Tuesday, June 16, 2020 – Amazon

I ordered toilet paper on Amazon on April 22 with a promised 5-day delivery. When I had not received it by last week, I wrote a note to the supplier on the Amazon website. Low and behold, it arrived yesterday. Guess someone just needed a nudge. Also, on my walks I have witnessed Amazon drivers jump out of their vans and sprint to front doors with packages.

According to Wikipedia, Amazon.com Inc. is an American multinational technology company based in Seattle that focuses on e-commerce, cloud computing digital streaming and artificial intelligence. It is considered one of the Big Four technology companies, along with Google, Apple and Microsoft. It has been referred to as "one of the most influential economic and cultural forces in the world" as well as the world's most valuable brand.

Amazon is known for its disruption of well-established industries through technological innovation and mass scale. It is the largest internet company by revenue in the world. It is the second largest private employer in the United States and one of the world’s most valuable companies.

Jeff Bezos

Amazon was founded by Jeff Bezos in Bellevue, Washington, on July 5, 1994. The company started as an online marketplace for books but expanded to sell electronics, software, video games, apparel, furniture, food, toys, and jewelry. In 2015, Amazon surpassed Walmart as the most valuable retailer in the United States by market capitalization. In 2017, Amazon acquired Whole Foods Market for $13.4 billion, substantially increasing Amazon's footprint as a physical retailer. In 2018, Bezos announced that its two-day delivery service, Amazon Prime, had surpassed 100 million subscribers worldwide.

Amazon distributes downloads and streaming of video, music, and audiobooks through its Prime Video, Amazon Music, Twitch and Audible subsidiaries. The company also has a publishing arm, Amazon Publishing; a film and television studio, Amazon Studios; and a cloud computing subsidiary, Amazon Web Services. It produces consumer electronics including Kindle e-readers, Fire tablets, Fire TV and Echo devices. In addition, Amazon acquisitions include Ring, Twitch, Whole Foods Market and IMDb. Among various controversies, the company has been criticized for technological surveillance overreach a hypercompetitive and demanding work culture, tax avoidance and anti-competitive practices.

Founding

The company was founded as a result of what Jeff Bezos called his "regret minimization framework," which described his efforts to fend off any regrets for not participating sooner in the internet business boom during that time. In 1994, Bezos left his employment as vice-president of D.E. Shaw & Co., a Wall Street firm, and moved to Seattle, Washington, where he began to work on a business plan for what would become Amazon.com.

On July 5, 1994, Bezos initially incorporated the company in Washington state with the name Cadabra, Inc. After a few months, he changed the name to Amazon.com Inc. because a lawyer misheard its original name as "cadaver". In its early days, the company was operated out of the garage of Bezos's house on Northeast 28th Street in Bellevue, Washington. In September 1994, Bezos purchased the domain name relentless.com and briefly considered naming his online store Relentless, but friends told him the name sounded a bit sinister. The domain is still owned by Bezos and still redirects to the retailer.

Amazon River

Choosing a name

Bezos selected the name Amazon by looking through a dictionary; he settled on "Amazon" because it was a place that was "exotic and different", just as he had envisioned for his Internet enterprise. The Amazon River, he noted, was the biggest river in the world, and he planned to make his store the biggest bookstore in the world. Additionally, a name that began with "A" was preferred because it would probably be at the top of an alphabetized list. Bezos placed a premium on his head start in building a brand and told a reporter, "There's nothing about our model that can't be copied over time. But you know, McDonald’s got copied. And it's still built a huge, multibillion-dollar company. A lot of it comes down to the brand name. Brand names are more important online than they are in the physical world."

Online bookstore and IPO

After reading a report about the future of the internet that projected annual web commerce growth at 2,300%, Bezos created a list of 20 products that could be marketed online. He narrowed the list to what he felt were the five most promising products, which included: compact discs, computer hardware, computer software, videos and books. Bezos finally decided that his new business would sell books online, because of the large worldwide demand for literature, the low unit price for books and the huge number of titles available in print. Amazon was founded in the garage of Bezos' rented home in Bellevue, Washington. His parents invested almost $250,000 in the start-up.

In July 1995, the company began service as an online bookstore. The first book sold on Amazon.com was Douglas Hofstadter’s “Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought.” In the first two months of business, Amazon sold to all 50 states and over 45 countries. Within two months, Amazon's sales were up to $20,000/week. In October 1995, the company announced itself to the public. In 1996, it was reincorporated in Delaware. Amazon issued its initial public offering of stock on May 15, 1997, at $18 per share, trading under the NASDAQ stock exchange symbol AMZN.

