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presents
GORILLA GAMES
Q3 2018 Update on
What Amazon Means
for the Rest of Us
1
INTRODUCTION
Let’s let Jeff Bezos set the stage once again:
“One thing I love about customers is that they are divinely discontent. Their expectations
are never static – they go up. It’s human nature. We didn’t ascend from our hunter-gatherer
days by being satisfied. People have a voracious appetite for a better way, and yesterday’s
‘wow’ quickly becomes today’s ‘ordinary’. I see that cycle of improvement happening at a
faster rate than ever before. It may be because customers have such easy access to more
information than ever before – in only a few seconds and with a couple taps on their
phones, customers can read reviews, compare prices from multiple retailers, see whether
something’s in stock, find out how fast it will ship or be available for pick-up, and more.
These examples are from retail, but I sense that the same customer empowerment
phenomenon is happening broadly across everything we do at Amazon and most other
industries as well. You cannot rest on your laurels in this world. Customers won’t have it.”
- Amazon 2017 Shareholder Letter
Amazon is in the news constantly, but rarely is the commentary focused on helping business
owners stay up-to-speed on how they have been, are, or will be affected. That’s our goal for this
piece—to keep you, the business owner, informed.
I bet we could all exchange stories on rising customer expectations vs. profitability. Amazon’s role
in the daily struggle for other American operators is consistently resetting customer expectations.
From speed and delivery fees to inventory access to consumption availability, they have and
continue to set the bar higher for both themselves and for other companies.
Let’s dig in on where Amazon is acting like King Kong changing the landscape of a major metro,
and where they, along with the rest of us, are struggling to figure out how to satisfy customers’
divine discontentment while operating sustainable business lines.
SELLING VIA AMAZON
With some exceptions, many branded manufacturers are reviewing quarterly results with increasing
dismay at what the Amazon distribution network yields. Amazon is marketing its latest efforts to
increase product visibility, brand storytelling, and customer relationship-building, but companies are
spending more time talking about third-party seller pricing wars, fraudulent product listings,
Amazon’s private label lines, margins, tax changes, analytics-oriented fees, and back door
strategies for manipulating the e-commerce giant’s algorithms.
• “Counterfeiters are listing their versions of hot-selling items on the same page and at lower
prices. Amazon’s pricing algorithms see the lower price and then assigns the default “add to
cart” option to the counterfeiter, elbowing brands out of selling their own goods.” - WSJ
• “In exchange for payments ranging from about $80 to more than $2,000, brokers for Amazon
employees in Shenzhen are offering internal sales metrics and reviewers’ email addresses, as
well as a service to delete negative reviews and restore banned Amazon accounts.” - WSJ
2• “[There is] a massive opportunity for Amazon to more than double revenue from its in-house
brands to $25 billion in the next four years… Some large brands are spending six figures
each month advertising their products on Amazon’s platform even as Amazon’s private-label
products are crowding them out.” - NYT
• “Amazon launched a new section of its site called Amazon Storefronts… trying to be
everywhere, but not as a faceless $1 trillion company. Instead, as 20,000 businesses
featuring literal faces that can connect to you on a folksy, personal level.” - Vox
• “‘There are other discount retailers that have developed their own lower-priced versions of
J.Crew. Amazon wanted to work directly with the people who created the concept.’ J.Crew
is selling merchandise directly to Amazon, making Amazon responsible for listings as well as
the warehousing and shipping of products.” - WSJ
• “With Amazon now actively reducing the total number of Vendor Managers, even a brand
selling millions of dollars of product each year to Amazon may find itself without a Vendor
Manager. Instead, that brand must use the Vendor Success Program (VSP), featuring
automated reordering and computer-based contract negotiation.” - News Times
• “Amazon collects state sales tax where applicable on its own merchandise, but it doesn't
generally assess it on items shoppers purchase from third parties via Amazon Marketplace.” -
The Street
• “We didn’t embrace Amazon or other channels that weren’t hardcore outdoor, and we
suffered because of it. A small, fledgling company really needs to have the attitude that sales
is king.” - Outside
Outside of product, fulfillment, and pricing concerns, the options for marketing a product or brand
to particular consumers are significantly expanding. And with that, the options to spend more
money on Amazon are as well. The general thesis of spending marketing dollars on near-perfectly
segmented audiences already in “buy mode” makes sense, but considerations around conversion
data access, retargeting limitations, and product margins keep it from being an easy decision.
