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The companies announced on Wednesday that Amazon was acquiring Zappos, based in Henderson, Nev., for 10 million shares of Amazon stock, worth nearly $900 million at its current level.Amazon also said it would give Zappos employees an additional $40 million in cash and stock.
The acquisition is the largest in Amazon’s history.
>> I think that these are bad news
makeupalley, can you elaborate?
1. Us retailers
2. Customers
For #1, it just seems Amazon is the big gorilla in the room and they are slowly monopolizing the market in all areas. We recently got an email that said they could get the product we sell on amazon for $30 and free shipping. We pay more than $30 getting it wholesale and then mark it up and also add shipping. I told her there was no way we could compete on price, but our service would far exceed that of amazon. Of course we lost her.
For the customer, as amazon gobbles up more and more there is less and less competition. Less competition means higher prices, lower customer service, and an overall less competitive market.
For the customer, as amazon gobbles up more and more there is less and less competition. Less competition means higher prices, lower customer service, and an overall less competitive market.
yep
I think that these are bad news
Here's the letter from Tony Hsieh to his Zappos.com employees:
[blogs.zappos.com...]
For the customer, as amazon gobbles up more and more there is less and less competition. Less competition means higher prices, lower customer service, and an overall less competitive market.
If AMZN keeps swallowing companies, then it will be bad for other retailers. It's like a Wal Mart moving into a medium sized town where the hardware store, local pharmacy and other smaller businesses go under cause they can't compete on price. Individual merchants may still compete within the Amazon marketplace (or Ebay or Overstock or elsewhere for that matter).
I don't think it will be bad for the consumer unless the consumer drew their paycheck from a company that could no longer compete with Amazon on price. It would be rather odd for AMZN to raise prices, though of course they could. It seems like Bezos prides himself on efficiency and savings for the consumer rather than trying to get a monopoly so he can raise prices.
makeupalley, can you elaborate?
I believe that the background of this is the belief that merges (acquisitions) are usually hurting end consumers as the competition lessens - which makes sense to me. I personally don't like situations when 2 make 1. That is mostly when the acquired either is in trouble, or looks into own (read personal) interest only, aka, I get millions from this action, I'm done for my life (and of my grandchildren) - no big picture, that is, consumer side.
I guess feelings play a big role in such comments.
I've never purchased anything from Zappos but I don't see it being a bad merger for consumers. Even with Zappos under the Amazon umbrella there is no room to gouge customers, if they try the competition closes the gap (or enlarges it).
Edit: 900 million for a website and brand name is absurd, both can be re-created, had to say it.
Zappo takes it back. Even after some time, they take it back. I can get shoes that fit.
I'm a big fan of Amazon. I buy a lot from them. If Zappos becomes just another place to buy shoes, it's going to be heart-breaking. And my feet are going to hurt, too.
What if, sure it's a big theoretical leap, Amazon manages to take the good things some of us are fearing will disappear from Zappos, and incorporate them into their overall scheme? (Read: Amazon improves customer service to near-Zappos levels -- any customer service would be an improvement on Amazon, but how many people have really had difficulty?). What if Amazon isn't buying just a domain and brand, but is purchasing CRM and skilled management with proven techniques and vast experience? What if this is what causes the "mom and pop shops" to go under...better prices and the same service. Still upset then?
Just curious... :o)
