ETHICAL, adj. An archaic term. In the world of commerce, it has been supplanted to some extent by the concept “legal,” and to a great extent by the concept “detectable.”
–The Devil’s Dictionaries. Definition by Chaz Bufe.
ETHICAL, adj. An archaic term. In the world of commerce, it has been supplanted to some extent by the concept “legal,” and to a great extent by the concept “detectable.”
–The Devil’s Dictionaries. Definition by Chaz Bufe.
Publishing industry newsletter Shelf Awareness reports that in the third quarter Amazon lost a staggering $437 million, compared with a $41 million loss a year ago, while net sales were up 21.6% over the same period in 2013 to $20.58 billion., which was below industry forecasts. (The losses were in part due to the total flop of Amazon’s Fire phone, which was years in development and cost Amazon untold millions in R&D.) As a result of its continuing losses (95 cents a share in the third quarter), its below-forecast sales growth, and its continued large issuings of stock to itsexecutives ($1.4 billion worth over the last year, with another $470 million coming in the fourth quarter), Amazon–which has never paid a dividend to its stockholders–has seen its stock price drop over 30% since its all-time high of $408.06 in late 2013 to $279.75 now.
Summing up the situation, Matthew Finston, on the financial site SeekingAlpha, writes: “The company gets to handsomely award management, exploit its employees, short-change investors [by diluting stock], and when all is said and done Amazon gets a nice little tax deduction from Uncle Sam.”
Interestingly, Amazon’s media sales (books, e-books, movies, tv shows) grew only 4.8% over its third-quarter 2013 sales. One suspects that physical book sales were the least robust in that area, likely because of the huge amount of adverse publicity Amazon generated for itself via its very public dispute with Hachette over e-book pricing. This 4.8% growth is by far the slowest Amazon has ever experienced in that area, and is far from impressive given the ever-expanding number of titles in all of its “media sales” categories.
Finally, one factor nobody in the book biz is talking about that accounts in part for Amazon’s previously very robust growth in book sales is, quite probably, falling working and middle class income. Average income fell again last year by a small amount ($79), but median income (half above, half below) has fallen a staggering 12% since G.W. Bush took office in 2001, and it has not recovered under Obama’s corporate-friendly regime. When people are feeling pressured economically, they cut back on spending, and they become very price conscious. In the case of books, that pushes them into the arms of Amazon, which uses books (7% of its total sales) as loss leaders. (A great many of the other products Amazon offers are not bargains.)
For another take on Amazon, we’d recommend Jim Hightower’s piece on Alternet.