• “Not all my clients like working with Amazon because it has been going directly to them,
absorbing all their information without sharing anything back. People talk about the role of an
agency in a world where Amazon becomes the dominant channel, and my answer to clients
is, ‘You should treat us like having a lawyer in the room.’” - Digiday
• “Thanks to the vast amount of data Amazon collects from its customers, it can target ads not
only to basic demographics—say, women over the age of 35—but to a more precise
segment of customers who are likely to be shopping for cellphones or barbecue grills.” - NYT
• “Amazon bills Video in Search ads as “a premium ad experience” and says that a budget of
$35,000 or more is required for advertisers interested in using them.” - Econsultancy
• “About 70 percent of the word searches done on Amazon’s search browser are for generic
goods. That means consumers are typing in “men’s underwear” or “running shoes” rather
than asking, specifically, for Hanes or Nike.” - NYT
• “1 in 6 search query results on Amazon is sponsored.” - 2018 Code Commerce
• “[Amazon] is doing more outreach with Madison Avenue, striking deals with holding
companies and agencies; it opened an ad platform last year, an application programming
interface that lets marketing developers build easier ways to buy ads; and it is opening its
Amazon Ad Platform to more brands.” - AdAge
• “The "other" category grew 51% year on year to $945 million. Amazon's advertising business
is almost a unicorn by itself.” - Business Insider
3• “In 2018, we are estimating advertising revenue of approximately $96B at Google (ex-
YouTube), $54B of ad revenue at Facebook, approximately $20B of revenue at YouTube, $7-
$8B at Amazon, $2.5B of ad revenue at Twitter and $1.1B at Snapchat.” - MediaPost
SELLING OFFLINE
U.S. e-commerce is expected to top 10% of all retail sales by the end of 2018. But American
shoppers still spend $9 out of every $10 offline. Translation: Brick and mortar still matters.
It would seem Amazon appreciates how hard offline sales can be. The rollout of Amazon Go stores
has been welcomed by consumers, but extremely slow by the corporation’s normal standards,
although that may be changing soon. And the Whole Foods ownership transition hasn’t been
exactly smooth, with customers, employees, and suppliers growing frustrated over various
changes in the quality and structure of respective relationships with the brand.
• “Amazon Go drew giant lines when it opened in Seattle earlier this year. The store has a 4.5-
star rating on Yelp, with customers raving about the concept.” - GeekWire
• “I don’t know a ton of people who say, ‘I love the part where I wait in line and they ring up all
my stuff.” - Chicago Tribune
• “Many suppliers are angry that Whole Foods has added fees of at least 3% to restock
shelves and run promotions for vendors who sell about $300,000 in products annually.” -
WSJ
• “For many suppliers, all of these changes are putting the retailer’s success far ahead of their
own. It’s jarring coming from a grocer that used to be renowned for its nurturing relationships
with product makers, and a lot of small vendors—the ones that have long helped Whole
Foods stand out from the crowd—now say they’re completely shut out of stores.” - Food
Dive
• “Back in 2016, when everyone was hysterical about Whole Foods going down the tubes, it
had an operating income of 2.9 percent, down substantially from the 5.5 and 5.6 percent it
posted the two preceding years, but in the typical range for the industry… You buy groceries
from Amazon? You’ll be buying from a tech business that cares as much about the data it
collects on you as it does on the food it sells you, and makes its money somewhere else.” -
New Food Economy
• “Amazon’s heavily-promoted price cuts have attracted attention, but they didn’t necessarily
bring a big boost to Whole Foods. Whole Foods sales since the acquisition have largely
remained stable… The premium grocery store’s growth has been stagnant since 2015. New
shoppers only account for 3% of its customers base.” - Yahoo Finance
• "They were able to reduce costs and drive a higher demand. However, this created a bigger
problem of shortages, which hurts the current positioning of Whole Foods on the service
dimension." - The Street
• “Now that Amazon has helped kill off Toys R Us, it wants to borrow the retailer’s iconic print
holiday toy catalog. The online behemoth is interested in creating its own print catalog to mail
out and also be handed out at Whole Foods… It’s just especially amusing that Amazon,
having helped kill off these physical retailers, is trying to learn from them to make even more
money.” - The Verge
4Unless your brand distributes through Whole Foods directly, perhaps the more interesting
discussion is what retail concepts—apart from an Amazon-integrated Whole Foods or checkout-
less Amazon Go (well stocked with Amazon-owned brands)—are experiencing success. Whether
it’s an inventory-free concept environment, a neighborhood depot of everyday basics, or a virtual
store you still walk through, there are many models testing or holding on to proven brick-and-
mortar approaches.
