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Can we as a society really afford businesses like Amazon.com and Walmart?

VirtualLarry

VirtualLarry

No Lifer
I ask this on the eve of geeks.com closing, one of my favorite online spots for discount closeout and refurbished electronic gear.

http://www.geeks.com/

Geeks.com Ordering Is Being Turned Off...

As of today, Friday, August 2nd, 2013, we are turning off ordering on Geeks.com.

There are many why's... The e-commerce landscape, as well as the consumer electronics market, has changed dramatically with intense competition and a 1000lb gorilla (do we really need to say who) competitor that can lose millions of dollars to buy customers and suck up inventory. They can lose money with impunity, supported by the stock market. We cannot.
The Geeks Team
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In their closing message, they hint that one of the reasons that they are closing, is Amazon.com (but not by name).

A company, that by any rational means should no longer exist.

They haven't made a profit, in their 9 years of existence. They are subsidized by their investors, with the (apparent) sole purpose of putting every last little B&M reseller out of business.

A friend of mine, thought that if a business was run for more than a certain time, and wasn't making a profit by that time, it would have to be shut down by law.

I personally thought that unfair competition laws should be able to prevent amazon.com's "dumping" of goods into the marketplace, selling things (especially books!) at prices below cost.

But apparently, the Obama adminstration loves Amazon.com.

I found an article about working conditions in one of Amazon.com's warehouses. It appalled me.

http://articles.mcall.com/2011-09-1...7_1_warehouse-workers-heat-stress-brutal-heat

Jaron Lanier talks about the perils of "Winner take-all capitalism" on society. Firms like Amazon.com.

http://www.salon.com/2013/05/12/jaron_lanier_the_internet_destroyed_the_middle_class/

And just to drag in Walmart.com, another large corporation, that largely abuses both its labor force, and society as a whole, to exist.

We've all heard about how Walmart keeps their employees part-time as much as possible to deny full-time benefits packages, how WM employees often have to go on medicaid to survive and have medical benefits, etc.

Can society exist like this? Shouldn't we have a living wage?

What about the recent article about McDonald's, that they could pay a living wage if they increased the price of their Big Mac like $0.68 or something around that.

http://www.newser.com/story/171794/if-mcdonalds-doubled-wages-big-macs-rise-68-cents.html

Would you pay slightly more for a hamburger, in order to know that your fellow man could make it on this earth?

At what point, does society as a whole, fight off these predatory and exploitative corporations? In my mind, they are like a cancer, feeding off of the older, "living" tissue of society, but not producing "living" cells, instead, their cells feed, but don't grow the benefits of living tissue.
 
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Well, Walmart has 14% of the grocery market in FL vs Publix's majority, 52% IIRC... which means that these big corps will eventually change or fail.
 
Another thing to consider: what would it take, for AMZN to become "too big to fail"? If it became the sole source of books for the US economy? It scares me to think about a future like that, with some sort of quasi-governmental source for printed information.
 
Ummm Amazon has made profits during plenty of quarters over the years. They'd have bigger profits but they have a tendency to (over)spend a shit ton of money on projects and to a lesser extent aquisitions instead of hoarding cash.

People forget amazon is more than an etailer as they are one of the leaders in the web services market, as well as cloud computing, and a bunch of othet shit. They have also for years had a corporate structure that had multiple independent subsidiaries for their distribution centers so not all their profit hit the AMZN balance sheet.
 
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Anarchist420 said:
Well, Walmart has 14% of the grocery market in FL vs Publix's majority, 52% IIRC... which means that these big corps will eventually change or fail.
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Nationally Walmart is the biggest grocer. And Walmart announced its intention to have a significant buildout of new stores in Floridian back in April.
 
Walmart? I don't think so.

Amazon? Why not? They offer services people use, and make money at it. They abuse the legal and tax systems, but that's any big company.

Geeks.com sold used/refurb/off-lease computers and parts, mostly. I've been a customer for years, from back when they were computergeeks.com. Until just a few days ago, they were the only surviving store like theirs. others had come and gone--or had come, been bought, and went to Hell under the new ownership.

