Home > Articles > Amazon.com (AMZN) is the Secular Short of 2012

Amazon.com (AMZN) is the Secular Short of 2012

I believe the market is underestimating the deteriorating underlying business trends, the impact of the secular shift of physical media to digital media along with the competition risk from Apple and Google, and the weak positioning of Amazon’s hardware tablet strategy.

Uneconomic Revenue Goosed by Free Shipping Subsidization

The bull case for Amazon has always been it will continue to grow at rapid rates for the next 3-5 years and if you put some decent operating margin on the out year, you will get fantastic earnings power. However the problem with this argument is the wheels are starting to fall off the wagon.

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Back in the dot.com bubble there was a company called Kozmo.com that offered free 1 hour shipping of array of small goods like books, videos, magazines, etc. To my amazement, I tried the service and ordered a pack of gum. Within an hour someone was at my door to deliver it. The company reported amazing revenue growth. Obviously investors should have discounted that sales growth as it was an “uneconomic” business model.

Amazon is doing a similar thing by subsidizing free shipping. Anecdotally I am hearing customers who have Amazon Prime feel compelled to order small items to take advantage of the free 2-day shipping benefit. They are ordering batteries, Listerine (Link), toilet paper, water bottles, etc. all with free 2-day shipping, which is goosing Amazon’s revenue without helping their bottom line.

If you sell $1.00 of value for 99c, you will show amazing revenue growth. It’s all fine and dandy until your free shipping offering hits critical mass with take-up accelerating and the losses start ballooning. Over the past few quarters, Amazon’s operating income growth has plummeted and the % of revenue of net shipping losses (you can find these numbers deep in the 10Q) has accelerated higher from 3.8% to 5.4%. In other words, free shipping losses are increasing at a rapid clip from a loss of $562 million in Q4-2010 to $934 million in Q4-2011. In fact Amazon got stung with a stunning $2.4 billion in shipping losses in 2011.

The problem is this is an unstoppable trend as the more people use it, the more losses will pile up. To make matters worse, UPS raises shipping costs annually at the beginning of every year (+4.9% on 1/2/12). At some point, Amazon is either going to have to cut back on the free shipping benefit, which will hurt revenue growth or continue to face accelerating losses. Either choice will hurt investors’ portrayal of the economics of Amazon’s business.

Poorly Positioned in the Shift from Physical Media to Digital Media

One of the biggest trends in the past couple of decades is the shift from analogue to digital. In a similar vein, there is a huge secular shift today from physical media to digital media. People are moving from physical books, DVDs, videogame discs, and CDs to e-books, online video, digital videogame services, and iTunes.

Already the growth deceleration in physical media is showing up in the numbers. Amazon’s North America Media sales growth slowed to 8% y/y in Q4-2011. Amazon blamed poor sales of videogames as a factor. This isn’t going to get any better in Q1-2012 as NPD videogame sales were down 38% y/y in January (Link) and down 23% y/y in February (Link).

The problem for Amazon going forward is a significant portion of their current revenue is still from physical media, so they need to dominate the secular shift to digital. Unfortunately for Amazon, the elephant is the room is Apple.

In the CDs to digital music shift, the game is already over with the power of Apple’s iTunes/iPod ecosystem. Amazon has no chance to compete. In the DVDs to digital movies shift, Apple already has 75% market share of all movies bought online (according to a Hollywood source Link) and this is even before Apple has launched a true Apple branded TV which is slated to come out within a year.

Amazon doesn’t really have a digital gaming download strategy (other than a small PC games download business) and will be locked out in the future when/if Microsoft or Sony goes digital only with the next generation consoles. Also as more interactive game spending goes purely digital to MMOs, Facebook, and tablets, Amazon market share of videogame business will continue to decline.

In terms of e-books, Amazon has dominated this business due to the success of Kindle e-readers in the past few years. Unfortunately for Amazon, this too is now significantly at risk as the world is moving away from dedicated e-readers and to full featured tablets. Taiwan based E Ink Holding which provides black and white e-ink displays and counts Amazon as a large customer reported December 2011 revenue down 57% y/y (Link).

The Kindle Fire Conundrum

So if the world is moving to tablets to consume digital media, all of Amazon’s marbles are now put on the success of the Kindle Fire tablet. I was actually a day one buyer of the Kindle Fire. I was excited at the price point and entranced by the ultra-fast Silk web browsing marketing line-item. Within a couple of hours of using it, it was back in the box and on its way back to Amazon for a refund.

