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Toys 'R' Us Wins Suit Against Amazon
theodp writes "Having prevailed in its bitter lawsuit against Amazon.com, Toys 'R' Us will create a new and independent Web site. A NJ judge found Amazon breached its agreement and ordered the two companies to sever their partnership Thursday. In a 131-page opinion, the judge termed Amazon's attempts to throw out e-mail evidence on the grounds that Internet communications lack reliability 'incomprehensible' and took a dim view of the testimony of some Amazon execs, including CEO Jeff Bezos' candor and 'rather childlike' explanations."
I always wondered why for what was supposed to be Toys R'Us online presence, you could generally find the same crap cheaper through the same website. Interesting to hear; interesting how long it will take TRU to get their act together and start selling themselves.
I wish there was a choice that said "Factually Wrong -1" when I mod.
naming the new site Amazon'Rn't Us.com
geek page at KY speaks
I would have thought that Toys R Us, with its years of experience in marketing towards children, would have more childlike explanations. Oh well :)
OLPC Australia
131 pages? Screw RTFA!
What changed under Obama? Nothing Good
I didn't realize that Toys R' Us was in a lawsuit with Amazon. Seems back in 2000 they agreed to work together in the online world with a 10 year contract. Toys 'R Us thought they had an exclusive contract with Amazon, but when Amazon started selling things from other retailers Toys 'R Us wanted out (understandably). Amazon tried to force them to stay.
Rather lousy thing to do if you ask me. Good business is about building mutually beneficial partnerships, not about beating up your neighbor and taking his lunch money. If I owned a company I would be wary of doing business with Amazon.
Qxe4
The article is horrible (it ends in the middle of a sentence!), and it is impossible to say exactly what Amazon was claiming regarding the emails. It talks about Amazon claiming hearsay, and then talks about the judge saying things about the realiability of internet communications. Either the author of the article or the judge seems to be using a non sequitur. It just makes no sense.
And she repeatedly complained about the ambiguous use of language in memorandums, contract agreements and discussions, concluding that "the language as drafted whether intentional or inartful gave Amazon the words to play the game their way."
If the language was so ambiguous, wouldn't it also give Toys 'R' Us the "words to play the game their way (emphasis added)"? And what does she mean about memorandums and discussions. I didn't know memorandums and discussion had to be written and spoken in accurate legalese. If the article is accurate (and I'm interpreting it correctly) it sounds like the judge is siding with Toys'R'Us just because they entered into a bad contract!
Again, the article doesn't tell us much, but it looks like Amazon has good grounds for an appeal. The judge can't just throw out a contract because its a bad deal for one side. And the judge can't allow hearsay, which it sounds like she's done. I mean, it sounds on the one hand that she is chastising Amazon for wanting to (rightly) exclude hearsay, and on the other hand is chastising them for the quality of that hearsay!
So, a company which spams, files frivolous patents, files lawsuits based on an allegedly "purely defensive" patent portfolio, pretends to oppose the current patent system while systematically abusing it, and is consistently "the worst neighbor we can get away with being" as a matter of policy...
Failed to act in a forthright manner?
Amazon? DECEITFUL? HOW CAN THIS BE?!?
Oh, that's right. They've been like this since day 1.
What amazes me is the number of apologists who will do anything but admit the plain reality. Amazon sucks. We would be better off with pretty much any other company replacing them.
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While looking for work a year ago, I attended a job search seminar - one of the persons I met there was a former executive at Toys R Us - he briefly summed up what killed the Toys R Us business model - Walmart.
Walmart simply sucked away any profit margins the Toys R Us Franchise once had - especially during the biggest toy buying season - Christmas.
According to him, going online with Amazon was a desparation move to gain some profitability back from Walmart - managed by Toys R Us execs who had not a clue about managing an online store.
"Let us raise a standard to which the wise and honest can repair" - George Washington
The dissolution will take months to resolve. No way in hell it's going to be an instantaneous "flip the switch and they're gone" type of thing. The amount that TRU brings in each month online is not pocket change (I deal quite a bit with their web-based transactions), so they're not about to just shut web sales down. They are, however, working on their own site, which should be up sometime this summer. I fully expect the partnership to continue until there's an alternate channel.
Amazon's attempts to throw out e-mail evidence on the grounds that Internet communications lack reliability
Wah?
I hope I am not the only person that thinks this is a total contradiction!
Yes, shop online with us... Sure, purchase goods using the Internet... Absolutely, we can email you a new password/invoice/receipt number... Use email to communicate for business purposes - you must be F&*king crazy!!!!
If I tried to explain why, in this day and age, when running an entire business empire online, I considered "Internet communications" unreliable, I think my efforts would end up "incomprehensible" too!
Optimist: The thumb drive is half empty! Pessimist: The thumb drive is half full...
It certain circumstances, where a contract is unfair, a judge can declare it invalid. However, in this case, the judge didn't "throw it out", he found that Amazon.com breached it.
Do you even lift?
These aren't the 'roids you're looking for.
Can't tell from the article if it applies, but I can sure think of a few reasons why e-mail is not the best evidence.
I was thinking about this, and you know, Google gets a lot of flak for the storage-archive-nothings-ever-deleted thing; but could this be at least one positive side for most people?
