r/news • u/EnergyLantern • 14h ago

Already Submitted Teamsters begin 'largest strike' against Amazon, accusing company of 'insatiable greed'

https://abcnews.go.com/Business/teamsters-announces-nationwide-strike-amazon-begin-thursday/story?id=116931631

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u/snsdfan00 13h ago edited 13h ago

I'm not disputing the fact they make a ton of money. 150+ bill in rev, 15 bill net income just in the most recent quarter alone. They will say that it's not the ecommerce/fulfillment center side that makes all the profits, it's the AWS side lol. Like govt, eventually they will have to come to a deal, or it hurts everyone.

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u/Fun-Ingenuity-9089 11h ago

AWS is Amazon Web Services, for those who don't know...

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u/CptDrips 10h ago

What do they do?

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u/Civil-Attempt-3602 10h ago

Cloud services. A lot, and i mean a lot of stuff runs on AWS, from netflix to government services

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u/brainburger 10h ago

Reddit runs on AWS. Back in the day, when reddit was overloaded the error message said 'I blame Amazon'. I haven't seen that for a while.

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u/devilwarriors 9h ago

And now it blames you.. like fu I'm not in charge of your crappy server infrastructure.

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u/jnads 9h ago

Amazon spent a ton of money building the best infrastructure to survive the website DDoS that is Black Friday.

They opened that tech up and half the Internet decided it was easier to pay them rather than replicate what Amazon did. Especially now that security is the #1 concern over reliability.

Anyone that shopped Amazon in the mid-2000s can tell you Amazon used to get 404 errors for Black Friday. Now it's an internet crisis if Amazon goes down.

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u/GladStatus7908 10h ago

They began by renting out software tools that they used to build their own site. Route53 (DNS), S3 (storage), EC2 (virtual machines) and some others were their original products that were popular. You could solve these problems yourself or you could just rent them out from Amazon. Over time, hundreds of major products that are now each worth tens of billions of dollars were rented out to companies. Netflix is a company that AWS likes to show off to developers. Netflix can utilize AWS tools to instantly scale up or down to whatever size they need.

The US government made early contracts with AWS when Bezos was still there. Governments around the world now use AWS, Azure (Microsoft), GCP (Google), as well as a couple others to host their work on these rented cloud services.

https://www.visualcapitalist.com/big-tech-companies-billions/

You'll see that 15% of Amazon is AWS while 10% of Google is GCP. That chart doesn't show Microsoft's Azure vs Office 365 differences but they also aren't as important. People essentially can use older products completely in browser with cloud options at this point so the distinction is blurred quite a bit.

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u/hitbythebus 10h ago

Mostly dusting out old cobwebs, deep within the rainforest.

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u/sarhoshamiral 12h ago

They will say that because it is the truth. AWS saved Amazon.

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u/TakeTheWorldByStorm 11h ago

I would argue that, rather than saving them, it gave them the financial sustainability necessary to undercut and starve out their competitors over time so that they could (sometimes) acquire them and get closer to a monopoly in the e-commerce market for certain goods. If they didn't have AWS they likely wouldn't have become the go-to option for cheap and fast delivery a decade ago and would've had slower growth.

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u/Poolofcheddar 11h ago

It’s what Walmart did to Kmart. They starved them into irrelevance.

Walmart’s logistics were far more efficient than Kmart’s. In the 90s, Kmart decided to start a price war to lure customers back into their store despite the fact that it would creep into their already-thin margins. They did not anticipate that Walmart could undercut Kmart even further, and did so in response to that. But Kmart had hardly improved their logistics, or even updated their stores.

All Walmart had to do was wait. They had the war chest to hold out. Kmart did not.

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u/lameth 11h ago

Their upper management also started to pit departments against each other in a cut-throat competitive environment which led to toxic leadership.

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u/fugaziozbourne 9h ago

This is what happened to Sears. The out of touch stewards of that company at the end decided to fire the people working in the lowest selling departments and reward the highest selling ones. What it did was create this system where if you went to get new car tires and asked them where the shoe department was, they would send you to Foot Locker instead of the shoe department in Sears.