The economy sucks, and used prices haven't gone down that much, because businesses have been lengthening their upgrade cycles, and individuals have been keeping their PCs until they break. If there weren't Amazon, eBay, or Tigerdirect (they have a pretty good used selection), yeah, maybe they'd be in better shape, but eBay and Amazon are PITAs to browse, and the prices aren't much better, if at all.

It sucks, but they aren't a victim of Amazon; but a victim of our economy staying depressed, for the most part. I'm not saying having Amazon wasn't a factor, but there's no way that would be enough to drag them under, if they weren't already facing other competition and a sluggish economy.

bradley said:
Wow, this just made me so sad. I remember shopping with them around 1996-7. RIP online business.
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I remember shopping there just a few months ago; but have been doing so since sometime before 2000.

VirtualLarry said:
Another thing to consider: what would it take, for AMZN to become "too big to fail"?
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Networking with the good ol' boys clubs. "Too big to fail," simply means that the gravy train for those that should let it fail might stop. If it's too big to fail, it's well past time it should have been either broken up or nationalized.
 
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Cerb said:
Geeks.com sold used/refurb/off-lease computers and parts, mostly. I've been a customer for years, from back when they were computergeeks.com.
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Yeah, I bought some 300 some odd MB micropolis 50 pin SCSI drives back in 1998 or so from them, to name one thing.
 
VirtualLarry said:
Another thing to consider: what would it take, for AMZN to become "too big to fail"? If it became the sole source of books for the US economy? It scares me to think about a future like that, with some sort of quasi-governmental source for printed information.
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I've seen a statistic that over 90% of independent bookstores have closed in the US, and that was years ago.

They can't compete with people coming to their store to browse, finding a book they like, then going home to order it cheap on Amazon.

Of course, added to the various issues has been Amazon's freedom from sales tax local stores have to charge - which is only now changing for some states.

I've been very supportve of ending that additional unfair advantage for Amazon over local retailers.

It started out as assistantce to help get the internet going - but ending it after it was needed was not easy, perhaps because of radical political opposition to a 'tax increase'.

But pressure was brought to bear and that has started to change at least.

Amazon reported does a third of all internet sales in the US, and has been doubling in size every year for years. People don't have a good understanding of problems with 'too big'.
 
I think one of the government's basic roles in the economy is to preserve competition.

Some people seem to think that capitalism means 'the best guy wins, and if that means he puts everyone else out business he's so good, good for him!'

I've said that monopoly is capitalism's acchiles heel; the system fights for monopoly, which would be terrible for consumers and society, and the only think preventing monopoly is some sort of government action. Otherwise, the advantages of size and capital would allow the biggest to destroy the smaller.

Capitalism that works for people is capitalism with competition. Competition is what drives innovation, efficiency, keeping prices down, helping consumers.
 
Craig234 said:
I suggest you contact their execs and correct them on why they are shutting down.
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Did Amazon send them a a handful of wise guys with baseball bats, to, you know, let them know they weren't welcome, anymore? Amazon mostly sells products and services, makes money on them, and invests additional money to try to plan for their future. The very linked article, FI, worries overly not about Amazon's business, but what their business spending is returning to arbitrary third parties that typically have some interest in destroying the business, as long as it makes them a buck (fickle shareholders). As time goes on, if Amazon doesn't use its profits to buy enough of itself back, then it will either become irrelevant, or implode, by the same forces that helped it get flush with cash for a small slice of time after the IPO.

Amazon is but one source of competition. eBay vendors are another. Newegg is another. Tigerdirect is another. Local Craigslist sales another. Some "recycling" outfits go out of their way to make deals with businesses that regularly get and discard used electronics, as well.

Did all the sellers on eBay have no effect on them? Did the rise of Craigslist have no effect on them? Did the recession have no effect on them? I don't doubt that Amazon had a part to play, and may have been the last straw, but them as a source of downfall I very much consider a convenient finger to point.

