December 4, 2018

Amazon has been in the headlines a lot this fall. From lower-than-expected earnings to advanced speculation - and subsequent uproar - over the location(s) of HQ2, the e-commerce giant has experienced its fair share of controversy.

Even against this flurry of reporting, few announcements have been more divisive than the company's move to give its workers in the U.S. a minimum wage of $15 per hour. If it seems strange that a wage rise would lead to negative press, it's time to look a little closer at what the company is proposing.

As in other questionable cases with Amazon, not everything is as compelling as it might seem on the surface.

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The Influences Behind Amazon 15

In its announcement last month, Amazon clearly indicated its desire to bring others in line with a $15/hour minimum wage. Jay Carney, Senior Vice President of Amazon Global Corporate Affairs, highlighted that the existing federal rate of $7.25 has been in place for almost a decade and confirmed his company's advocacy for an increase.

While Carney stopped short of specifically calling for a $15 federal rate, the implications were clear: Amazon is now ahead of the curve on labor relations and the rest of the country must catch up.

Founder and CEO Jeff Bezos was equally quick to claim the high ground, saying:

“We listened to our critics, thought hard about what we wanted to do, and decided we want to lead. We’re excited about this change and encourage our competitors and other large employers to join us.”

The praise came pouring in from outside as well.

Senator Bernie Sanders, who earlier this year had legislatively pilloried Amazon by introducing the Stop BEZOS Act, quickly changed his tune. In a statement hot on the heels of Amazon's announcement Sanders said: "I want to give credit where credit is due. And I want to congratulate Mr. Bezos for doing exactly the right thing."

The key here is that where Amazon goes, others must follow.

Rather than bearing all of the bad press and controversy over its work practices, which aren't in fact directly addressed by this move, the company can now put that spotlight on others.

Thankfully, not everyone has taken Amazon's announcement at face value.

Dig beneath the surface and you'll find that certain bonuses and stock options have been removed by the company just as it moves to a $15 wage. What Bezos is so benevolently giving with one hand, he is simultaneously taking away from the long-term finances of employees with the other.

The Wages of Sin

As comedian Hasan Minhaj explores in the video below, there are still significant issues at Amazon despite the raised wage.

From allegations of worker exploitation to ongoing concerns about contravening antitrust rules, there are plenty of problems remaining for Jeff Bezos as his company continues its relentless expansion.

Fulfillment employees in its sprawling warehouses have frequently complained about excruciating schedules and being worked to the bone. Just this week, in the middle of the hectic holiday schedule, 24 workers were hospitalized at an Amazon fulfillment center in New Jersey.

Even as some laud the company for upping its minimum wage, questions are consistently raised over the physical and mental cost of what Amazon demands from those it employs.

Lawmakers from across the political spectrum have also raised concerns about how much power Amazon now wields across many different industries. Having made inroads into the complex grocery sector by purchasing Whole Foods Market in 2017, analysts now expect the company to make a play for the prescription drugs market and increase its share in other key sectors. Then there's also the small matter of Amazon Web Services (AWS), which hosts millions of online enterprises and is set to contribute around $20 billion to overall revenue in 2018.

Combined with a prevailing distrust and skepticism toward technology companies like Facebook and Google, Amazon's vast scale and domination of online selling could signal trouble ahead.

There is a growing clamor for the tech sector to be more closely monitored and regulated, so it seems inevitable that Amazon will have to answer to its critics sooner rather than later.

Amazon's (Enormous) Bottom Line

When all is said and done, it's unlikely that any of these criticisms will stop Amazon in its tracks. Its momentum is now too great and consumers are sold on the shopping solutions it has catalyzed.

With more than $150 billion in revenue and a CEO who is considered the most powerful in the world, the company surpassed Apple as the most valuable global brand this year and sent its share price soaring. Similarly, Bezos has a personal wealth of $165 billion, according to the Bloomberg Billionaires Index.

Nonetheless, it is still important to call America's most dominant corporation on its missteps and hold it to the highest possible standards.

Where Amazon leads, many industries follow, making responsible growth and employee protections all the more important. Labor complaints and limited income are emblematic of issues facing the wider U.S. economy and, more directly, limiting the social mobility of American workers.

The relatively quick recovery experienced by corporations following the economic collapse a decade ago has not yet been passed on to the country's workforce. The very consumers who have fueled Amazon's meteoric rise are being left behind. They need employers to step up and offer not only short-term wage gains but also long-term investment opportunities and benefits that ease their financial burden.

Now, industry-leading corporations have an opportunity to lead this recovery.

With its simultaneous efforts to strip employees of stock options and deny them representation, however, the question remains whether Amazon is willing to cut into its bottom line in order to raise up its workers and elevate the brand's reputation by doing so.

September 29, 2018

The question of FBA vs. 3PL – or Fulfillment by Amazon vs. a third-party fulfillment partner, to be complete – is often skewed by brand recognition.

Everyone knows about Amazon’s reach and influence by now, so it’s easy to assume that means they’ll provide the best experience for your company and clients.

In reality, there are many downsides to moving your orders with Amazon, some of which we’ll cover in this article. Continue reading FBA vs. 3PL: Notes from the CPG Industry on Which to Choose for Order Fulfillment

October 26, 2017

Many in retail are rightly preoccupied with the most disruptive force in their business: Amazon. More specifically, they want to better understand the costs of selling on Amazon.

From our perspective, Amazon is another retailer we need to know how to ship to, and potentially learn from as they are in the business of fulfillment. But that is not how many clients view this increasingly powerful force in the retail world, and the world in general. Continue reading The Costs of Selling on Amazon via FBA

July 17, 2017

Today’s retail environment is a very different one compared to even ten years ago. We all know about the rise of e-commerce and malls struggling to fill physical retail space. However, there’s a lot more to this changing landscape than just consumers choosing websites instead of stores. Continue reading The Changing Face of Retail in America

June 29, 2017

Retailers and consumers will have a new cost to contend with for the 2017 peak season. For the first time in its history, UPS has announced that it will add a surcharge to deliveries made during much of the holiday season.

It remains to be seen how competitors will respond, but shippers must be prepared for the likelihood that the other half of the parcel duopoly FedEx will follow suit. If all peak season shipments are subject to a new surcharge, it will undoubtedly influence how retailers prepare for the all-important holiday period.

Continue reading What the UPS New Peak Charge Means For Your Business