• “If the marginal cost of acquiring customers is greater than the marginal value of the lifetime
value of those newly acquired customers the business model is unsustainable. This may well
be the achilles heel of brands like Blue Apron and Wayfair. As many once online only brands
are learning, it's often cheaper to acquire a customer in a physical location than to pay the
marketing tollbooth operators (Google, Facebook and, increasingly, Amazon) to target and
convert the best prospects.” - Forbes
• “Americans are spending more on everything from jeans to handbags to home furnishings as
rising wages and lower unemployment boost disposable income. The spending spree is
helping retailers recover after several difficult years. Last week, Walmart Inc. said its quarterly
sales rose at the fastest pace in more than a decade.” - WSJ
• “Our customers know real value vs. perceived value… We sell consumable basics… 75% of
homes in the continental US are within 5 miles of a Dollar General.” - a16z Podcast
• “Basics are Amazon’s forte. What it’s not good at? Selling clothes that customers find
fashionable.” - Quartz
• “Best Buy is like an arms dealer. They’re indifferent to what brand you buy as long as you buy
it from them.” - Bloomberg
• “... Embrace digital and bridge clicks and bricks. Nordstrom’s new “Scan & Shop” feature
within its Catalogs app links the print catalog to digital and m-commerce. On Instagram,
where Nordstrom enjoys a robust following of close to 900,000, the retailer uses Like2Buy to
make its feed shoppable. Nordstrom has also extended its social media investments to
emerging platforms such as Wanelo. Meanwhile, the company recently announced plans to
add a fulfillment center in Pennsylvania, since nearly half its customers are within a two-day
ground delivery radius.” - Gartner L2
• “Grocery stores don’t want to partner with Amazon… They need a counterweight to Amazon.
Grocery stores need Instacart… If Amazon wins grocery, the retailers are terrified.” -
@Ryan_Caldbeck
• “Instacart’s largest-growing markets are not markets where Whole Foods has a dominant
share… Cities like Chattanooga... ” - @SarahHalzack
• “Recent moves by Amazon are an indication not of domination but convergence towards the
same drivers of retail success in prior generation. ‘Everyone eventually becomes their
parents.’” - @SteveSI
• “I’m afraid of this obsession around the word “experience” for retail. It’s important but the
most important is the products. People still want special items at unique locations, with great
service… Today, product has to be special. The product and the [sales] process. Otherwise I
would order online and not wait at the register, but instead wait less than 24 hours for
delivery.” - Business of Fashion
• “Bonobos, Casper, Madison Reed, and a slew of others that have realized the power of the
in-person experience and inventory-less stores have also worked permanent or roving retail
showrooms into their core business strategies. It demonstrates a larger trend among the
digital-first brands responsible for transforming consumers’ shopping habits and turning
5some of the country’s formerly vacant shopping centers, and what The New York Times calls
“zombie malls,” into resurrected retail spaces.” - True Ventures
• “With… Jet’s new push into New York, Walmart is trying to reach beyond its core base of
big-box stores in rural and suburban America and compete for higher-income urbanites.” -
NYT
• “Walmart has applied for patents for intellectual property that creates a “virtual showroom”…
The technology would give home shoppers with VR headsets and gloves the ability to
browse through a (presumably uncrowded and meticulously clean) virtual store, pick up
merchandise, and instantly add it to a queue for home delivery.” - Quartz
• “It's in second- and third-tier communities where we'll see the biggest changes, much like we
did in the airline industry. Rather than these communities having a Wal-Mart and a Target and
a Macy's and a Sears and a K-Mart, it may just be one or two of the five.” - Bloomberg
• “... Jeff Bezos, had understood this when he pioneered the idea of one-click shopping. But
many retailers have built their businesses around the opposite idea, like expansive stores that
take hours to wade through and commissions that encourage employees to push certain
products.” - NYT
• “The 125,000-square-foot outdoor development, which replaced several run-down blocks of
1950s-era storefronts, lacks the identifying characteristics of most malls: a vast parking lot,
department stores, a reliance on retail chains. A centerpiece of Caruso’s projects is a green
space for public gathering—the essential ingredient in his malls’ success, he says. People
come for pleasure, then make unplanned purchases that are called, in retail lingo,
conversions.” - WSJ
• “The cost of doing business as a retailer is all the costs you had in the past and then some.
