Rubes on the Half Shell (Or Amazon’s Insatiable Appetite)
Disney turned the story of “The Walrus and the Carpenter” into a cartoon, but it first appeared back in the 1870s in Lewis Carroll’s “Through the Looking-Glass.” Unfortunately, the cautionary tale of the hungry pair’s conniving ways is as relevant today as ever. You only need to read the latest story about Amazon to know that naive young “oysters” are still being enticed to jump on the plate.
Carey Smith | Founding Contrarian
“The Walrus and the Carpenter” is packed with typical Lewis Carroll nonsense, but the theme is one of treachery and greed: The walrus and carpenter lure a bed of young, unsuspecting oysters into taking a stroll down the beach — “to talk … of shoes and ships and sealing-wax, of cabbages and kings.” Unfortunately, the oysters realize too late that the seemingly jolly pair aren’t really after conversation at all. They’re hungry, and the naive young molluscs make good eating.
It’s the same sad tale with Amazon, which is forever cooking up new ways to entice young, unsuspecting founders into being the next meal. The latest: a supply-chain management software service. It’s a great way to make a quick buck after the supply-chain nightmares of the past two years, and everybody who’s anybody is doing it these days, including Microsoft, Oracle and lots of startups. Amazon’s not about to miss out.
Articles about how Amazon squeezes “partners” come out regularly, and the comment sections make great reading for anyone wanting further proof. At Unorthodox Ventures, we caution founders time and again about the dangers of selling on the platform: Amazon will kidnap your customers and harvest all your data. As soon as you’re successful, they’ll come out with their own, remarkably similar product at a lower price, and christen it “Amazon’s Choice.” And did we mention that they always charge an arm and two legs for that “help?” Some help.
And now, with their new supply-chain management service, not only does Amazon know everything about who you’re selling to, they also know who you’re buying from, the cost and every challenge you face along the way.
When you think about it, it’s the logical next step: They already have all your customer data. They’re shipping your product, they’re advertising it, and they’re selling it. Why shouldn’t they take the final step and conjure the product itself? That leaves you, the founder, the freedom to sip Mai Tais all day in Maui. Except that if you’re under contract with Amazon, you’re more likely to be collecting cans and bottles from the roadside to redeem for the deposit. Good thing Hawaii has a bottle bill!
Everyone feels sorry for the Amazon workers who are run ragged every day, meeting their targets in warehouses. At least they get paid at the end of the week. Meanwhile, founders who are lured into selling their products on Amazon are the ultimate laborers, and they can’t even be sure of a paycheck — they have to figure that part out on their own.
The Wall Street Journal’s article about Amazon’s latest venture includes a photo caption under a large company logo that reads, “Amazon has a ready audience for its new supply-chain software with a phalanx of small- and medium-size businesses in its third-party marketplace.”
The caption should have read: “Amazon recognized yet another opportunity to devour some sweet innocents.”
Can somebody please run a correction?