The Kindle Fire tablet is shoddily constructed, has no volume buttons, got uncomfortably warm after some use, and worst of all unenjoyable to use. I tried the web browser and it was very slow compared to iPad, Touchpad, and even the Nook Tablet I tried in the store. Netflix didn’t work well (Engadget review saying Kindle Fire Netflix app is choppy and worse than the Nook Tablet version Link). The operating system is a glorified app loader carousel and has a tiny sub-set of the functionality of Apple’s iOS and Android 4.0 “Ice Cream” sandwich.

I was not alone in my experience. 10 people I knew who bought the Amazon Fire tablet returned it within a week. 100% of people I know who have previously used an iPad in the past and bought a Kindle Fire wound up returning the Kindle Fire. That is an utterly damning data-point.

I believe that Kindle Fire initially did sell well in the first few weeks after release, but after word-of-mouth got around sales decelerated and imploded into Q1-2012. Many of the data-points that I triangulated from other companies and sources bear this out.

1. Apple’s CEO said on their earnings call and at conferences there was zero impact on the trajectory of their iPad sales after Kindle Fire was launched. He said “our customers won’t be satisfied with “limited function” tablet” and he has heard customers of a competitor [Kindle Fire] say “I got a good deal… but I hate it”

2. Barnes and Noble management on their conference call heard their biggest competitor [obviously Kindle Fire] “had returns rate 15-25%”

3. Sandisk management on their conference call pointed out weakness in the 8GB flash size product [the size of Kindle Fire’s flash memory].

4. Digitimes on 2/20/12 reported Kindle Fire shipments plummeted to 1.5 million units in Q1-2012. This is even worse 3 million units forecasted just 1 month before on 1/20/12 Link

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5. Walmart offered a $50 free gift card on Kindle Fire purchases 2/5-2/14 (Link) further supporting the inventory overhang theory. Staples did the same later in February with a $25 gift card promotion (Link). Moreover every time I visit my local Target there are piles and piles of Kindle Fire and Kindle e-reader inventory.

6. Texas Instruments on their mid-quarter guidance cut conference call on 3/8/12 (Link):

”whenever there’s a new product introduction by a customer, there’s also an associated one-time surge of revenue as those customers fill their channels with product. So although we had anticipated lower sequential revenue associated with that [non-recurrence] of the fourth quarter channel fill, demand for OMAP is lower than what we had originally expected as our customers are now rationalizing both their expectations for ongoing demand as well as the associated inventory.”

 

The most ballyhooed Texas Instrument OMAP app processor new product design win in Q4-2011 was the Kindle Fire. And now Texas Instruments is saying the channel got stuffed and needs to get “rationalized.”

And it’s going to get worse. Apple is reportedly going to launch a 7-8 inch tablet form factor iPad at a lower price point later this year. Google/ASUS is reportedly going to launch a 7” tablet in the coming months for $199-249 to compete directly with the Amazon Fire tablet. This new tablet will have a full-featured Android 4.0 “Ice Cream Sandwich” OS and an Nvidia Tegra 3 processor which will provide a much better user experience to consumers. I’ve been using Android 4.0 on my HP Touchpad and it’s fantastic, snappy, and pretty, all things I can’t say about the Fire.

In fact Amazon is stuck between in a rock and hard place as they built the Fire Tablet on top of Google’s Android OS. Building your device on someone else’s OS puts you at risk of being cut out in the future revisions and upgrades. A very precarious situation amplified by the fact Google is probably not happy Amazon cut out Google’s Android Market (now called Play) on their device.

If Amazon’s Fire tablet doesn’t catch on, tablet digital media sales will be dominated by Apple’s AppStore and Google’s Android Market/Play store. People like to have one device that has all their music, photos, videos, games, apps, and movies. Apple and Google hold the cards and will get the 30% sales commission tablet store spoils while Amazon withers in the dust.

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To add insult to injury the success of Apple’s iPad and iPhone products are taking large consumer electronics dollar market-share away from Amazon. iPad and iPhone sales have grown exponentially over the last few quarters while Amazon’s electronics and other revenue segment have suffered in comparison. Once again this is a trend that is not likely to reverse any time soon given the problems of the Kindle Fire and the high customer satisfaction and extreme stickiness of the Apple ecosystem (iCloud, iOS AppStore, iTunes, iPhoto, Apple TV, iPod, FaceTime etc.)

