Trump’s Top Economic Adviser Says Amazon Threats Are ‘Not In My Lane’

[txradioguy]

Have you ever heard of a thing called the economy of scale? 

Amazon has made a conscience decision that many of the prime subscribers will not amke enough purchases to consume the amount of their subscription in delivery charges and even if they all do, the service provided will generate enough business to overcome any shipping loss(es) they might incur.   The KEY word is "SERVICE"  someting the USPS knows very little about.

@Bigun someone seems to have trouble understanding the term "bulk rate" when it comes to the cost of shipping things via the Post Office.

They've done this for decades with companies that use the postal service to get products to customers.  This isn't a new concept with the advent of Amazon.

[Bigun]

And not just with the post office. I had to deal with two city government workers today and neither knew what they were doing, didn’t understand their own application forms. I had to explain it to one of them.

@aligncare

 

Try working with a bunch of EPA or OHSA pukes sometime.  I dare ya! 

[Emjay]

The post office kerfuffle is just another case where we have to take the President seriously but not literally.

Kudlow is saying it's not his lane to avoid being the target of a twitter rant by Trump.

As an economic advisor it is very much his lane to advice the President on things like this and to correct him when he's wrong.

@txradioguy   Well, you can't blame Kudlow for wanting to stay out of this mess.  We've already had about 7 different takes and opinions on this.

[Cyber Liberty]

I agree with the USPS delivery cringe. I had a package two weeks ago that was 'out for delivery' by 7AM via USPS. Instead of coming with standard USPS, it came separate and ended up being delivered at 6PM the next day.

I had that exact thing happen, I was so pissed.  The package was a box of nutrolls from my hometown baker.  They were ruined.

[Suppressed]

And that $119 /yr pays for all the shipping for all the packages? 

Really?

Or is the money for shipping coming from some other source?   

For example I just priced a nice trackball mouse for my computer on amazon.   With prime the shipping is free, without prime its $3.99.    One bestbuy.com shipping for the same mouse is $5.49.

Using the USPS shipping cost estimator the cost for a similar box from similar locations is $7.20

So the real question is where is that money coming from?  Is amazon eating that $3.99.  Hard to believe there is that much extra profit in a $25 mouse.

$119 / $3.99 means that about 30 shipments are covered by that Amazon Prime membership.  And remember that once someone has bought Amazon Prime, they are more likely to buy from Amazon, so it helps generate more revenue and profits.  (There's a term for that but I can't recall it right now.)  Stop and think about that 30 shipments.  That's someone ordering something not even every two weeks.  Pretty nice way to get a captive consumer.

USPS also benefits in a similar way, by getting lots of business from a captive consumer who has fewer customer service problems for the USPS than an Average Joe shipping something.  USPS shipping estimates are based on you shipping something that probably has higher than average problems and costs than the "mass produced" Amazon shipments.

Plus, USPS uses lower-cost delivery personnel for Amazon shipments than your Average Joe $7.20 package.

[txradioguy]

@txradioguy
You cant

I cant

Companies with large amounts of stuff to mail can negotiate rates.    I've done it.

I've dealt with it too.

Yeah it's called "bulk rate".  The bulk rate isn't randomly set depending on the company.  As has been painstakingly pointed out to you it's set by the Postal Regulatory Commission.  They have a scale regardless of company that determines how much they charged based on the volume of mail that company ships via the Post Office.  There is no negotiation. 

[txradioguy]

@txradioguy   Well, you can't blame Kudlow for wanting to stay out of this mess.  We've already had about 7 different takes and opinions on this.

Like I said earlier he's just trying to avoid being the next target of a Twitter rant by the boss.

[Suppressed]

I also know that the USPS has lost money every single year.

@driftdiver

Do you understand that the USPS loses money on many sectors of its business, and that it's the express packages like Amazon that offset those loss sectors?

[Bigun]

I've dealt with it too.

Yeah it's called "bulk rate".  The bulk rate isn't randomly set depending on the company.  As has been painstakingly pointed out to you it's set by the Postal Regulatory Commission.  They have a scale regardless of company that determines how much they charged based on the volume of mail that company ships via the Post Office.  There is no negotiation.

The USPS created an entire industry built around their bulk rate system.  I would venture a guess that very few people here have any idea what one has to do to comply with their rules in order to GET those bulk rates.

[Suppressed]

Like I said earlier he's just trying to avoid being the next target of a Twitter rant by the boss.