Barnes & Noble sued Amazon on May 12, 1997, alleging that Amazon's claim to be "the world's largest bookstore" was false because it "...isn't a bookstore at all. It's a book broker." The suit was later settled out of court, and Amazon continued to make the same claim. Walmart sued Amazon on October 16, 1998, alleging that Amazon had stolen Walmart's trade secrets by hiring former Walmart executives. Although this suit was also settled out of court, it caused Amazon to implement internal restrictions and the reassignment of the former Walmart executives.

In 1999, Time magazine named Bezos the Person of the Year when it recognized the company's success in popularizing online shopping.

2000s

Since June 19, 2000, Amazon's logotype has featured a curved arrow leading from A to Z — representing that the company carries every product from A to Z — with the arrow-shaped like a smile.

According to sources, Amazon did not expect to make a profit for four to five years. This comparatively slow growth caused stockholders to complain that the company was not reaching profitability fast enough to justify their investment or even survive in the long-term. In 2001, the dot-com bubble burst, destroying many e-companies in the process. But Amazon survived and moved forward beyond the tech crash to become a huge player in online sales. The company finally turned its first profit in the fourth quarter of 2001: 1¢ per share, on revenues of more than $1 billion. This profit margin — though extremely modest — proved to skeptics that Bezos' unconventional business model could succeed.

Amazon employees

2010s to present

In 2011, Amazon had 30,000 full-time employees in the US, and by the end of 2016, it had 180,000 employees.

In 2014, Amazon launched the Fire Phone. It was meant to deliver media streaming options, but the venture failed, resulting in Amazon registering a $170 million loss. In August of the same year, Amazon would finalize the acquisition of Twitch, a social video gaming streaming site for $970 million. This new acquisition would be integrated into the game production division of Amazon.

In June 2017, Amazon announced that it would acquire Whole Foods, a high-end supermarket chain with over 400 stores, for $13.4 billion. The acquisition was seen by media experts as a move to strengthen its physical holdings and challenge Walmart’s supremacy as a brick and mortar retailer. This sentiment was heightened by the fact that the announcement coincided with Walmart's purchase of men's apparel company Bonobos. On August 23, 2017, Whole Foods shareholders, as well as the Federal Trade Commission, approved the deal.

As 2017 came to a close, Amazon had over 566,000 employees worldwide.

According to an August 8, 2018 story in Bloomberg Businessweek, Amazon has about a five percent share of US retail spending (excluding cars and car parts and visits to restaurants and bars), and a 43.5 share of American online spending in 2018. The forecast is for Amazon to own 49 percent of the total American online spending in 2018, with two-thirds of Amazon's revenue coming from the US.

Amazon launched the last-mile delivery program and ordered 20,000 Mercedes-Benz Sprinter vans for the service in September 2018.

To make data transfers from space cheaper and easier Amazon added 12 antennas for the satellite data in November 2018.

Amazon will generate $258.22 billion in US retail ecommerce sales this year, up 29.2% over last year. Amazon's Marketplace sales will represent an increasingly dominant portion of its ecommerce business — 68.0% this year, compared with 32.0% for Amazon direct sales. By the end of 2018, sales generated from Amazon's Marketplace will be more than double that of Amazon's direct sales in the U.S.

Crystal City HQ2 rendering

HQ2

In September 2017, Amazon announced plans to locate a second headquarters in a metropolitan area with at least a million people. Cities needed to submit their presentations by October 19, 2017 for the project called HQ2. The $5 billion second headquarters, starting with 500,000 square feet and eventually expanding to as much as 8 million square feet, may have as many as 50,000 employees.

In November 2018, Amazon announced it would open its highly sought-after new headquarters, known as HQ2 in Long Island City, Queens, New York City, and in the Crystal City neighborhood of Arlington, Virginia. On February 14, 2019, Amazon announced it was not moving forward with plans to build HQ2 in Queens but would instead focus solely on the Arlington location. The company plans to locate at least 25,000 employees at HQ2 by 2030 and will invest more than US$2.5 billion to establish its new headquarters in Crystal City — as well as neighboring Pentagon City and Potomac Yard — an area jointly marketed as "National Landing." The announcement also created a new partnership with Virginia Tech to develop a revolutionary Innovation Campus to fill demand for high-tech talent in National Landing and beyond.