Amazon isn’t oblivious to the competitive issues at stake with the shift to digital media and the rise of tablets. Guess how many iPads and iPhones Amazon sells directly on their site (not third-party sellers)? Zero. That’s right, ZERO.

At the close of trading on Friday, March 9th Amazon stock price was $184.32 trading at a premium multiple of 143Xs 2012 earnings.

What multiple do you give a business that is goosing revenue with uneconomic free shipping subsidization?

What multiple do you give a business that is directly in the cross-hairs of Apple in the shift to digital media after what Apple did to Nokia, Research in Motion, HP, and Palm?

What multiple do you give a business that put its future on a shoddily built tablet that is failing in the market place?

My answer is: a much lower multiple.

Written by @firstadopter. Follow me on Twitter (Link)

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1. Many Amazon bulls keep saying “Don’t worry, Jeff Bezos plays long-term. He will figure it out.” This reminds me of what people used to say about Reed Hastings at Netflix last year as NFLX stock went from $304 to $62. No matter how great a CEO Hastings was before, it didn’t help the fact his content costs went from a sweet-heart $30 million a year deal with Starz where Netflix got quality Disney and Sony movies for a pittance to paying $1 billion for Gossip Girl. Similar perilous secular industry trends are facing Amazon, even great CEOs can stumble.

2. I didn’t even cover the long-term issue of state sales taxes. Currently analysts’ estimate Amazon has a 10% pricing advantage after no state sales tax and shipping vs. brick and mortar stores. This advantage goes to low single digits % over the next 1-3 years as states and/or Congress legislate and come to agreement with Amazon to collect state taxes. I’m of the belief this will help level the playing field and hurt Amazon’s revenue growth as there is some value to customers of having a store-front to try new products out, give service, and returns. The best example of this is Apple retail stores of course.

3. I also did not write about Amazon web services. Compared to the arguments laid out above for Amazon’s core businesses, web services is still a small single digit percentage of revenue (Link) and is suffering some issues of its own: 1) Zynga decides to compete after being Amazon’s largest web services customer (Link) 2) Sony switches some business away from Amazon to RackSpace after security breach (Link) 3) More price competition from Google Link 4) HP to compete in the coming months (Link)


Categories: Articles
  • Capcube

    Like you, I have been very vocal about the challenges facing AMZN and the super ridiculous premium valuation that it trades off of.

    I believe a major valuation adjustment is inevitable, probably coming soon.

    Nice work …

    • Andyco38

      Why coming soon? What is different? Suddenly everyone is going to wake up and realize what you have known all along?

      • Capcube

        Perhaps.

        In case you have not noticed, $AMZN is 25% off last year’s highs, so I would say some have woken up already. But there is a lot more to go. IMO, based on fundamental realities.

  • Imagine27

    I wouldn’t advise the digital toilet paper, it doesn’t work so good. Amazon is thinking about stuff you’ve left out of this analysis. The question is, did you not see that, or it just didn’t git your contentious thesis?

    • Imagine27

       that s.b. …”fit”…. not git

  • Anonymous

    Digital goods! The very stuff at which Amazon is supposed to be uber-dominant may turn out to be its Achilles heel and undermine its absolute dominance in the physical books segment notwithstanding it efforts to build a moat with its proprietary kindle format.  
    With digitization, publishers will to be able to “disintermediate” middlemen like Apple and Amazon with ease. Why bother with agency model, wholesale model etc. when all that is needed is a platform to host the content, manage DRM, process payment and advertise/promote etc.. the kind of stuff which
    fits Google’s biz model of an advertising portal and also dovetails with Facebook’s monetization efforts. The publishers and authors could also establish their own collaborative eBook portal and simply pay commissions to
    sales coming from affiliate’s referral links. To that end, the publishing
    industry should get behind an open format like ePub and encourage the
    availability of generic, commodity e-reader devices.

    EBook distribution might evolve into a “Marketplace” model where publishers and authors sell their eBooks on an eCommerce portals like Amazon, and then Amazon’s fair valuation metric would be no different than say, eBay. However, Amazon’s efforts to also be a publisher as well might give publishers pause and a preferred marketplace platform might be a neutral, non-competing one like Google.

  • http://twitter.com/jgwulterkens JGERRITWULTERKENS

    firstadopter are you playing this thesis through a trade?  Puts?  Leaps?  Interested to know because how you structure the trade implies what kind of time frame you intuitively expect.