@txradioguy

Yup.  He probably understands the reality of the situation, but can't contradict POTUS.

[Emjay]

Bernie...like Trump wants to punish those that are successful despite Government roadblocks.

I pay @119 a year to get most of what I buy from Amazon for free.  And for the ability to use the streaming services and the other wonderful features of my Amazon Echo.

And unlike Bernie...I believe if you want something you have to pay for it...not have it handed to you for nothing.

@txradioguy
First Sears took over all the retail business; then Wal-Mart took over the retail business.  Sears did it with the catalog they sent out to everyone and Sears was innovative in the easy return policy.  Wal-Mart did it by carrying everything in one store and with cheaper prices.  Both times other retailers were hurt including the Mom and Pops we love so much.

We cannot let government step in and protect one company over another.  It's called free enterprise.

I love Amazon with all my heart.  I pay the fee yearly also because I order so much.  I don't want them to have an unfair advantage but I don't want them to be punished.

[edpc]

Like I said earlier he's just trying to avoid being the next target of a Twitter rant by the boss.

He's probably learned a couple things after saying Trump would attend the Latin America summit, despite Syria tensions and the whole 'Nikki Haley was confused' escapade.

[txradioguy]

$119 / $3.99 means that about 30 shipments are covered by that Amazon Prime membership. 

@Suppressed only about 15 shipments a year over the last two years have been eligible for Prime delivery.

A lot of what I and my wife have ordered was only eligible for regular shipping options...mainly USPS.

[txradioguy]

@txradioguy
First Sears took over all the retail business; then Wal-Mart took over the retail business.  Sears did it with the catalog they sent out to everyone and Sears was innovative in the easy return policy.  Wal-Mart did it by carrying everything in one store and with cheaper prices.  Both times other retailers were hurt including the Mom and Pops we love so much.

We cannot let government step in and protect one company over another.  It's called free enterprise.

I love Amazon with all my heart.  I pay the fee yearly also because I order so much.  I don't want them to have an unfair advantage but I don't want them to be punished.

Agree with all above.

But the thing is Amazon isn't getting an unfair advantage.  Unless the sheer volume of what they ship on a daily basis is considered unfair.

[driftdiver]

@driftdiver

Do you understand that the USPS loses money on many sectors of its business, and that it's the express packages like Amazon that offset those loss sectors?

@Suppressed
For the simple minded here.

https://www.pbs.org/newshour/nation/u-s-postal-service-marks-11-straight-years-of-financial-loss

U.S. Postal Service marks 11 straight years of financial loss


https://www.thoughtco.com/postal-service-losses-by-year-3321043
Postal Service Net Income/Loss By Year
2015 - $5.1 billion loss
2014 - $5.5 billion loss
2013 - $5 billion loss
2012 - $15.9 billion loss
2011 - $5.1 billion loss
2010 - $8.5 billion loss
2009 - $3.8 billion loss
2008 - $2.8 billion loss
2007 - $5.1 billion loss
2006 - $900 million surplus
2005 - $1.4 billion surplus
2004 - $3.1 billion surplus
2003 - $3.9 billion surplus
2002 - $676 million loss
2001 - $1.7 billion loss

[txradioguy]

The USPS created an entire industry built around their bulk rate system.  I would venture a guess that very few people here have any idea what one has to do to comply with their rules in order to GET those bulk rates.

You're right.

[Cyber Liberty]

@Victoria33
I don't understand the postage war against Amazon. 

@Emjay

It's Trump's private war on Bezos because the latter owns WaPo.  I think it's a stupid battle for a number of reasons.  Bad optics, trying to use a quasi-governmental agency against a man and his newspaper, whatever we may think of WaPo, chief among the bad reasons. 

Who does he think he is, Obama pretending there are Russians under every rock?

[Suppressed]

@Suppressed only about 15 shipments a year over the last two years have been eligible for Prime delivery.

A lot of what I and my wife have ordered was only eligible for regular shipping options...mainly USPS.

And it discounts the fact that if you order a certain dollar amount, you get free shipping (albeit not 2-day) from Amazon anyway.   Gee...there's an economy of scale.  Imagine that!



BTW, most people don't realize that "2-day shipping" doesn't mean you'll get your stuff in 2 days.  It means 2 days to arrive after it's shipped.  Different items have different speeds to get out the door.  That's why sometimes it takes longer than 2 days to arrive.

Amazon claims that their average time-to-ship has improved, but it sure seems to me that things don't arrive as fast as they used to.