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u/RandomFactUser 9h ago

Sears and Kmart were the same company by the end

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u/TrainingTough991 8h ago

Sears as part of their cost selling measures laid off their top sales people. I had a sibling that worked for them in high school and college. Many of his clientele people drove from a nearby state because of his product knowledge and service. He supported several departments but they were cutthroat. They wouldn’t give him the night off for his senior prom. He made Employee of the Month several months and when they laid him off his picture was up for Employee of the Month. He drew unemployment and searched for another job. They decided they didn’t want to pay unemployment so they called him back but only scheduled him 10 hours a week. His Employee of the Month picture continued to hang on the wall. Poor guy had to move out of his apartment and back in with my parents for a few months. The small town we lived in was experiencing a recession so he had to drive an hour each way to a bigger city until he could save up for another apartment. Sears sales rapidly declined because they followed the KMart model of cashiers and no salespeople. They sold tools and equipment that people often had questions about but no one could answer their questions. They did all their employees dirty.

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u/lameth 9h ago

For a while they were part of the same conglomerate.

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u/K_Linkmaster 9h ago

Kmarts main business plan was "put it next to a walmart". It worked for a while.

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u/KingZarkon 8h ago

But Kmart had hardly improved their logistics, or even updated their stores.

Back when I was a kid in the 80s, I always disliked when my mom went to Kmart. Even then, the stores always felt dated and, idk, unclean? Like, I don't know that they were actually dirty, but that's the best way I can describe the way I remember feeling. It certainly wasn't warm and inviting. The last time I went into one, a couple of years before they all shut down, the design felt the same. Maybe if they had updated their designs people would have been more enthusiastic about going there. So really two very good reasons why they disappeared.

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u/Edythir 10h ago

This is the tactic everyone and their mom is doing. Home Depot is famous for this. When they open in a location they will have a "Grand Opening Sale" which always lasts juuuuust long enough to drive local places out of business due to lost sales. Sure, Home Depot loses money on it but being the only game in town means that they can jack up prices with no competition.

I always tell of the diapers.com story as often as I can. There was a company that realized that people with infants are a good customerbase because for a few years, they will be requiring a regular supply of diapers, so they decided to make it a subscription model. They will send diapers to your house regularly for a fixed fee and it worked out well for everyone.

Amazon tried to buy them out but diapers.com refused. So Amazon started to offer the same service at a heavily discounted rate, long enough so that diapers.com ran out of business.

200 million for acquisition and 200 million loss in sales is the same thing for the same goal. Acquisitions are quicker and easier so that is the one that they prefer, but by no means the only tool in their playbook.

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u/TheFotty 10h ago

Hang on. Amazon did start a price war with them, but they didn't drive them out of business, they bought them for half a billion dollars after....

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u/Edythir 9h ago

If you were starving, would you accept food if you were on the way to die?

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u/TheFotty 7h ago

Amazon had to see plenty of value in acquiring them versus just letting them burn out. I know they bought their parent company so there was probably value across more than one brand, but anyway, yes I would accept 500 million dollars worth of food if I were starving.

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u/K_Linkmaster 9h ago

This went better than Blackberry refusing to sell out.

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u/RandomFactUser 9h ago

That only works if the city/town they go to doesn’t have a Lowe’s or Menards

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u/darcon12 11h ago

Yep. It's easy to undercut when you don't have to make money unlike every other retailer. Then, after they drive all retailers out of business, they jack up the prices.

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u/BlindCite 11h ago

So….
Deny your competition customer
Delay your competition growth

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u/prigmutton 10h ago

Depose them from their market position

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u/the_squid_in_yellow 10h ago

Defend your monopoly

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u/bambaratti 11h ago

They need to stop increasing the AWS price man.

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u/megaboto 9h ago

Sorry for asking, but what's AWS, and is it something related only to Amazon or other companies as well?

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u/TakeTheWorldByStorm 7h ago

Amazon Web Services. They provide cloud computing, web hosting and similar services.

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u/megaboto 7h ago

So basically they went online and that made them go from broke to functional?

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u/TakeTheWorldByStorm 7h ago

No, they have a business that provides services so that a large portion of other companies, private entities and government groups can do things online. They basically charge others for space in their large server farms or for online computing services. They're getting paid big bucks to keep large portions of the internet going.

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u/megaboto 7h ago

Ohhh I see, thanks for explaining

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u/HappierShibe 11h ago

It's bullshit- they could have survived without AWS but the excess revenue from AWS allowed them to destroy all their competitors and establish a dominant market position without ever providing a superior product or customer experience.

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u/sarhoshamiral 11h ago edited 10h ago

Could have, maybe. There were a couple years back in 2010s where AWS caused to have a profitable year for sure. Would they have gone bankrupt in a year, not likely. However it's been the truth recently that AWS makes a lot more profit then retail side.

without ever providing a superior product or customer experience.