  • http://twitter.com/firstadopter firstadopter

    I am short the stock directly. No options.

  • Dayabaran

    Fastastic article. Couldn’t agree more. I have shorted AMZN before. It is a worthless piece of crap. It’s PE is ridiculous. I believe it’s valuation is $40 billion. Something like eBay and they dont carry inventory. Also i think bankers keeps its PE high because it needs to buy new distribution using its high PE stock, less dilution. They make fees from its bring Amazon the deals. I dont know who the dumb investors buy this crap are. They are doing to wake up one morning and realize they have been buying a Webvan. Don’t even get me started w Kindle Fire.

  • Dr. Duru

    Great analysis. This well explains why Amazon’s stock has been relatively weak lately. Even MORE importantly, I am *dying* to know how you installed Android on your Touchpad?!? I have been searching the web for instructions!

  • Anonymous

    Wow, the shipping loss percentage trend is incredibly eye opening. The idea with volume is that costs go down as a percentage. For them to actually rise with volume! Holy smokes.

    And as for kindle sales. I wonder what sort of nice sounding stat bezos will serve up to obfuscate that meltdown… “more kindles sold last quarter than in all quarters combined before we started selling kindles.”

  • http://twitter.com/intelligentspec IntelligentSpec

    Great analysis, very appreciated. i’ve been bullish on Amazon for the past few months and some of these numbers do make me question that. I still do believe in the overall “market share” focus there is no doubt that the Prime strategy could turn out to be too expensive in the end… thanks, I will continue to read through this info

  • Anonymous

    Since you claim that Amazon is in the cross-hair of Apple’s digital business, please state what percentage of Apple’s revenue comes from digital business.  The iBook store has not taken traction and from a profit standpoint Apple doesn’t even disclose it.  Truth be told iBook is an after thought for Apple.  But let me take the inverse of your arguments an put Apple on the seat.  Disclosure for all you cursers and rabid fans, the following data comes from Apple’s 10K 2011.  You can find it, as I did on Apple.com or Sec.gov.

    Investing is a forward-looking endevour, that is not open to debate it lies at the core of the time value of money as taught in Finance.  So that to value any company you have to attempt to project both its profit potential and revenue potentials into some future time known as your investment horizon.  That last part is critical to portfolio managament.  So now:

    First I want to look at Apple’s gross margin in % and it’s growth rate, (remember where this data comes from, straight from the 10K): 2009 – 40.1; 2010 – 39.4; 2011 – 40.5.  Over the last three FY’s the Gross margin, (remember that this is just sales minus cost of good sold and doesn’t include other expenses all of you who have studied Financial Analysis know this). But this is historical data what about the future? The Company stated in its 10K 2011 that it expects future gross margins to decrease.  Since gross margins are by itself a quasi indicator of profit potentials be have to see that 1. profits have not been growing at a rapid rate.  From 2009 to 2010 GM actualy declined and from 2010 to 2011 they only increased by 1.1%. And 2. By management’s own admission future GM will decline.

    Let’s now look deeper inside the company at its sales mix: As investors, non-emotional ones, we need to know where growth is coming from and where it will come from given the company’s current trajectory.

    Page 31 of the 10K breaks grow (decline) rate down like this, in %: Desktop 2009-2010 43%; 2010-2011 4%
    Portables (MacBook products): 2009-2010 18%; 2010-2011 36%
    Total Mac sales: 2009-2010 26%; 2010-2011 25%.  So this is not a growth factor.  Certainly not good news for investor but it would explain why the company chose to alter its name.

    Next: Ipods.  This product segment had been a profit driver for quite sometime. 2009-2010 2%; 2010-2011 (10), (remember that in accounting this means a decline of 10% or negative 10%.  This indicates that the segment has matured.  We can extrapolate that the company will not spend R&D money on this segment.  It is being cannabalised by the iPhone.  It is nolonger a revenue or profit driver but a drag on both. if we look further down at iPod unit sales we get this 2009-2010 (7); 2010-2011 (15).