[driftdiver]

The USPS created an entire industry built around their bulk rate system.  I would venture a guess that very few people here have any idea what one has to do to comply with their rules in order to GET those bulk rates.

@Bigun
Its really tough.....

Sort the mail by zip code

[roamer_1]

[...] they are more likely to buy from Amazon, so it helps generate more revenue and profits.  (There's a term for that but I can't recall it right now.)   [...]

The term you are looking for is a 'lost leader', where an obvious loss generates enough extra business to justify the loss. A local diner having 10 cent coffee would be an example... No doubt they lose on coffee... but the attraction sells more meals.

@Suppressed

[Cyber Liberty]

@Suppressed
For the simple minded here.

https://www.pbs.org/newshour/nation/u-s-postal-service-marks-11-straight-years-of-financial-loss

U.S. Postal Service marks 11 straight years of financial loss


https://www.thoughtco.com/postal-service-losses-by-year-3321043
Postal Service Net Income/Loss By Year
2015 - $5.1 billion loss
2014 - $5.5 billion loss
2013 - $5 billion loss
2012 - $15.9 billion loss
2011 - $5.1 billion loss
2010 - $8.5 billion loss
2009 - $3.8 billion loss
2008 - $2.8 billion loss
2007 - $5.1 billion loss
2006 - $900 million surplus
2005 - $1.4 billion surplus
2004 - $3.1 billion surplus
2003 - $3.9 billion surplus
2002 - $676 million loss
2001 - $1.7 billion loss

Appears to me the Post Office has been losing money faster since Amazon started AMZL.  Your numbers actually refute your own point, I suggest you make up another point.

[Suppressed]

@Suppressed
For the simple minded here.

https://www.pbs.org/newshour/nation/u-s-postal-service-marks-11-straight-years-of-financial-loss

U.S. Postal Service marks 11 straight years of financial loss


https://www.thoughtco.com/postal-service-losses-by-year-3321043
Postal Service Net Income/Loss By Year
2015 - $5.1 billion loss
2014 - $5.5 billion loss
2013 - $5 billion loss
2012 - $15.9 billion loss
2011 - $5.1 billion loss
2010 - $8.5 billion loss
2009 - $3.8 billion loss
2008 - $2.8 billion loss
2007 - $5.1 billion loss
2006 - $900 million surplus
2005 - $1.4 billion surplus
2004 - $3.1 billion surplus
2003 - $3.9 billion surplus
2002 - $676 million loss
2001 - $1.7 billion loss

@driftdiver
Not disagreeing with the bottom line.  I'm disagreeing that express package service is part of that loss.  Perhaps I should have said, ". . .the express packages like Amazon that partially offset those loss sectors".

[Emjay]

Trumps own words show this isn't about Amazon and it's about what's said about him in the Washington Post.

There's no conspiracy theory.  It's the truth.  Trump is threatening Bezos' main source of income because of what another company he owns prints about him on it's pages.

It's called extortion.

@txradioguy   I don't believe that.  It cannot be extortion because Trump cannot do it.  If Bezos has anything to do with Trump's threat at all, it's what's called and idle threat just to annoy someone who's been annoying you for a year.

I take Trump's side against the media all the time because, while Trump may lie occasionally, the press lies constantly.

[ABX]

@driftdiver
Not disagreeing with the bottom line.  I'm disagreeing that express package service is part of that loss.  Perhaps I should have said, ". . .the express packages like Amazon that partially offset those loss sectors".

All of those losses can be firmly planted as the fault of the government. If they didn't have Amazon's (and other big box retailers) bulk package delivery, those losses would be about 25% more.

They are pulling the Bernie Sander's argument that Amazon should pay more, to redistribute their wealth and deflecting from the fact the loss is the fault of the government. (several links upthread on this).

[Cyber Liberty]

And it discounts the fact that if you order a certain dollar amount, you get free shipping (albeit not 2-day) from Amazon anyway.   Gee...there's an economy of scale.  Imagine that!



BTW, most people don't realize that "2-day shipping" doesn't mean you'll get your stuff in 2 days.  It means 2 days to arrive after it's shipped.  Different items have different speeds to get out the door.  That's why sometimes it takes longer than 2 days to arrive.

Amazon claims that their average time-to-ship has improved, but it sure seems to me that things don't arrive as fast as they used to.

Then there's the foreign stuff.  I get my toothpaste shipped in from UK, and it takes 3-4 weeks to get it via Royal Mail.