Amazon Go

On January 22, 2018, Amazon Go, a store that uses cameras and sensors to detect items that a shopper grabs off shelves and automatically charges a shopper's Amazon account, was opened to the general public in Seattle. Customers scan their Amazon Go app as they enter and are required to have an Amazon Go app installed on their smartphone and a linked Amazon account to be able to enter. The technology is meant to eliminate the need for checkout lines. Amazon Go was initially opened for Amazon employees in December 2016. By the end of 2018, there will be 8 total Amazon Go stores located in Seattle, Chicago, San Francisco and New York. Amazon has plans to open as many as 3,000 Amazon Go locations across the United States by 2021. Just Walk Out Technology automatically detects when products are taken from or returned to the shelves and keeps track of them in a virtual cart. When you’re done shopping, you can just leave the store. Later, we’ll send you a receipt and charge your Amazon account.

COVID-19 walkout

However, all is not rosy at the world of Amazon. At the end of March 2020, some workers of the Staten Island warehouse staged a walkout in protest of the poor health conditions at their workplace during the COVID-19 pandemic. One of the organizers, Chris Smalls, was first put on quarantine without anybody else being quarantined and soon afterwards was fired from the company.

Amazon drivers

According to Caroline O’Donovan’s and Ken Bensinger’s Sept. 6, 2019 article “The Cost of Next-Day Delivery" in BuzzFeed News, Amazon is the biggest retailer on the planet — with customers in 180 countries — and in its relentless bid to offer ever-faster delivery at ever-lower costs, it has built a national delivery system from the ground up. In under six years, Amazon has created a sprawling, decentralized network of thousands of vans operating in and around nearly every major metropolitan area in the country, dropping nearly 5 million packages on America’s doorsteps seven days a week.

Amazon drivers say they often have to deliver upward of 250 packages a day — and sometimes far more than that — which works out to a dizzying pace of less than two minutes per package based on an eight-hour shift.

The system sheds costs and liability, even as it grows at lightning speed, by using stand-alone companies to pick up packages directly from Amazon facilities and deliver them to the consumer — covering what’s known in the industry as “the last mile.” Amazon goes further than gig economy companies such as Uber, which insist its drivers are independent contractors with no rights as employees. By contracting instead with third-party companies, which in turn employ drivers, Amazon divorces itself from the people delivering its packages.

That means when things go wrong, as they often do under the intense pressure created by Amazon’s punishing targets — when workers are abused or underpaid, when overstretched delivery companies fall into bankruptcy or when innocent people are killed or maimed by errant drivers — the system allows Amazon to wash its hands of any responsibility.

This homegrown network that makes it possible to offer the amazing convenience of next-day and even same-day delivery has become a cornerstone of Amazon’s market dominance. By some estimates, nearly half of its packages in the U.S. are now delivered this way. And the Seattle-based giant dictates almost every aspect of that operation, down to what drivers wear, what vans they use, what routes they follow and how many packages they must deliver each day.

Public records document hundreds of road wrecks involving vehicles delivering Amazon packages in the past five years, with Amazon itself named as a defendant in at least 100 lawsuits filed in the wake of accidents, including at least six fatalities and numerous serious injuries.

Often with little training, and at times piloting vans in dangerous states of disrepair, Amazon drivers have crashed into cars, bicycles, houses, people and pets. And under constant pressure to deliver ever more packages, drivers have piled parcels so high on their dashboards that they couldn’t see out the windshield — causing at least one serious collision.

In some of the cases in which Amazon was sued over road accidents, the drivers had been allowed to take the wheel despite previous convictions for traffic infractions.

Delivering packages for Amazon can itself be a perilous job. Drivers have reportedly been punched, bitten, carjacked, robbed and shot — and at least two have died in recent years as a result of road accidents that occurred on the job.

Amazon denies any responsibility for the conditions in which drivers work, but it has continued to contract with at least a dozen companies that have been repeatedly sued or cited by regulators for alleged labor violations, including failing to pay overtime, denying workers breaks, discrimination, sexual harassment, and other forms of employee mistreatment.

And when one group in Michigan voted to join the teamsters in protest against shoddy conditions and punishing hours without overtime pay, Amazon officials acted swiftly to counter further unionization efforts.

In Southern California, Illinois, and Texas, Amazon continues to work with a firm beset by a staggering array of lawsuits from its own drivers, who said they weren’t paid properly, and from pedestrians, motorists, and cyclists, who said they were injured in collisions with the company’s trucks — even after its chief executive was accused by the firm’s own CFO of embezzling more than $1.5 million to fund an apparent gambling spree in Las Vegas.

Two drivers for a different delivery company operating in the Los Angeles area said they were forced to skip meals, ordered to urinate in bottles rather than stop for bathroom breaks and advised to speed and not wear seat belts to ensure they delivered more packages in less time.