mineral wealth as included in that definition. That's a recent discovery of mine in the past week or so, and I want to look into it further, but it's quite the observation.

I've been working on a couple of concepts. One is that there are really three related but distinct concepts: costs, value, and price. They're somewhat related, but through a loose mechanism.

Cost is what you give up to get something. "All costs are opportunity costs" (Krugman, Economics, 2008).

Value is what you gain by something. Individually, value is hard to measure but in aggregate you've got good percentage going off biological or ecological measures, usually of metabolism, energy, or energy-and-materials throughput.

Price then becomes a somewhat odd duck, in that it's a cost for the motivation of exchange. Ideally we'd like C Several problems introduce themselves though, and I'm going to hand wave and say "it's complicated", but for numerous reasons over the short term, price can fall well below long-term costs (the rational is similar to the logic of the shut-down point in microeconomics).

But let's go back to the cost of providing Amazon, Inc., vs. the Amazon River.

The former has an economic throughput of, very roughly, $100 billion dollars. This is an estimate, and I think I'm high here. But there's a point to this.

Turns out if you look at US GDP and energy inputs, a barrel of oil generates about $1,000 of GDP. So Amazon's revenues represent about 1 million barrels of oil energy equivalent.

I'm going to estimate that the Amazon River Basin is about 1/4 the surface area of South America (which I've got as a constant in GNU Units). It receives incident sunlight at roughly 1 kW/m^2 for 8 hours a day, or equivalently, for 1/3 of the duration of a year.

In barrels of oil equivalent, that's about 7 trillion.

Which is to say, there's about 7 billion times the cost to provisioning the Amazon as there Amazon, Inc.

If Amazon, Inc. disappeared off the face of the Earth, a few tens of thousands of people would need to find a new job, and a few hundreds of millions others would have to travel to the store or find a new eCommerce provider.

If the Amazon disappeared off the face of the Earth, odds are that an event significant enough to destroy all of modern civilisation would have transpired. One valuation of that is the roughly $70 trillion of the global economy.

I'd say the river wins over Big River Book Company.

The fact that our economic system fails to account for the relative values correctly says far more for what's wrong with our economic system than with how valuable Amazon, Inc. is, or how unvaluable the Amazon River is.

----

And checking my estimates. The Amazon River basin is 7 million km^2, or about 39% the area of South America.

Amazon's 2015 annual revenues were actually $107 billion, though profits were $1 billion. So I was less generous than intended.

Still, at 7 billion : 1 I'd argue my analysis is within reason.

Re: Jeff Bezos’ letter to shareholders

#89
post #43

He knows the importance of image and says all the right things to tug at your heart strings... they're fighting global warming, they're helping single moms, and they're running a startup-like environment unlike the other big evil corporations.

It blew my mind that his example of helping a single mom of EIGHT was her getting trained as a long haul truck driver. Who's taking care of that many kids while she's gone? Truck driving is not that well-paid, and the length of absences is right there in the job title.

His example is a subtle jab at working class. He thinks people are such trash that truck driver is aspirational for them. The education benefits for blue collar workers at Amazon take years to kick in and don't cover a single year at most community colleges. Workers are frequently fired before 90 days to prevent benefits from starting. Workers would do far better to do a small education loan and start training early.

Re: Jeff Bezos’ letter to shareholders

#90

Earlier quoted context omitted.

I like being that irresponsible one. Though it is impressive that Amazon has turned a delivery fee - that most people don't like paying - into an exclusive subscription service. A service that customers fall over themselves to sign up for when it's offered at a discount.

I cancelled it because Amazon's abusing their position. Refusing to sell Chromecast and Apple TV, then lying, repeatedly, about the reason when asked? I've been an Amazon customer for 13 years. I was rather annoyed to see them go with the anti-Wikileaks and try to be "sensitive" by banning certain cultural items. But this shows they've zero commitment to selling products customers want. Edit: And it really hurts. Som…

Wow, TIL Amazon doesn't sell Apple TV or Chromecast, but instead immediately suggests their own competitors. For a company trying to replace all retail, that's pretty lame.
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