    Next: other Music related products and services, (this includes iTune, Apps and iBook): 2009-2010 23%; 2010-2011 28%.  This is not the explosive growth rate in digital content that would indicate death or even great threat to a competitor.  As a matter of fact we have to conclude that most of the growth is coming from Apps which HAVE seen explosive growth.  With that in mind then iTune and iBook make a very small % of this growth.  App growth is driven by the newness of the iPad

    Nex:iPhone: 2009-2010 93%; 2010-2011 87%.  Ouch!! There is a decline, but let’s look at unit sales to see if maybe it is a discounting of price issue:
    Unit iPhone sold: 2009-2010 93%; 2010-2011 81%. Above I stated that perhaps the decline in iPod sales was due to cannibalization by iPhone, and it still could be but the decline in iPhone sales is another negative for the company.
    Next: iPad: 2009-2010 NM, (not meaningful); 2010-2011 311%.  It would seem impressive, but it would only seem.  Fact is this is a new product so the percentage growth is high.  As for Unit sales in 2010 in absolute #’s 7,458; 2011 32,398.  As investors we must keep in mind that this is a crowded field and competitors learn and adjust quickly.  Apple has shown that this is a viable segment of the computing industry.  As a matter of fact for the 4th Q of 2011 its shate of the sector declined to 57%.

    What to make of this and other data supplied in the 10K, including management discussion? Well, there is one last point which most of the Financial Media has mostly ignored and analysts will not delve in, at least not at length: Proview.  Proview represents a clear and credible potential threat to iPad revenue over the course of the next 3 years.  If it suceeds in having sales and production, (through a ban on export) of the iPad from China it will have an affect on both Apple’s Chinese revenue and it will halt production until Apple relocates outside of China.  There are plenty of countries in the region that would welcome its business but would the cost of good sold rise in the form of an increase in labor cost.  Pricing the new iPad the same as the iPad 2 means that Apple does not want to pass cost along to consumers and potentially losing marketshare to competitors.  Thus gross margins would further contract.
    I’m not telling to buy or sell or short the stock but I am asking you to be a more informed and intelligent investor.  I am reminded of a statement, always overlooked, by Gordon Gecko of “Wall Street”, “Never get emotional about stocks.”

    • Anonymous

      The article was about Amazon. Not Apple except inasmuch as Apple is a very potent competitor in a market that Amazon desperately needs traction: Tablets and online delivered goods.

      BTW: I think it’s telling that Apple has about the largest digital media business: biggest music store, biggest app store, biggest video store, probably the biggest audiobook store, and yet, you are right it’s not a big profit generating business. But nevertheless, this is the business that is supposed to be Amazon’s future for its historically most lucrative retail products (physical books/music/video/games).

      • Anonymous

        As I pointed out in my comment I was taking the inverse position of the writer’s comment.  He chose to base his article mostly on Amazon.com vs Apple inc.  Thus he was, I felt, giving a very distorted buy.  When you chose to invest in a company, here he is saying buy Apple not Amazon or even short Amazon, it is not that simple.  In chosing to invest in Apple you have to look at the merits of investing in Apple, within your investment horizon, on its own merits.

        I could have and can, given my time, give you another inverse to his article and show why to a certain type of investor Amazon.com is a good investment on its own merits.  I have analysed both companies for more than 12 years.  I was an investor in Apple when Skully was the CEO, when Microsoft offered to buy it.

        The companies are not direct competitors as this author and the financial media would have traders and investors believe.  A cursory industry analisys and product analysis of both companies clearly shows this.  There are some product sectors or industry subsectors, if you will, where they compete and even here the competition is not as direct as one might think.

        As for “the biggest” when it comes to audio books it is Audible.com, which Amazon bought.  Even Apple has to go through them based on a deal they made in 2003.  As you can see things are not always as simple as they might seem.  Amazon gets paid, through Audible, for almost all audio books sold in the world.  As for video this honour goes to Hulu and Netflix.  Music, yes iTune so too for App. 

        As I pointed out though, investing is a forward looking endeavor.  Where do you see Apple given your investment horizon in respect to these “biggest” industries?  Where do you see Amazon or even Netflix.  Modern Portfolio Theory, with all of its failings, states that you should not have a one stock portfolio, risk distribution.  You could actually play both Amazon.com and Apple, inspite of the media.