The biggest challenge is to continue growing in a retail environment that is fundamentally
stable.” - WSJ
• “About that retail revival. It might be less powerful than investors think…” - WSJ
SELLING ONLINE OUTSIDE OF AMAZON
Amazon may be close to representing 50% of all domestic e-commerce sales, but they are far from
the only option. The trouble with other options seems to be that they are also gorillas, just smaller
and stuck in some stage of adolescence in which they can be fairly unpredictable. And then there
are the fledgling options. From a brand’s perspective, such options can generate short-term
revenue, but, not unlike Amazon distribution, any long-term revenue reliability is far from secured.
• “Amazon's e-commerce sales in the U.S. are expected to reach a staggering $258.2 billion
this year, up nearly 30 percent from a year ago… That means Amazon is expected to capture
nearly half of the U.S. e-commerce market by the end of 2018… EBay is expected to end the
year with about 6.6 percent of the U.S. e-commerce market, Apple with 3.9 percent and
Walmart with 3.7 percent. Next in line are Home Depot, Best Buy, QVC Group, Macy's,
Costco and Wayfair.” - CNBC
• “‘We launched, and then all hell broke loose a little bit within the outdoor industry. I didn’t
expect the reaction to be quite so vehement,’ Moosejaw Chief Executive Eoin Comerford
said in an interview. About a third of the premium outdoor brands have left Walmart.com.” -
WSJ
6• “If the furniture retail industry is facing an apocalypse, then Wayfair is the lead horse.” -
Forbes
• “The new system, introduced earlier this month, has led to a decline in sales at some
companies that sell their products on walmart.com… Some suppliers weren’t warned of the
change in advance… Under the new system, suppliers will have to stock their products at
more Walmart warehouses around the country to keep sales steady…” - WSJ
• “The liquidation [through Amazon] wasn’t really successful, and we don’t really have a good
answer [why]. Intuitively, we know the same product was for sale on our own website and it
sold out.” - Digiday
• “Keeping a good share of their product assortment exclusive to the retailer’s brand
ecommerce site is the best approach to motivate customers to visit their site on a regular
basis.” - Luxury Daily
• “Farfetch and peer Yoox Net-a-Porter have been able to thrive by occupying a niche that
Amazon has yet to conquer: luxury fashion… Unlike typical retailers, Farfetch does not own
the inventory it sells, but rather serves as a conduit for brands and boutiques.” - CNBC
• “Luxury brands such as Gucci and Yves Saint Laurent sell on Jet’s platform, but not
Amazon’s. Jet is leaning into this advantage.” - Glossy
• “Net-a-Porter last year sold its most expensive single piece — a nearly $150,000 Panthère
de Cartier watch—on WhatsApp.” - Business of Fashion
• “32% of respondents prefer to buy online versus in-store, yet 74% are more likely to make a
purchase if they can return/exchange in-store.” - Packaging World
• “Consumers perceive Amazon to be a good convenience shopping site that lacks a personal
connection. It scores well on ‘fast shipping,’ ‘easy transactions’ and ‘easy website,’ but lags
on ‘easy to reach a live person,’ ‘makes me feel valued’ and ‘rewards my loyalty.’ According
to the data, customers do not feel as emotionally valued by Amazon as they do by other
online players like Etsy, QVC and Wayfair.” - Pymnts.com
Direct e-commerce is becoming easier, even for companies with no mass market brand
recognition or technical coding abilities on staff. And it obviously provides the most direct control
over margins, inventory, product positioning, and analytical understanding of who ultimately buys.
