venuswasaflytrap t1_iu4oy8n wrote on October 28, 2022 at 3:06 PM

Reply to comment by [deleted] in [OC] Visualising how profitable (or how unprofitable) Amazon is by giteam

It's obviously not price gouging, the chart is right there.

On $127 billion in revenue, they make $2.9 billion in profit. That's like a 2% profit margin.

They're actually operating on mega-slim margins. The obscene profit amount comes from the fact that they're creating hundreds of millions of transactions that they take a slim cut from (known as salami slcing like is superman 3 or office space).

The cheaper those transactions can be, the more that will occur and the more money they will make. That's why they drive the prices ever-downward, and why they use their bargaining power to create super low-wage positions to make super cheap things.

You can't really fix this with taxes. Even if they paid 50% corporation tax or something that doesn't change the chart above significantly. Just cahnges that 2.9 billion to 1.45 billion with 1.45 billion in taxes. They'd still underpay workers.

I think there is a an argument for a price floor. Minimum wages is one example, but I also think that maybe some of the stuff you can buy on Amazon is simply unethically cheap.

Beansilluminate t1_iu4qajz wrote on October 28, 2022 at 3:16 PM

In actuality it’s worse than 2%, given that AWS margins are subsidizing the rest of the business

685327593 t1_iu4v8f8 wrote on October 28, 2022 at 3:49 PM

You're wasting your time with these people. They don't actually care about the facts, they're just here to push political propaganda.

venuswasaflytrap t1_iu5265k wrote on October 28, 2022 at 4:35 PM

I can’t understand their reluctance. A lot of people use partial truths and misleading statements to push agendas in both sides.

685327593 t1_iu52teh wrote on October 28, 2022 at 4:39 PM

We've gotten to a point in our society where people see their political alignment as central to their identity. Having to question their political beliefs is as extremely painful to these people.

Cute_Agent7657 t1_iu588y3 wrote on October 28, 2022 at 5:15 PM

Not everyone is pushing political propoganda some are >!simps of Elon Musk!<

Tordoix t1_iu78tqw wrote on October 29, 2022 at 2:13 AM

Not to forget that they are using their quasimonopoly as marketplace (and therefore quick access to listed prices) to undercut competitors by just one cent on many products and doing so on just the slightest of margins. This could be regulated, an open marketplace with such high relevance should not be run by an entity who also sells on said market in order to ensure free trade.

venuswasaflytrap t1_iu86k2j wrote on October 29, 2022 at 8:51 AM

This is sort of one of the reasons I think a price floor of some sort might help.

It would put a minimum limit on how much vertical integration could benefit.

E.g. if somehow we say a t-shirt needs to cost at least $30, then Amazon can’t sell them for $5, so the small company who makes tshirts can compete with them.

I don’t know exactly how you could sensibly implement that - there’d be a myriad of ways to bypass it depending on how the law is phrased - but just a thought.