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back to article Amazon: We cut prices to scare ourselves into innovation

Amazon Web Services' campaign of price cuts and rapid product development is part of a customer-first strategy designed to prevent stagnation, the company's chief executive has said. In the e-retailer's annual report released on Thursday, Amazon chief Jeff Bezos told investors that Amazon's customer-centric strategy should …

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Build a better mouse trap...

Taking this at face value, it is nice to see a company that has figured out that being proactive to offer a good product at a good price is the best way to generate revenue.

To many companies tend to only add functionality when clients clamor for it (and most of the time what the client is clamoring for is something silly that they don't really need) or decide that if their sales guys repeat how innovative they are enough times, they will be.

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Re: Build a better mouse trap...with cheese.

"...it is nice to see a company that has figured out that being proactive to offer a good product at a good price is the best way to generate revenue."

This is how Amazon came to be what it is today, an overreaching monster. In the late 90's they openly stated they were taking loses to "forward thinking" (remember that buzz term?). However, everyone knew it was to kill off the competition, and that is exactly what they did. Remember "Buy 1 get 1 50% off" on all books? Remember how quickly that vanished after the competition became all but extinct?

Amazon doesn't out service or out perform much of its competition, they just have the money to take losses while waiting for the competition to bleed out. Their business model is very similar to the hyena, and just as graceful.

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Re: Build a better mouse trap...with cheese.

I like hyenas. They're cute. And much better behaved than politicians.

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Stop

Re: Build a better mouse trap...with cheese.

I do remember those, what I also remember is that at that time everyone else was higher then what Amazon is today.

You'll have to excuse my lack feeling for the undercut.

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Coat

Re: Build a better mouse trap...with cheese.

"...what I also remember is that at that time everyone else was higher"

I'm sure you do remember, because memories is all that is left of the competition. Buy hey, support WalMart, be a greeter.

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Re: Build a better mouse trap...with cheese.

Uh, no, their service is also well known for being excellent. People shop with Amazon not just because they're the cheapest, but because their range is vast, they have a good system to support small suppliers, their service is good.

The fact it's often the cheapest place to head is delicious icing.

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Devil

Re: Build a better mouse trap...with Jelly Slugs (use Flobberworms if your nursery is out of them)

I imagine no one is surprised to hear that Jeff Bezos was squiring Emma Watson, aka Hermione Granger, all over Seattle a number of weeks ago. But what isn't known is that pair spent several days at Amazon's West Coast Distribution Center.

Bezos hired Hermione to teach the muggles working for him how to use the spell that flies blenders and microwaves off the shelves, and through the air to the shipping department where mailing labels are affixed.

Word is it was a mess, looked like an 7 point earthquake, broken blenders jars and bent flat screen tvs everywhere.

Witchcraft is one innovation Amazon doesn't have to worry about.

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Anonymous Coward

Re: Build a better mouse trap...with cheese.

I can't say I've been overly impressed with Amazon in any of its guises. Delivery is generally OK with occasional cock-ups and everything else seems much the same as everywhere else I shop on-line. Amazon did let me down on returns once too but then so have others.

Cloud services don't seem much better than elsewhere either. In then end I found it cheaper to do a bit of co-location, it saved me money and boosted performance.

What Amazon is very good at is not paying the same taxes as their competition.

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Anonymous Coward

Re: Capitalism redicovered by a marketroid

So what you're saying is that you object to someone undercutting MS on price?

EADON LOGIC FAIL.

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If only a few more companies had the balls to do this (hello Microsoft, Intel etc).

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wim

If only a few more politicians / governments / countries had the balls to do this.

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Devil

It comes with a price

http://www.motherjones.com/politics/2012/02/mac-mcclelland-free-online-shipping-warehouses-labor

Wage erosion and the dehumanization of "human resources"

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Meh

Re: It comes with a price @4d3fect

"Wage erosion and the dehumanization of "human resources""

At some point the goods have to be handled by meatsacks, but absolutely essential to Amazon's price and service advantages is systems and automation. So (for the size of the company) nothing in the way of call centres or "customer services", and for the most part that gets me a better buying experience.

Now, tell me why Amazon should pay more than minimum wage for unskilled jobs? Most of us on this forum are better paid than average because we're lucky enough to be smart, we've put the effort in to earn academic qualifications, learned relevant technical skills,and we're willing to work hard in complex situations. Amazon's picking and packing staff are free to take other better paid jobs if they want, or to reskill if they want more money.

If you want to support higher wages, then you find yourself a supplier who pays their staff more, rather than expecting me to subsidise your lefty "social conscience".

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Re: It comes with a price @Ledswinger

Well yes.

But I guess you can factor in things liike in the UK we then subsidise these companies with tax credits due to low pay, and the fact they can hire and fire by the day with temps means they have a nice flexible workforce that they don't have to commit to (labour laws etc), which we keep on tap by benefits in between and having to provide an infrastructure that processes benefits at each change.

Oh and at some point you could be in that position, you know that they came for the Jews etc.

Well we let them erode the lowest workers rights and if we stand by and don't care? Then one day in a depressed economy, you could be looking at your skill set and get asked for a massive amount of IT skills, or hell just need a job anywhere, and find yourself being paid a pittance for all the effort that it took to learn it, I mean I know there are no jobs out there like that at the moment and everyone in IT is gainfully employed....

Unfortunately yes I do use Amazon, and things like supermarkets over my local butchers etc. Because I don't have enough spare cash to subsidies the difference can't help think we are shafting ourselves long term though.

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Re: It comes with a price @ledswinger

Don't forget the obscenely large dose of luck that enabled you to get the jobs you've had, rather than one of the majority of jobs going (minimum wage).

I'm very thankful of my job when ever I stop to consider how my life could have turned out.

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Great.

Now let's just hope they decide that paying their taxes and their staff more than minimum wage is just as good an idea!

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Pint

Re: Great.

It IS great for Seattle, as Amazon's massive growth in its north-of-downtown lakeside location is really helping to fill the economic void left by the self-destruction of Washington Mutual bank a few years ago. Meanwhile, the only signs of Microsoft on Seattle's streets are the little green-and-white private WiFi-equipped shuttle buses carrying Microsofties back and forth to the Redmond mothership 15 miles away.

Beer, because Seattle's got excellent microbreweries, too!

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Grovesque

Isn't this analogous to Intel's old "only the paranoid survive" thinking?

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Anonymous Coward

Re: "only the paranoid survive"

Some of us are thriving.

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It works for me

I have been using Amazon from its first few years and I have an embarrassingly long order history to prove it.

I will keep with Amazon as long as I feel they are giving me good value and customer service.

Loyalty pays both to the seller and the customer

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While the main site for Amazon is very useful and I rarely shop elsewhere support and customer service for other subfirms/applications not branded Amazon is bloody awful

Still no support for streaming on Android devices with Lovefilm for example

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