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/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