The purchase process has become progressively streamlined for consumers, but there are still
challenges for brands in how to set up conversion marketing profitably and fulfill on the backend.
• “Even as Amazon has pushed the envelope on selection, service, convenience, and price,
coaxing us to buy more commodities online, we are increasingly discovering and buying
conspicuous consumption goods directly from indie brands, splitting our dollars across many
different sites.” - Namrata Patel on Medium
• “Shopify is the absolute game-changer. At least 75 percent of the digital brands I talk to
today are on Shopify and many of them are now saying we don’t need to invest that much in
tech.” - Recode
• “Smart Campaigns are designed for small and local businesses that don’t have dedicated
marketing staff and may not even have websites. Smart Campaigns will be the default
campaign type for new advertisers in Google Ads… Early results show Smart Campaigns are
three times more effective at reaching a business’s target audiences than AdWords Express
campaigns.” - Search Engine Land
7• “The 78-year-old entrepreneur is seeking out mom-and-pop shops—like the local butcher,
toy store or pharmacy—and trying to outfit them with e-commerce capabilities, including
next-day delivery.” - Bloomberg
SUPPLYING THE MARKETPLACE
If you’re exclusively a manufacturer, selling your offerings only through third parties, it may be
tempting to think you have no dog in the fight. Reality has proven that every movement matters.
You feel it in payment terms, margins, inventory demands, and competition for exclusive goods
distribution.
• “The Amazon and Alibaba effect have significantly compressed consumer order fulfillment
delivery time expectations. Now, more than ever, planning and execution processes must be
more tightly coupled. Yet even while our data shows a portion of respondents understand the
importance of prioritizing both short-term execution and strategic long-term planning, too
often we see manufacturing companies focused on one and not the other.” -
Manufacturing.net
• “Vendors who kept shipping goods to Toys “R” Us hoping for a reorganization will receive at
least 22 cents on the dollar for the $800 million they are owed.” - WSJ
• “Target has also been able to tap into new and growing markets with the launch of exclusive
brands like Wild Fable and Original Use, which specialize in trendy clothing for 20-and 30-
somethings, and Hearth & Hand with Magnolia.” - Washington Post
• “Fast fashion has taken more out of the retail ecosystem than Amazon has out of apparel…
The more times you turn your product, the more likely your revenues are going to grow or
outpace your competitive set.” - 2018 Code Commerce
MOVING MARKETS
Despite your chosen sales channel(s), when it comes to the sales calendar and supply chain,
Amazon influences your market. They are changing the seasonal sales events calendar, when
inventory is ordered, and how the overall economy functions.
• “There could… also be a halo effect around Prime Day, as other retailers take advantage of
shoppers' spending mindset. ‘Other retailers are increasingly jumping on the Amazon Prime
Day bandwagon with competing sales of their own.’” - AdAge
• “‘July is a clearance month straight up...’ Unfortunately for small brands, Prime Day is
becoming more of a pay-to-play event...” - Retail Dive
• “The local deals are part of a larger contract Amazon signed in January 2017 with U.S.