10-15 years ago, there were many stores like them. Then there was basically them and Retrobox. Then, Retrobox went downhill, and left us, leaving only Geeks.com as an individual seller of such goods (as opposed to a symbiotic eBay vendor, FI, where every item page links to similar items from other vendors). I would have loved to see them survive the recession and flourish once the economy gets back on its feet, in spite of our executives and legislators, but it is not to be.

Craig234 said:
I think one of the government's basic roles in the economy is to preserve competition.

Some people seem to think that capitalism means 'the best guy wins, and if that means he puts everyone else out business he's so good, good for him!'
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That I agree with, though I would even change it to healthy competition. If competition is beating everyone down, something is wrong, even if there's plenty of it (Chinese electronics makers exemplify this). If competition cannot be kept, in a way that provides a net benefit to the population, then either regulations need forming or adapting, or whatever it is needs to no longer be allowed to operate in a fully private manner (you know, the evil S-word).

I just see Amazon as one of many such threats, and it's taken all of them over the course of many years, to finally bring the company down. The landscape has changed, and in many ways not for the better.
 
VirtualLarry said:
http://www.slate.com/blogs/moneybox...xist_but_the_company_keeps_on_keeping_on.html

That's not the article I originally read, but it's a commentary on Amazon's business practices, and it mentions lack of profit.
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The article is consistent with the theme of what you are saying, but doesn't support the extremes to which you are going.

And the pattern Amazon is following -- ploughing back all of their profits into the business and acquisitions -- is a common one. They aren't unique in that way.

I'm sorry the online shop you like went out of business. I'm an avid Amazon customer for a simple reason -- I get exceptional value and service from them. Being in a rural area, they are often the only way to get things I need, and I can get them in 2 days (often 1) with free shipping. Their reviews are more valuable to me in most cases than the in-person shopping experience, and their prices excellent.

Craig234 said:
I've seen a statistic that over 90% of independent bookstores have closed in the US, and that was years ago.

They can't compete with people coming to their store to browse, finding a book they like, then going home to order it cheap on Amazon.
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And I specifically don't do that. If I shop for something in person, I buy it from the store where I found it.

But I never went to bookstores. I do use Amazon. Because again, I can get much more useful information about whether or not I want to buy a book from Amazon than I can from a local bookstore, and it's more convenient and cheaper as well.

I hear a lot of buggy whip manufacturers went out of business at the start of the 20th century. Adapt or die.
 
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My first online purchase ever was a new hard drive from computergeeks.com (still have the bumper sticker), but I haven't bought anything from them since about 2000. Why? Newegg, better selection, better prices, better service, and free 2 day shipping (at the time).

I think Newegg had a lot more to do with geeks closing than any other vendor. Think how many online computer parts stores have disappeared since they came on the scene.
 
Indie bookstores and music shops:

Borders and Barnes & Noble killed off most bookstores before Amazon showed up. Blaming Amazon is picking the wrong target. Tower Records and other chains killed off the indie record stores.

Amazon put the hurt on Borders and B&N for two reasons, both valid and non-abusive:

1) They do not need to charge you extra for running a brick and mortar store with a lot of wasted space and employees sitting idle, or for the extra steps to move books and CDs between warehouses and those stores. They can make the same amount of money while charging less.

2) They offered a massively larger selection. A store might carry 40,000 books while Amazon offered millions, the same with CDs. I can remember going into a B & N to look for a new book and not finding it because they hadn't bothered to stock it. And going into a Tower Records and not finding the CD I was looking for.
 
DaveSimmons said:
Indie bookstores and music shops:

Borders and Barnes & Noble killed off most bookstores before Amazon showed up. Blaming Amazon is picking the wrong target. Tower Records and other chains killed off the indie record stores.

Amazon put the hurt on Borders and B&N for two reasons, both valid and non-abusive:

1) They do not need to charge you extra for running a brick and mortar store with a lot of wasted space and employees sitting idle, or for the extra steps to move books and CDs between warehouses and those stores. They can make the same amount of money while charging less.

