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Amazon's New Refunds Policy Will 'Crush' Small Businesses, Outraged Sellers Say (cnbc.com)
Amazon sellers are up in arms over a new returns policy that will make it easier for consumers to send back items at the merchant's expense. From a report: Marketplace sellers who ship products from their home, garage or warehouse -- rather than using Amazon's facilities -- were told this week by email that starting Oct. 2, items they sell will be "automatically authorized" for return. That means a buyer will no longer need to contact the seller before sending an item back, and the merchant won't have the opportunity to communicate with the customer. If a consumer is returning an electronic device because it's difficult to use, for example, the seller won't be able to offer help before being forced to pay a refund. "Customers will be able to print a prepaid return shipping label via the Online Return Center instantly," the email said. Additionally, Amazon said that it's introducing "returnless refunds," a feature that the company said is "highly requested by sellers." The change enables sellers to offer a refund without taking back an item that may be expensive to ship and hard to resell.
Amazon isn't in the retail business. Amazon isn't in the cloud computing business. Amazon isn't in the logistics business. Amazon is in the business business. It is no longer The Everything Store; it is now the Everything Everything. It wants to be the platform around which all of the world's businesses depend.
This is about as ambitious a mission as a company has ever launched, in my opinion -- and Amazon may be the first company with a justifiable claim to such ambition. Its only business constraints at this point are geopolitical, really. I believe it aims even higher in the long run: it is aiming to become the macroeconomic backbone of at least the Western world.
When viewed in that context, traditional definitions of monopoly -- especially the most widely known definition of the state, which is based on market share within a specific industry -- almost feel antiquated. Jeff Bezos isn't JP Morgan; he's freaking Cohaagen from Total Recall.
(To be very clear, I say all of this in admiration of Jeff Bezos, not in fear or criticism of him.)
Imagine the tragedy of a world where a seller is liable for making the products they sell actually useful out of the box rather than forcing customers to go down a "support" rabbit hole before they give up.
Amazon's competition nuked themselves with their inadequacy. All Amazon did was spot the weaknesses (which were pretty obvious) and exploit them.
No, what Amazon did was figure out that they didn't need to make profit so long as they kept investing in new technology that they could maybe sell eventually. They now make so much money on cloud computing and related services that they don't give a crap about profit in their retail side. They are walmarting the entire retail business model safe in the knowledge that everyone else is going to go broke long before they do trying to compete.
People who have never worked in a small retail business don't understand the business model. You don't "compete" with lower prices, that's just a race to the bottom with everyone dying a slow death. Including the manufacturers who now have a thoroughly devalued product that they can't wholesale.
Oh, believe me, we are. Amazon is a shit show all around for 3rd party sellers. It just takes awhile to sink in.
Upfront, you see them steal 15%-20% of every sale.
Then your first order comes in. They've reset the weight of everything you sell. Feathers or bowling balls, doesn't matter, catalog says 1lb. Shipping is a flat $4.49 so they helpfully select a customer in the state farthest from you. As if that's not enough, then they dip their snouts into that too so you only get $4.
Then, if you signed up for FBA, you start seeing higher rent bills come in at different times of the year. You pull your stuff back, only to find they've co-mingled it with fakes, even though you unchecked that box and confirmed with them. Amazon, of course, takes no responsibility and tells you to pound sand. You're lucky you got anything back.
Then your first liar buyer files an A-Z claim. They tell you to talk to the buyer and when he doesn't respond at all they side in his favor. Your appeal, showing delivery confirmation, an unresponsive customer, and an open postal investigation is instantly denied. That's when you find out you're supposed to pay even more out of pocket for signature confirmation. And even then there's no guarantee. Best case, a liar buyer whose bluff has been called gets free return shipping on you.
Meanwhile, Amazon is held to none of these standards. They can drag their feet for weeks on office supplies, refuse to answer inquiries, and deliver damaged goods without recourse.
Like I said, a shit show all around. Amazon shills can fuck right off.
That's a known economic fallacy. Localism generally makes an economy weaker and poorer, save for when the local economy is at a trade advantage.
For example: it's expensive to ship meat and produce around the country; as a result, people who live in Wisconsin or various big farm states have access to meat, cheese, and so forth at low prices. At one point, farmers used to get $8/crate (90 pounds) for oranges, which showed up at my local market for $8/5lb (literally 18 times as expensive), with nobody along the way profiting more than 10%!
In such a case, buying local reduces the cost of goods, leaving you with more money to buy more stuff. Buying as direct as viable will shift your income away from middle-men and to other producers and middle-men. Buying things locally-made in local stores, for example, avoids the enormous cost of overland nationwide distribution (a pair of pants costs like 6.5 cents to get here from China, and about $7 overall to get from the port to the Wal-Mart where you buy them). That, then, means you can buy more goods, and so there are more cashiers and local distribution drivers to carry pumpkins from the farm to the super market 2 miles away.
On the other hand, pants cost about $6 import ($6.12 per pair from China, 6.5 cents is shipping oversea). With American minimum-wage labor, this goes up, and so Americans have to work longer hours to afford them. The minimum-wage labor isn't just $8.25/hr; there's a massive amount of payroll going to social insurances (OASDI, medicare, unemployment on the first $7,000 of income) and benefits.
That triples the price of pants and cuts back the amount of labor you might expect to make all the pants we import from China (~178,000 factory jobs) dramatically. It also reduces the number of objects shipped and sold, meaning fewer truck drivers, fewer cashiers, and fewer retail inventory management crew members. In total, you end up losing nearly a net 9,000 American jobs.
The average American factory worker makes something like $21/hr and costs the employer $78/hr, versus around $3.20/hr in China. Buying local would be a disaster for jobs and the economy at large.
We have a lot of cities that are blown-out rust holes because they now lack any notable productive capacity. Folks there don't make anything anyone wants; if they did, they'd make it at a cost greater than anyone else who makes it anywhere else, and anyone who buys it from them would be poorer. Money wouldn't flow into their local economy, and people in their local would work harder and longer to use the same labor-hours and attached money to buy a lot less stuff and be a lot poorer in a desperate and misguided attempt at self-sufficiency and support of their local economy.
That's actually one reason I want a Universal Social Security. One of its side-effects is an inflow of money to such communities, giving them consumer purchasing power. They might import goods, sure; and someone needs to sell them. Fast food, retail, local entertainment... the last-mile service economy will grow. People will find jobs and grow wealth. With a stronger economy, they can then begin building a basis from which to supply something to the rest of the world. They might not all find it, but they'll be more-adaptable, more-ready, and more-supported while they wait as labor reserve for the rest of us.
It's been surprisingly-hard to pitch a universal social security because of class warfare. Since we're not in a recession now, people aren't hurt and scared; they're still angry. Thing is, it doesn't cost any more money to supply a universal social security--that is to say: after all is done and said, on a half-month cycle, people are perpetually ahead in after-tax spendable money under that system compared to today's. I mean all people.
You'd be surprised how many folks
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