Communities, a purchasing cooperative that negotiates contracts with suppliers on behalf of
its members, which include a number of municipalities and government agencies. The five-
year contract, which can be renewed for up to 11 years, is valued at $500 million a year. The
U.S. Communities contract was last held by Independent Stationers, a group of independent
suppliers around the country.” - Washington Post
• “Evidence that the algorithms used by Amazon and other online retailers, with their constantly
adjusting prices, may mean greater fluctuations in overall inflation in the event of swings in
currency values or other shocks.” - NYT
8• “From 2008 to 2017, as online purchases accounted for an ever-growing share of total retail
sales, the average duration of prices of goods sold at large U.S. retailers like Walmart fell from
about 6.5 months to about 3.7 months.” - Bloomberg
• “[Companies] need to have their own recurring revenue bundle… For any of you who own the
Restoration member card, 95% of all transaction volume goes through the Restoration
Hardware membership card… One bundle in apparel. One bundle in grocery. The lead dog
will roll up a bunch of suppliers… Consumers want less choice. They just want to be more
confident in their choice.” - 2018 Code Commerce
• “Amazon scored higher than both regional and national banks on consumer loyalty, coming in
second behind the USAA.” - Fox Business
• “Amazon terrifies me as a company… I'm not even sure what business the company is in
anymore. It's a platform that can be used pretty much to disrupt any business.” - CNBC
DISTRIBUTION & LOGISTICS
Unless you sell a service or digital product, getting something from Point A to Point B is always a
challenge. Amazon has instilled the expectation that the “thing” should be ready and waiting, and,
wherever it is in the world (or sky - see below), should be in the customer’s hands in two days or
less. Thus, the ongoing distribution demand chaos. Amazon is desperately trying to come up with
ways to improve its ability to meet its own customer delivery promises. The larger logistics industry
is trying to understand if and how to compete and/or partner. Companies are struggling with what
inventory levels must be kept on hand, and which warehousing solutions are viable and profitable.
• “Alongside life, liberty and the pursuit of happiness, you can now add another inalienable
right: two-day shipping on practically everything.” - WSJ
• “It’s less about price and more about service. The cheapest price to get it there isn’t going to
play anymore.” - Commercial Carrier Journal
• “In a video by Amazon, a woman said she likes getting diapers delivered to her car because it
meant her toddlers could nap without being disturbed by the doorbell.” - The Verge
• “It seems that the biggest remaining issue in the last mile is the actual point of actual delivery.
Do you leave the package with the doorman? What if nobody is home? Do you take it back
to the delivery station?” - Jeffrey Towson
• “No longer needing to purchase its inventory from suppliers, Amazon is now renting out its
platform, and thus its fulfillment expertise, to small online retailers for a 10 per cent to 25 per
cent fee depending on package size, shipping distances, etc.” - Financial Times
• “The e-commerce giant is seeking to assist hundreds of new small businesses to employ
tens of thousands of delivery drivers across the U.S. by providing discounted vehicles, fuel,
insurance, uniforms and access to “sophisticated delivery technology,” the Seattle-based
company said in a statement Thursday. Startup costs can be as low as $10,000, Amazon
said, with an entrepreneur running 40 trucks making $300,000 a year.” - Bloomberg
• “Amazon uses fake packages to catch delivery drivers who are stealing… Shrinkage—the
industry's term for losses attributable to theft, error, or fraud—cost retailers nearly $47 billion
last year.” - Business Insider
• “Amazon has a problem that they are not keen on discussing externally: their warehouses are
full, which has historically presented a problem during the busy holiday season. Amazon has
tried to negate this by scaling storage costs during the busy season and by limiting
9replenishment of products that go unsold by third party merchants, in an effort to optimize
warehouse spacing.” - Logistics Management
• “Flex operates year-round, not just during the holiday season, which suggests there’s another
reason for it: It’s cheap. As the larger trucking industry has discovered over the past decade,
using independent contractors rather than unionized drivers saves money.” - The Atlantic
• “Under the old regime, a driver making 40 cents a mile might drive 750 miles in 15 hours,
averaging 50 miles an hour and making $300. His paperwork would claim 11 hours at 68
mph. Now, however, his time is electronically tracked and the 11-hour limit is strictly
enforced. At 50 mph, he makes only $220. To keep even, his pay would have to rise to 55
cents a mile.” - Bloomberg
• “Amazon received a patent for product-distribution warehouses that float in the sky and are
carried and held by blimps.” - Supply & Demand Chain Executive
• “Amazon will file a patent for a floating warehouse because they know that the media trolls
patents and then write about them… Why do they not advertise? Because they don’t need
to… Sees that the Wall Street Journal and Forbes picks up on their floating warehouses so
files another patent for defending against projectiles fired at their floating warehouses. This is
all true.” - 2018 Code Commerce
• “On-demand warehousing is a game changer for the supply chain. It makes better use of
underutilized warehouse assets for companies that need a home for inventory on a flexible
basis.” - Supply Chain Management Review
• “Today’s visualization, which uses comprehensive data from MWPVL International, examines
the estimated 124 million square feet of active space in the U.S., as well as the 40 million in
Amazon’s construction pipeline.” [See Visual.] - Visual Capitalist
TALENT COMPETITION
Ask an operator in almost any industry what their major pain points are and, with few exceptions,
talent recruitment and retention will be the first topic on the list. While competing with an employer
of 575,000 people, so large it can invest in independent healthcare solutions and fund career
training unrelated to its own direct bottom line, may seem daunting, it’s not impossible - even if
your city becomes the future Amazon HQ2.
