by Chris Smith, 10 months ago
All the main companies in the tech business are posting their financial details for the second quarter of the year, ending on June 30, and after we looked at various players in the mobile business…
We used to be the best of friends, Amazon and me. The online retailer sparked my interest in shopping without all the unpleasant walking around in soulless malls or on busy high streets. Beating the Christmas rush by sitting at home and buying all my presents from Amazon became an annual event that made me feel smug.
For birthdays or Christmas, when people asked what I wanted, Amazon vouchers were an acceptable answer, while cash wasn’t, and they seemed like the closest alternative you could get. Computer monitors, keyboards, HDTVs, jumpers, trainers, printer ink, an espresso machine, books, Blu-rays, toys for the kids…the list of my purchases over the years has been long and varied. When the Kindle came out I was opposed to the eBook revolution, but after trying a friend’s device I took the plunge and found I liked it. A lightweight library in your hand and the ability to read one-handed without getting cramp or having to turn pages was undeniably practical and the eBooks were so much cheaper. I even bought one for my wife.
I can still remember the day the magic died. I went to turn on my Kindle and was greeted by a series of grey lines with a tiny readable portion of screen at the bottom. Switch off and on again, reboot, plug into my desktop, phone customer support, run through exactly the same process again, only to be told there’s nothing I can do and the Kindle is fit for the bin. It was just over warranty and I end up with a promise of a small discount on a new Kindle and would I like to just order that now? No I wouldn’t thank you very much.
That early crack in our relationship started to grow over the next few weeks, it spread, it widened, and eventually the ceiling came tumbling down on my head. I have seven reasons to stop using Amazon and I’m going to share them with you now.
Since we just discussed the death of my Kindle we’ll start there. I realize that electronics don’t last forever and something as cheap as the Kindle is inevitably not long for this world. When my first Kindle died just outside warranty I was annoyed, but it was only when the Kindle I had bought for my wife did exactly the same thing that I started to doubt Amazon’s commitment to quality. The customer service is reputedly good if you’re within warranty with fast, no quibble replacements. I’ve even read online accounts of people getting replacements out of warranty, but I wasn’t offered one, so I’m not sure how that works.
Take a look online and you’ll find a mountain of reports of Kindles dying just outside warranty. You begin to wonder about built-in redundancy, like washing machines and fridges. The situation is even more annoying with a Kindle because you’ve invested in Amazon’s ecosystem. If it wasn’t for the Kindle app I would have felt blackmailed into getting a new device from Amazon. As it is reading on the S3 or the Nexus 7 just isn’t the same. I miss the comfort of the Kindle, but I’m not going to pay more money for something that breaks so easily without any obvious external stimulus (neither of our Kindles was dropped or bumped).
You know the difference between tax evasion and tax avoidance? Tax avoidance is legal for some reason best known to millionaires, multinationals, and their army of legal drones. I don’t know how big a story it was elsewhere, but in the UK tax avoidance hit the headlines in a major way. Amazon funnels its sales in the UK through Luxembourg where it claimed a turnover of £6.5 billion in 2010. Despite a reported turnover of £207 million in the UK in 2011 the company paid just £1.8 million in tax. Estimates suggest Amazon should have paid UK corporation tax of up to £100 million over the three years leading up to 2011 and yet it actually incurred a tax bill of just £3 million in nine years from 2003 to 2011.
Incidentally Google does the same thing, funneling profits through Ireland. The only company to publicly capitulate and agree to pay more was Starbucks and that had a little something to do with protesters occupying their stores. Amazon and Google refused to admit any wrong doing and hid behind their investors claiming it would be impossible for them to voluntarily pay more tax, and that the rules are to blame. With a Tory government currently in power, intent on abolishing benefits, criminalizing the poor and privatizing everything, I won’t be holding my breath for those loopholes to be tightened.
Naturally Amazon was quick to point out that it does contribute to the UK economy by creating jobs. It employs lots of workers on minimum wage to staff its gigantic distribution centers and they all have to pay proper taxes. Reports of sweatshop conditions, heat and mandatory overtime, and a culture of bullying have popped up regularly over the years. There was a recent protest here in Scotland about low wages and poor working conditions. Amazon also takes subsidies to locate its distribution centers in specific places, but if it doesn’t get preferential treatment then it just closes up, as it did in Texas.
The publishing industry has been the most vociferous about Amazon’s business practices with regard to squeezing down prices. It’s something that also impacts on app and game developers because Amazon reserves the right to put your app on sale or even give it away free for a day. The idea that developers will benefit doesn’t seem to hold true, just look at Shifty Jelly’s Amazon App Store experience. Consumers love bargains and giveaways, but it’s harsh to enforce them. The people who make the things we enjoy are entitled to fair recompense.
If Amazon’s success with aggressive discounting, efficient service and generally low prices is achieved by avoiding paying tax and treating workers poorly then it is gaining an unfair advantage from morally dubious tactics. Book stores are dying, the high street in general is dying, and one of the main assassins is putting considerably less into your economy that the businesses it is killing. It can crow about creating thousands of jobs, but when they come at the cost of thousands of jobs elsewhere and they pay less with worse conditions, is it really a good thing?
Here’s a reason I know Android fans will get. Amazon decides to use the Android platform, but then cuts out Google as completely as it can. The decision to lock you into Amazon’s ecosystem of content is entirely deliberate and it’s all about putting Amazon’s profits ahead of the consumer experience. There is no way you can argue that the Kindle tablet range is better without Google and the wider range of Android apps available through the Play Store. Amazon sells the hardware at knock down prices to try and tempt you into its ecosystem because it wants you to invest and hopes you’ll find it hard to leave down the line.
A lot of Amazon supporters will insist that the prices are just too good to resist, but how often have you pulled the trigger on Amazon only to find the same product discounted further the next week or offered cheaper on another site. Amazon sells itself as a one-stop shop and it can afford to have loss leaders because it tempts you to buy all your shopping there and some of the prices are far from the lowest around. How the Amazon pricing algorithm works is a mystery, but you can be sure that it returns big profits for the company. The next time you’re shopping don’t assume that Amazon prices are the lowest, do a quick search and you might be surprised at what you find.
I suspect many of you will feel that Amazon is just engaging in sensible business practices that ensure maximum profit, but in the current economic situation many of us feel that it’s just plain greed. Those profits are concentrated in the hands of a few and it doesn’t have to be that way. Plenty of successful companies pay their fair share of taxes and ensure that working conditions and wages are good. It’s not like the company wouldn’t survive without exploiting people and forgetting ethics.
There’s only one thing that Amazon will understand and that’s losing customers because it will hit the bottom line, the only thing the company seems to be focused on. I’m not going to use Amazon anymore. How about you?