|>>|| No. 13895
>If your revenue is over 100 million a year but you apparently haven't made any profit, you are probably running some sort of con.
This is a post from a few years ago that I saved because it was fascinating, so full credit to whoever wrote it. It also explains why corporations may have incredible revenue and negative profit:
>Amazon are psychotically aggressive about price. They will undercut anyone, regardless of what it costs them. They're pursuing a strategy of total market dominance and their shareholders are backing them. When people accuse Amazon of tax avoidance, they're missing the point - Amazon genuinely don't make a profit most years, which is far more worrying. They're buying any company that might conceivably compete with them; If they can't buy the company, they'll crush them by selling products at a loss. Amazon's investors saw how successfully they destroyed their competition in the book trade and they're happy to patiently wait while they dominate other markets in that way.
>The heart of their strategy is Amazon Prime. This, again, is something they lose money on, but it makes perfect business sense. Once you've paid your annual Prime subscription, you get unlimited next-day delivery for free, so there's an obvious incentive to go straight to Amazon. Prime members buy vastly more from Amazon than they did before joining Prime, in large part because they start buying all sorts of odds and ends that they would have previously bought elsewhere. Getting you to buy more has intrinsic value to Amazon even if they make no profit on that sale, because it provides them with valuable information about your purchasing habits.
>One of Amazon's cleverest strategies in this respect is Amazon Family. They heavily promote this scheme to expecting mothers, which gives you three months of free Prime membership and a 15% discount on nappies. It's all about creating purchasing habits - once you're buying your nappies through Amazon it becomes automatic; Amazon also get to do their algorithmic "People who bought X also bought Y" magic to sell you all sorts of other stuff. They'll continue to market stuff at you for the rest of your child's life, picking up all sorts of data about your child along the way.
>In a similar vein, Amazon are massively expanding their Subscribe & Save programme. On thousands of consumable items, Amazon offer a discount if you subscribe to have that product sent to you automatically on a regular basis. They offer all sorts of products in this way, from razor blades to dog food. Amazon know that this arrangement is so convenient that you're unlikely to ever bother unsubscribing, even if Amazon are no longer the cheapest.
>Jeff Bezos has said that his goal is to create a company that knows what you want to buy before you do. He envisions a future in which Amazon just send you stuff without you asking, because they can perfectly predict your wants and needs. People will be delighted with that arrangement, because Amazon will consistently pick out nicer things than they would have bought for themselves. That goal is both creepy as fuck and entirely plausible.
>To give you a sense of the scale of Amazon's ambitions, check out the following video. Last year, Amazon bought Kiva Systems, a company that makes intelligent, autonomous shelving. Watching it all in motion is utterly unnerving, like a sneak preview of the Robocalypse. Amazon aren't a retailer in the conventional sense, they're a technology company that uses machine intelligence to sell stuff. Everyone else is focussed on today or the next financial quarter, but Amazon are planning for the far future.