I mean, really, it would be pretty preposterous to suggest that most people are capable of hacking and forging email on Google's servers, complete with Google's logs and metadata on the message transmission. Compared to a company's (or a person's) own private servers, it seems having a reputable 3rd party involved would add legitimacy in this case.
Thoughts?
~Rebecca
(Disclaimer: I'm a former Amazon employee who worked with a group that had a close relationship with TRUS)
I think the TRUS relationship was weighing heavily on both companies. Amazon doesn't like to sell toys directly, as they're very difficult to manage in a supply chain -- they're bursty, vulnerable to all kinds of trends that are difficult to predict, and very fragile to ship. TRUS' technical staff was often frustrated by the weird working relationships imposed by our respective corporate bureaucracy. And finally, it really cramped Amazon's ability to create new products and services, since we were constantly having to consider whether a new feature would ruffle TRUS' feathers.
I think both parties are better off with a divorce. It's quite a risk for TRUS to create a new online store from scratch, but they've got some good people who've had several years of experience working with Amazon. I wish them the best of luck.
And that is why you don't own a company of consequence. Business is about making money, not being some kind of 'good neighbor' to competitors.
While it's true that every business looks out for #1, I think you overstate the case in the opposite direction of the grandparent post.
Businesses have cultures and characters, just like people. And partners/allies approach businesses taking these into account; the reputation of a company can create revenue or costs accordingly. Those revenues and costs may not be the determining factor in every or even most situations, but they are real.
"Who steals my purse, steals trash, but he that filches from me my good name robs me of that which not enriches him and makes me poor indeed." Of course Shakespeare put these words into the mouth of a scheming liar. Their truth is situational: it depends on your purse, and how much you need your reputation. If you're a poor tribal clansman, it is very true. You don't have material wealth worth mentioning, and you are mutually dependent on others like yourself for survival and defense. If, on the other hand, you're Louis XIV, you have no friends -- only rivals who have revealed their hands to various degrees. You're reputation is relatively unimportant, as people are tied to you by law and custom. Your purse is relatively more important becuase by it you maintain those laws. No one expects you to keep your word; your actions are like the weather. People can predict them in a general climactic way or a short term by scanning the horizon for fair or stormy weather. But nobody takes you word for what the weather will be at the end of next week.
Businesses exist along the same continuum, from small consultancies whose only real asset is their reputation up to the Sun King of all businesses: Microsoft. Within it's sphere, Microsoft wields unchallengeable power. Nobody who allies themselves with Microsoft today seriously believes that Microsoft won't issue a writ of execution later on if it suits them. This is the natural course of any entity which has untrammelled power backed by money. Other companies who are trying to work in the margins of Microsoft's domain cannot afford to act this way; it's not that they wouldn't; they're just not in a position to. If a company is going to draw customers away from Microsoft, then it has to convince those customers that it's trustworthy. Lack of trust and affection may very well hinder Microsoft's plans outside its core businesses, for example in the music field, where customers do not feel the weight of compulsion.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
I will add to your comment about farmer's markets and talk about small local grocers, because over the last year or so I have stumbled across a fact that surprised me quite a lot.
Down the street from my house here in the city of San Francisco I have a little corner produce store. You can get pretty much any fresh food that you can get from Safeway: vegetables, fruit, dried goods, eggs, milk, etc.
First I started shopping there because it was just as convenient to get to as Safeway, and buying local seemed like a good thing. Then I noticed that the quality of the produce was much, much better than Safeway's. Safeway is buying in massive volume and they are buying vegetables that have been grown, treated and/or engineered to have long shelf lives. The stuff at this corner store is coming from the farmers to my street corner. It looks and tastes better in every way.
But, as I said, over the last year I noticed something even more surprising. You might think, based on what I've said, that I'm paying a little more to support my convictions and/or get nice produce. That's usually how it works: Buy from the big vendor, get the deep volume discounts. Buy from the little guy and pay more. BUT NO! The fact of the matter is that just about every single thing I buy at the corner store is cheaper than the same thing at Safeway.
There are some exceptions; mostly packaged foods like salad dressings or mayo. But mushrooms that cost $2.49/lb at Safeway cost $1.89 at the corner store. A container of milk that's $2.19 at Safeway is $1.79 at the corner store. Even something like a sack of flour or a packet of yeast costs less.
The lesson is that Safeway's business model does not necessarily work the way you think big retailers' business models work. I expect what they do is negotiate deep discounts with the packaged, prepared food vendors: Hot Pockets, Lean Cuisine, etc., and they sell them to the consumer at a minimal profit margin. They make up the difference on produce, fresh fruits and vegetables, and dry household goods.
Your average Joe Consumer is used to comparing prices on individual branded items. If a 12-pack of Coke normally costs $3.50, he'll notice when it's on sale for $1.99 and that will get him into Safeway. That same consumer, however, has fallen out of the habit of comparing pricess on piecemeal, by-the-pound items like fruits and vegetables -- and so that's where Safeway jacks up its prices.
Try it sometime. If you have access to a local green grocer, shop there a few times and make a note of what you pay for things. Then see what happens when you try to buy the same items the next week at your local Safeway or Albertson's. I bet you'll be surprised. Shop at the green grocer and you support local business, get better quality food, and pay less.
(Oh, and you should be eating more fruits and vegetables anyway.)
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