2) They offered a massively larger selection. A store might carry 40,000 books while Amazon offered millions, the same with CDs. I can remember going into a B & N to look for a new book and not finding it because they hadn't bothered to stock it. And going into a Tower Records and not finding the CD I was looking for.
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There's definitely a legitimate 'evolutionary' part to the pressures brought by these changes - big chains then Amazon.

If we ended up with several Amazons competing simply because internet browsing and shopping are the preferred methods and store browsing is obsolete, ok then.

There are legitimate advances to the selection and speed of affordable delivery.

But to the extent that there's one massive seller instead of competition, that's not to good. To the extent that sales tax evasion played a role, that's not good. And to the extent that consumers were short sighted about wanting the B&M bookstore to browse but the retail model didn't find a good way to compete with the internet, that's not so good.

Some of the harms are those 'unfortunate but justifiable ones'. It'd be nice to have more local independant bookstores - but they just can't compete on pricing. So yes, a lot of decent employment is lost in exchange for a smaller number of Amazon warehouse positions, but that's 'economic efficiency'.

In economic theory, the former book workers go on to other positions - though we that doesn't seem to go so well a lot with globalization.

Just as Wal-Mart putting better paying small businesses out of business has some legitimate economic advantages, but still does cause various harms also.

Keeping some competition is a good thing. Capitalism's default path is to monopoly.
 
Craig234 said:
There's definitely a legitimate 'evolutionary' part to the pressures brought by these changes - big chains then Amazon.

If we ended up with several Amazons competing simply because internet browsing and shopping are the preferred methods and store browsing is obsolete, ok then.

There are legitimate advances to the selection and speed of affordable delivery.
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lesee.
google shopping
yahoo stores
ebay
amazon
newegg (yes they do storefront now, check)
and a bunch of smaller places
 
Let's see. I save a dollar here, a dollar there. Those dollars add up. And then, those dollars go toward taxes to pay for the social services provided to the employees of those places, because they don't get the good benefits that a lot of the mom & pops had been able to provide.
 
DrPizza said:
Let's see. I save a dollar here, a dollar there. Those dollars add up. And then, those dollars go toward taxes to pay for the social services provided to the employees of those places, because they don't get the good benefits that a lot of the mom & pops had been able to provide.
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The downside of that model, is a lack of economic freedom. With mom+pop stores, I had a *choice* about whether to pay benefits to their workers, by choosing whether or not to shop there. With megacorps with part-timers on welfare, like WM, you don't have a choice. The gov't squeezes you for taxes, to pay their benefits, and you don't get a choice. (You still have a choice to patronize their stores or not, but they are costing you money, whether you do or don't.)

This lack of economic choice and freedom seems so antithetical to a so-called "free market".

Welcome to the quagmire of socialism, I guess. 🙁

Edit: That doesn't even begin to scratch the surface of the "monetary efficiency" of the mom+pop model of more or less paying direct benefits, versus the roundabout way of taxation, and gov't administration of welfare benefits, paying for additional personnel to administer the welfare, and those that get it but don't deserve it, etc.
 
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VirtualLarry said:
The downside of that model, is a lack of economic freedom. With mom+pop stores, I had a *choice* about whether to pay benefits to their workers, by choosing whether or not to shop there. With megacorps with part-timers on welfare, like WM, you don't have a choice..
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I've never known any mom & pop stores to ever give their employees benefits. They don't usually have enough employees to get any type of group plan. Most never offered full time work either, at least not around here. They do offer higher prices though.
 
WilliamM2 said:
I've never known any mom & pop stores to ever give their employees benefits. They don't usually have enough employees to get any type of group plan. Most never offered full time work either, at least not around here. They do offer higher prices though.
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Bingo. In my opinion, OP is living in a dreamland, seeing things the way he wants to.

I once took a test to show how liberal vs conservative I was, and it showed me twice as far to the left as ghandi. I however also understand how things work in a free market capitalistic economy like what we have here.
 
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