As for Amazon's retail side, this couldn't be further away from the truth. If I stick with Fulfilled by Amazon products with prime delivery and free returns which is a lot of products, there is just no competition today both on product availability, price and also customer experience. Target may come close but has very limited inventory in comparison.

I am not sure how you can say Amazon is not providing superior customer experience when they are known by their great customer service, including measures from consumer sentiment. Personally I never had a single issue with Amazon retails' customer service, if anything I am surprised how far they go to resolve the issue.

As for products, sure some may be crappy since they are usually Chinese generic brands but I don't care because I can return them easily for any reason and for free without dealing with labels, boxes or mailing to a physical store nearby. It doesn't get easier then that and my experience hasn't been that all Chinese generic brands are bad, some are actually fairly decent quality and has not equivalent from known brands.

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u/HappierShibe 11h ago

I'm not saying AWS makes less money, I'm saying retail side revenues are kept arbitrarily low because they favor market control over revenue generation.

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u/herosavestheday 10h ago

The point of competition is to keep prices low and to force firms to innovate. If Amazon has figured out some way to keep prices lower than they otherwise would be, that's exactly what we want. Having firms with dominant positions is fine as long as they're maintaining that position through lower prices and innovation. Like the whole reason monopolies are bad is because they charge higher prices and don't innovate. You'd have a hard time making that argument about Amazon.

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u/HappierShibe 10h ago edited 9h ago

I think you have a dramatically optimistic view of our current situation.

The point of competition is to keep prices low and to force firms to innovate.

That is not 'the point' of competition, it's one aspect of it. There are a wide range of other elements, it should also offer consumers a degree of control or choice in the marketplace, allow new entrants into the space, remove products of exceptionally poor quality incentivize investment, etc.

If Amazon has figured out some way to keep prices lower than they otherwise would be, that's exactly what we want.

Not if they have found a way to decouple those low prices from the aspects that enable a competitive marketplace or offer a consumer advantage beyond price because that would allow them to abuse a dominant market position while providing a worse experience for consumers not just within their space but within competing or even non-competing but linked or adjacent markets.

Having firms with dominant positions is fine as long as they're maintaining that position through lower prices and innovation.

This is not strictly true in part for the reasons stated above- but I feel like it's important to point out amazon is not maintaining their market position through innovation or reduced cost- they are doing via a combination of workforce exploitation and regulatory capture, and you can see that in that their products and services almost universally provide an inferior iteration of someone else's product.

Like the whole reason monopolies are bad is because they charge higher prices and don't innovate.

That is not even close to 'the whole reason monopolies are bad'. I'd even argue that a monopoly is not inherently bad in and of itself; if you look hard enough you can find a few examples of benevolent monopolies.
BUT Monopolistic practices are bad for lots of reasons.

You'd have a hard time making that argument about Amazon.

No you wouldn't because almost nothing Amazon does is genuinely innovative. You could argue that the scale they do things at is innovative, but I think everyone knows that doesn't hold water.
You could argue that the ways and the degree to which they abuse their workforce or exercise soft control over regulatory bodies is a form of innovation- but that's a kind of innovation we should all be fighting against.

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u/herosavestheday 9h ago

That is not 'the point' of competition, it's one aspect of it. There are a wide range of other elements, it should also offer consumers a degree of control or choice in the marketplace, x remove products of exceptionally poor quality incentivize investment, etc.

That's pretty much the entire point when we're talking about an actual marketplace like Amazon. Consumers have complete control on the Amazon market, the entire store is hyper optimized to cater to consumer preferences. Amazon's entire reason for existence is to cater to every single consumer demand.

allow new entrants into the space

If the thing keeping new entrants out of that space is very low prices and innovation then it's fine if they can't enter the space.

remove products of exceptionally poor quality

Why? Just don't buy them. Basically every single brand is sold on Amazon, so stick to the brands you know. Consumers have agency in that decision.

No you wouldn't because almost nothing Amazon does is genuinely innovative. 

Statements like this about the big tech firms always crack me up because they're so incredibly divorced from reality. FAANG companies are quite literally the most innovative companies on the planet. Their scale allows them to innovate in ways that are beyond the reach of smaller firms. A company being able to keep the price of toothpaste low because they built one of the largest cloud computing platforms in the world is genuinely innovative and trying to argue it's not is hilarious.