• “A group of more than a dozen Amazon Twitter users in the last two weeks started
responding to critics of the company on the social media site, sharing upbeat tales of their
working conditions and pay at Amazon’s distribution network.” - Seattle Times
• “In the years since Amazon opened its doors in Lexington County, annual earnings for
warehouse workers in the area have fallen from $47,000 to $32,000, a decline of over 30%.”
- The Economist
• “Since the early 2000s, Amazon has quietly received more than $1.5 billion in government
subsidies, in exchange for bringing new jobs to cities and states across the country.” - Wired
• “Amazon now occupies 33 buildings in Seattle, a total soon to grow to 40. By comparison,
the federal government operates 55 buildings in the District of Columbia. Amazon estimates it
has generated $38 billion in economic activity in Seattle between 2010 and 2016… income
growth has not been robust enough to compensate for the city’s declining affordability.” -
Brookings Institute
• “Their impressions of Amazon’s hardline approach to the tax range from apprehension to
derision to schadenfreude. Some consider the clash a sign that Amazon will invest more
10heavily in its second home while others fear a future in which Amazon plays hardball with their
city.” - GeekWire
• “[In HQ2] the company anticipates to create as many as 50,000 jobs paying an average of
$100,000.” - The Economics Review
• “In 2016 the average employee turnover in retail was 65%... In 2016 the median hourly wage
of the country’s nearly 9 million retail workers was $10.37, below the poverty threshold for a
family of four… If we assume that payroll is 10% of sales — which is not atypical in retail —
and if retailers use half of their tax savings (about 1.15% of sales) to increase wages,
employees’ hourly wages would increase by 11.5%, putting them slightly above the poverty
threshold.” - Harvard Business Review
• “More than 48 million people have registered globally on websites allowing them to sell their
labor… every new worker who signs up into entering a global marketplace with endless
competition, low wages, and little stability.” - The Atlantic
• “In the three years between 2015 and 2017, at least 30 director or higher level executives
went straight from Microsoft to Amazon. Google, the next most popular poaching ground for
Amazon, lost just 5 executives to the e-commerce company during those three years.” -
CNBC
11ADOPTING THE GORILLA MINDSET
As a company, you don’t have to be Amazon to succeed. In fact, unless you have billions of dollars
and data centers of intelligence, it’s probably a delusional objective. But being a strong, profitable
market force doesn’t have to equate to being the gorilla. You can still dominate your niche if you
are willing to put in the work.
From where we sit, the most universal takeaway is this: the consumer’s dollar is always in play, and
attached to the highest possible expectations. Once upon a time, brands only had to worry about
things like shelf position, brand recognition, packaging, and their distribution channels. But the
consumer’s dollar was really only in play once in a store or on the phone with a need. We’re now
two decades beyond that state and, while at the time that may have seemed complicated, it is
idyllic in comparison to how hard each company needs to plan, position, and scrutinize each move
it makes in the modern marketplace.
“Formerly, being a customer was a role one assumed upon physically entering a store or
ordering something from a company. Amazon promises to create a newer type of
environment, a hybrid of the digital and the physical, that lets us permanently inhabit that
role: the world as Everything Store, which we’re always inside.”
- Real Life
12CONTACT INFORMATION
We enjoy engaging in discussions about this content. Ping us on Twitter or send us an email:
@adventur_es @BrentBeshore @EmilyLEldridge
Info@adventur.es
VISIT adventur.es/gorilla-games-amazon TO ACCESS
ATTRIBUTION LINKS EMBEDDED IN THE CONTENT.
13invests in North American
family-owned companies with
$2M to $14M in annual owner
earnings.
info@adventur.es
www.adventur.es
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