Who Knew?Amazon’s Human Problem
Amazon is traditionally criticized as a giant big-box retailer putting physical stores out of business and disrupting local communities. The tech press tends to give Amazon a lot of slack for two reasons: first, they disrupt legacy business models by offering better service than what many of these local businesses can afford. Secondly, the company has been incredibly tech-forward over the years. With AWS, AmazonMP3 and its line of Kindle devices, Amazon has led the way in making technological innovation available to the mass market.
Both points are incredibly valid. My problem with Amazon, instead, centers around the level of respect it has for its customers and employees.
Amazon makes its business decisions with the next five to seven years in mind. So it’s willing to take a loss in the current quarter if it might reap huge rewards a couple of years down the line. That’s why it sells the Kindle Fire for $2.70 less than it costs to build. It’s why Bezos is currently spending a fortune on long term growth, to the extent that their profit margin might be zero for Q4 2011.
It’s also why Amazon strives to keep its expenses as low as possible, so that they can make these decisions without placing the company in serious jeopardy. So, Amazon manufactures terrible products because they know customers will get them anyway - and because they’re locked into the company’s content ecosystem, they’ll buy replacements when the devices inevitably break. They also choose to keep paramedics onsite and yell at employees suffering from heat exhaustion rather than installing air conditioning in its East Coast warehouses. And they produce horror stories from former corporate employees on how they view talent as easily disposable and replaceable.
Every article I linked to above was published in 2011. The negative press is starting to leak out from the edges of this company, and it will get worse in 2012. I predict that either this year or in 2013, there will be a watershed moment in public opinion that will turn the U.S. political left and segments of the tech press against the company, in much the same way that activist groups launched a series of protests against Walmart in 2005. A corporation disrupting legacy business models is one thing. A business treating people inhumanely is quite another.