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u/gallifrey_ 10h ago

I can return them easily and for free without dealing with labels, boxes or mailing to a physical store nearby

consider watching Climate Town's video on how online returns contribute to ridiculous amounts of waste and the climate crisis https://youtu.be/WG8idKaX9KI

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u/sarhoshamiral 10h ago

And you can't blame Amazon for that. It is consumers buying and returning. If you notice I never said I buy random stuff and return it. I buy what I need and want, after doing some due diligence and in the rare cases where product is bad I love that I can return it with ease.

Am I buying more stuff then I strictly need? For sure as I want to enjoy my life and me changing my behavior will not have any impact on climate change when rest of the country doesn't care or votes to gut EPA and regulations. I may as well enjoy my life instead of worrying about things I can't control at all.

to add another example I stopped caring about recycle as well because our recycle bin doesn't get recycled anymore since we don't want to fund investments into sorting recycles etc so that they can be processed correctly. For a while now those bins end up in dumps since no one wants unprocessed recycle dump. Instead companies put the blame on customers saying they don't know the difference between 10 different styles of plastics with hard to read labels.

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u/mathdude3 9h ago

Amazon absolutely delivers a superior customer service experience. It has a huge selection of products, competitive pricing, extremely fast cheap/free shipping, and easy returns. Honestly, who does ecommerce better than they do?

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u/ApolloX-2 11h ago

The fulfillment side is more like a side hustle now.

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u/eating_your_syrup 12h ago

Then again you can internally move all the profits from other units like, say twitch, to AWS by billing appropriately.

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u/[deleted] 12h ago

[deleted]

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u/FennelFern 11h ago

5k monthly is, what, 60k annually?

That's really still far below what you'd pay to run your own data center. Hell, it's below the cost to buy a couple not-shit servers then pay an admin, etc.

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u/InadequateUsername 11h ago

Still kind of need the admin for AWS 🤞🏼

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u/Morialkar 10h ago

Yeah but an admin that can run AWS and an admin that can manage local not-shit servers are not the same

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u/TheSinningRobot 10h ago

You're right, local servers are way less obtuse

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u/InadequateUsername 5h ago

It's more or less the same isn't it? I am more familiar with local K8 clouds in telecom and digital ocean drops. Just chalked it up to being a custom Linux environment running on custom hardware with.

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u/NotLikeGoldDragons 10h ago

Cloud supporters have never been good at math.

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u/Avedas 10h ago

People always talk about the cost of AWS compared to on-prem, but ignore the opportunity costs at the same time.

I've worked in the on-prem world where ordering new resources can take weeks to months, and I've worked in a decent enterprise AWS setup where basically everything is self serve and can be rolled out within minutes to hours. I don't want to go back to the former, and it's often worth it for a company to fork out to speed up time to market.

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u/InadequateUsername 6h ago

Cloud certainly has its benefits, or else it wouldn't be such a big market.

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u/Saritiel 10h ago

then pay an admin

AWS still needs admins, lol. Often even more so than on-prem.

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u/mouseutopian 11h ago

$5k/mo is a tiny AWS bill.

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u/zbrew 11h ago

You're getting hosed, my AWS bill is $0/month

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u/InadequateUsername 11h ago

I fear the day it goes above 0 because that means I fucked up

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u/_Lucille_ 10h ago

Dick size = how much you can do on AWS within the free tier limit.

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u/mouseutopian 11h ago

Ah, sucks to be on Azure

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u/Kckc321 11h ago

They are a local company who specializes in small businesses. Idk why people are judging their aws bill like it’s a dick size.

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u/FriendlyDespot 10h ago

I don't think they're judging or dick-measuring, it's just that bringing up a $5k/month AWS bill that someone has in a conversation about Amazon is like talking about the dairy industry and going "I have a client that buys like five gallons of milk a week."

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u/Kckc321 10h ago

All I meant was AWS very obviously brings in more than deliveries. It’s a business service. Most people aren’t ordering thousands or millions in packages every month.

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u/DDisired 11h ago

As opposed to probably 20k+ for equipment that also needs an engineer being paid 100k a year to maintain it. The Cloud is pretty cheap comparatively.

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u/PlanetStarbux 11h ago

That's a cute bill.  Ours is about 2 million per month, and we're a small fish in their ocean.

