This article is... nonsense? It's so badly written I can't even figure out what it's trying to say. But after the fourth time he talks about "enshittification" it's very hard to take seriously. As far as I can tell, it's just an unorganized, stream-of-consciousness "I hate Amazon" rant.
Maybe there's an actual main point in here somewhere, that's connected to the headline somehow, but this article is a shining example of how not to write if you want to actually convince people of a point you're trying to make.
That’s a very long post to say “I don’t understand.”
The argument is very simple, Amazon – like other platform businesses – externalizes its costs onto its suppliers by raising suppliers costs it raises the costs consumers pay.
You can agree or disagree with that argument, but it’s not very complicated.
Many costs are listed, but the requirement for items on Amazon to get the lowest retail price “Most Favored Nation status” means they are an external influence on transactions that don’t involve them.
It’s common for small breweries for example to offer cheaper prices at the factory than anywhere else because that’s the lowest possible transaction costs. Much like how credit cards charge merchant fees and then require cash payments to be at the same rate.
I'd love a vote on how hard or easy it is for people. I got it quick.
I also understood the problems ahead of time reasonably well.
I can't see how #enshittification is anything other than an apt world-consuming trend broadly outlining the predominamt trends of capitalism in the world today. And for the new phase of Amazon now that it has attained market capture. To you it seems like a huge turn off, tuned you out, but you've just heaped the term onto your pile of disdain. It's unclear to me what problems you have, why you disagree or what you find inaccurate about the term in general or it's application.
The article is crap. The main point is in the second half of the article:
> Amazon binds its sellers over to something called Most Favored Nation status. That means that sellers can't offer their goods more cheaply than they do on Amazon – even if it costs them (lots) less to sell in Target or direct from their websites. This means that every time a seller adds a dollar to their Amazon sale price, they have to add a dollar to the price of their goods everywhere else, too.
The content leading up to it is explaining why Amazon is able to force sellers to accept that, and telling the story of how they got there. Most Favored Nation only works if you have no choice but to do business them.
I agree it is nonsense. The closest I can come to a point is: Amazon locks consumers in with prepayment schemes (like Amazon Prime, where you've prepaid for shipping). Then all the sellers have to follow because thats where the consumers are.
But it's an incredibly thin argument. I am a prime member and when I go to buy things online, the fact that I should choose amazon to get cheaper shipping absolutely never enters my mind.
As I read it, the article argues that more should be done against monopolies. When companies like Amazon start their flywheel, they provide great value for the customer. However, at some point, the competition is gone and the value for the customer is decreasing. At this point, only the shareholders benefits.
Hasn't it always been understood that raising prices after killing competition was Amazon's end game?
That's what I always thought investors understood about the business. What has mattered isn't profit, but rather cash flow. If you have cash flow, and you reinvest that into expansion (for more cashflow), eventually you have a monopoly. The whole point of that is one day you flip the switch, and raise prices.
As far as some people quickly understanding the point the article is making while others not getting it I recall a quote approximately saying “It’s very difficult to convince a man of something when his livelihood depends on not understanding it”.
I was expecting to see some data on how Amazon has driven up prices. There was none. Not even a single chart! This is an exceptionally poorly written article: acrobatic, liberal arts-esque logic and theoretical this-and-that and neologisms abound.
What should this data actually be and how would one get it? You can't really do a fair experiment with random assignment where some companies use Amazon and some don't and we see how their prices change over time. Because of the "Most Favored Nation" issue, you can't meaningfully compare prices of products between Amazon and other platforms. Monopolies and anti-competitive practices remove meaningful choices, which naturally blocks or hinders anyone from studying the outcomes of those removed choices.
> Because of the "Most Favored Nation" issue, you can't meaningfully compare prices of products between Amazon and other platforms.
Sure you can. Amazon lists millions of SKUs. A huge proportion of those are sold elsewhere, often by sellers who do not also sell on Amazon.
But more fundamentally, if data can't be had, how does the author know this is actually happening? Either it is an unfalsifiable claim or its not, and there should be data. The bottom line is, the author makes an extraordinary claim and thus the onus is on them to provide commensurate evidence.
(One of my degrees is in liberal arts, so I speak from personal experience here.)
Many of the fields in liberal arts pump out ideas. Think of it as theoretical physics (less all the math) without any ability/attempt to prove the ideas via rigorous evidence or experimentation. Often ideas are heavily dressed up with pseudo-technical language in an attempt to legitimize them.
See also the works of:
Foucault, Jung, Derrida, Freud, etc.
Now, in some cases, this is no big deal. For example, producing a work of art (novel, painting, etc.) does should not have any requirements of proof, evidence, falsifiability, etc.
But in other cases, where the creation of new knowledge is claimed, a lot of this stuff should be thrown on the junk heap. It does nothing to improve the plight of humanity.
Haven't you also just described Economics? (I frequently describe economics as soothsayers for the rich, telling them what they want to hear, but dressed up in technicallese and mathematics to make it appear as hard science, when it is far from it)
Econ is definitely closer to psychology and sociology than it is to physics or chemistry on the "not science <--> science" spectrum. Econ is at least more quantitative and relies heavily on data (as compared to philosophy, <X> studies, etc). But obv experimentation is more difficult.
Anecdotally, when I was taking Advanced Econometrics as an undergrad, the class was being audited by a professor in the Economics department that, in their education through PhD, had never actually learned any quantitative anaylsis. So there are definitely people out there that are getting by on the fact they can make their ideas sound good convincing enough to pass a journal's review board and a tenure committee.
Not entirely true. Hotels aren’t allowed to advertise prices lower than what’s on booking.com to users who aren’t logged in. If you are a member of the hotel’s loyalty program, you can and do get lower prices.
Hotel brands prefer this because they get you into their system and they get to keep more of the room rate.
This article emotionally feels right, I get it. But … the issue is Amazon isn’t making this enormous profit. And what profit it does make mostly comes from AWS. Even given reinvestment, I don’t think the article really lines up with reality.
I swear I heard Jeff Bezos personally thank all Amazon shoppers and employees for funding Blue Origin. Perhaps you mean that Amazon doesn't make an enormous profit per item, but on the whole...
Amazon net profit was $278mm in Q4 2022. That's peanuts for a company of that size.
Amazon profits are not the same as company valuation. People can value a company highly and the company can make few profits (at least for a period of time). Bezos has made a ton of money because of the valuation, not profits.
Amazon is famous for reinvesting all profits into more growth. An accountant would need to dig through their books to get an idea of the costs that aren't self-serving before meaningfully estimating profits.
Maybe there's an actual main point in here somewhere, that's connected to the headline somehow, but this article is a shining example of how not to write if you want to actually convince people of a point you're trying to make.