        I see Amazon’s future in digital as very good, but in the near term it will cost them dearly.  Short-term investors have no stomach for this, but consider this point: Amazon began as a mere bookseller, then its main music competitors were CDNow and N2K, (I have been in Finance since 1987 lots of data), both companies merged to better take on Amazon in the summer of 1998.  CDNow was bought by Bertelsmann who then hired Amazon to run CDNow until 2006.  At the time Amazon ivested heavily in music and DVD sales.  Just like now, investors and traders either sold or heavily shorted the stock into the single digits.  I felt the pain for years to come!!  All of the investing paid off.  From it came not only its huge revenues in those segments but also the Kindle, Cloud biz, server farming, etc. Many claimed that the company was confused, it didn’t know whether it wanted to be an eTailer or an IT company. Those people where not thinking about ebooks, tablets, cloud, etc.

        Amazon is back to spending and it has to, all companies have to otherwise they risk becoming obsolete or irrelevant, worse yet bankrupt. Netscape created the browser but never invested to grow it or beyond it, it went out of biz, though M. Andressen likes to go around investing in start ups.  Where is Digital Equipment Corp, Compaq Computers? Palm so its innovation, its creation taken away from it by cell phone companies.  Motorolla once the leader in cell phone now lies somewhere in a corner of the industry.  If companies don’t invest in growth and instead work on massaging the stock price they too will disappear.  Bezos work on Wall Street and he knows the dangers of just trying to please Wall Street quarterly appetite.

        • http://twitter.com/firstadopter firstadopter

          Look at the chart of iPad and iPhone sales going up exponentially in my article above vs. Amazon’s electronics/other revenue segment. I don’t understand your other points on Apple. Have you seen their financial results in the past few quarters?

    • Anonymous

      Wow, you put a lot of effort into that. Some brief comments:
      • “The Company stated in its 10K 2011 that it expects future gross margins to decrease” – uhm, every quarter, Apple states on their conference call that they expect future gross magins to decrease.

      • “Portables (MacBook products): 2009-2010 18%; 2010-2011 36%
      Total Mac sales: 2009-2010 26%; 2010-2011 25%.  So this is not a growth factor.  ” – uhm, what? The rate of growth may be somewhat static, but it is still growing, at a healthy rate compared to the industry.

      • “Other Music related products and services, (this includes iTune, Apps, 3rd party iPod accessories and iBook): 2009-2010 23%; 2010-2011 28%.  This is not the explosive growth rate in digital content that would indicate death or even great threat to a competitor.” – LOL, 28% growth is not “even a great threat”?

      • “Phone: 2009-2010 93%; 2010-2011 87%.  Ouch!!” – Of all the silly things you’ve written, this is the silliest. Do you realize how many companies have greater than 80% growth in such a large line of business?

      • “iPad: As investors we must keep in mind that this is a crowded field and competitors learn and adjust quickly.” LOL, it’s been 2 years, even a fast follower like Samsung only gets a fraction of the market. The iPad has 78X more web traffic than all the SGalTab variants.

      • “This will require coming out with a new iPad every year and eventually increase spending on R&D thus decreasing both gross margins and profit margins” – Please, Apple has been coming out with new iPods and new iPhones every year since 2001. You’d think they know how to leverage their experience in making iOS devices and leverage their R&D, and increase gross margins and profit margins.

      • “Proview represents a clear and credible potential threat to iPad revenue over the course of the next 3 years” – UTTER NONSENSE. Noone,besides you, believes any of the nonsense you wrote. They’ll settle before there’s any sales injunction, etc. 

  • Anonymous

    I would like to add a minor but important correction to unit sales where I have reported them they are to be read in thousands thus iPad sales in 2010 were, rounded of by the company, 7, 458,000.

    Thank you

  • Hugh

    Great analysis, just one thing that you didn’t mention that won’t help amazon in the future is the impending state sales tax that is coming down the pike. Its inevitably going to happen. How can it be fair when one of the largest retailers in a state sell there products without collecting sales tax when all the local retailers have to pay it. 
    How much toilet paper or paper towels are people going to order from amazon when they have to pay shipping and sales tax. 

    • Anonymous

      It is not Amazon that would be paying the sales tax, but rather it would be collecting it from you and then the NET PRICE with TAX might take the shine off their low-price meme.

  • Anonymous

    Besides Amazon Prime, one other albatross of shipping costs is their “Subscribe & Save” program for groceries, beauty products, household supplies, plus 14 other categories and you get 5% to 15%  discount & FREE SHIPPING.

    You can schedule your delivery out to 6-month period and can cancel anytime.

    I had ordered a couple of items scheduled out to 6 months and each costing around 5 bucks and got them delivered seperately in 2 days. I suppose they figure I will get hooked which I just might but they can’t possibly make money on me.