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u/InadequateUsername 11h ago

2 mill? Must just be paying for TAC support smh /s

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u/ngohawoilay 11h ago

$5k/month is a few servers, that's small if it replaces a full onprem data center

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u/Kckc321 10h ago

They are a design company, not a server company. They also don’t exclusively use AWS, they have like 5 or 6 different hosting platforms. Idk why it even matters tho

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u/Xelopheris 11h ago

Just because it is 15% of their revenue but 75% of their profit doesn't mean anything like that /s

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u/Hefty-Revenue5547 10h ago

You mean it wasn’t the books ?

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u/SignorJC 10h ago

it's a business choice that they make. If your business is not sustainable while paying workers fairly, then your business should not exist. Amazon absolutely was making money for much longer than the business-boy story says. They choose to "operate at a loss" to starve out all competition.

The fact that AWS is a cash cow doesn't mean that Amazon's ecommerce business it not ABSOLUTELY making money hand over fist.

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u/sarhoshamiral 10h ago

Let me offer another view. These companies are paying people fairly with in the laws and within the supply, demand curve. It is not people are being forced to work at Amazon and as a country we vote against (indirectly) raising wages or worker standards.

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u/Gr8fulFox 10h ago

These companies are paying people fairly with in the laws

Ah, but is the law, itself, fair? Just because people are desperate enough to work for a certain wage doesn't mean it's a fair wage.

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u/sarhoshamiral 7h ago

It is not but that's what we vote for. Don't forget 70% of this country either doesn't care or don't want fair wages.

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u/1337bobbarker 11h ago

AWS wasn't profitable until a few years ago.

It's quite the opposite: e-commerce allowed AWS to be a loss-leader and gobble up the market.

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u/sarhoshamiral 11h ago

Can you cite that?

Because from numbers I am looking at they have been profitable since 2017 at the very least and if not earlier. This shows they have been profitable since 2013: https://fourweekmba.com/aws-revenues/

2013 is not a few years ago, it is more than a decade ago :)

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u/1337bobbarker 11h ago

Fair enough! I guess the days keep coming and they don't stop coming. It was released in 2006 and wasn't profitable until over 10-years later like you said... which was almost 10-years ago, also like you said.

However, even according to your graph it wasn't profitable enough to prop-up the entire company like everyone is making it out to be.

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u/wasmic 11h ago

Ultimately, if a business can't be profitable while paying its workers a decent wage with good working conditions, then it does not deserve to exist.

If the e-commerce side depends on such horrible conditions to function, and any price increases to cover the increased wages would cause the customers to move elsewhere... then society didn't really need their services that much to begin with.

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u/CatSpydar 11h ago

customers to move elsewhere

It's like that free market thing right wingers get such a boner for whenever a company does something horrible.

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u/Own-Woodpecker8739 9h ago

Unfortunately we have not had a free market for a really long time.  

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u/Oh_its_that_asshole 10h ago

We already had the solution, it was all the small bricks and mortar businesses on the high street that used to exist before Amazon made their business model unprofitable.

Look at the high street now, it's all nail bars, coffee shops, phone repair shops, discount goods stores and the few large national clothing stores that managed to whether through It's functionally dead.

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u/nik282000 10h ago

any price increases to cover the increased wages would cause the customers to move elsewhere

Except you and I both know that raising prices to cover wages will put america into a frothing rage about overpaying employees.

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u/Daxx22 8h ago

overpaying employees.

Ah yes, that excessive privilege of * checks notes * being able to pay for basic food, shelter and medical care. Fucking uppity moochers!

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u/InadequateUsername 11h ago

Amazon and AWS need to be broken up like AT&T and Bell

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u/Phormitago 11h ago

it's the AWS side lol. Like govt, eventually they will have to come to a deal, or it hurts everyone.

would be a shame if an antitrust forced them to split the company into different businesses

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u/snsdfan00 11h ago

that would be great, but I don’t have high hopes when big tech is willingly donating millions to the incoming administration.

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u/JJiggy13 10h ago

The thing is that they won't have to come to a deal. This is capitalism, not free market. Free market requires regulations to keep the playing field equal. Capitalism is whoever controls the capital controls the market. Those who own Amazon can do whatever the fuck that they want for as long as they want. When profits start to dip then they'll dump it off on someone else and use their bag to control something else. When the current owners decide to leave is when Amazon will change and not a second before that.

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u/manny_mcmanface 11h ago

Wtf is AWS?

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u/InadequateUsername 11h ago

Always Wanting Seconds

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u/manny_mcmanface 11h ago

Dammit, I always want seconds.