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11.15.2014

Amazon’s Broken, Unfixable, Rotten Core: Time to Salvage the Parts to Save the Cancerous Whole

Many of America’s inner cities are food deserts. They don’t have grocery stores, corner stores or any type of store really, excepting the occasional fast food establishment. If Amazon has its way, America itself will be a vast shopless desert where our goods come from massive automated, virtually workerless warehouses with our goods delivered by pilotless drones. That’s not science fiction, that’s Amazon.com’s vision for our future. Remember that this holiday season and beyond before you buy any physical product from Amazon.com that can be readily bought in your local community.

But the recent Amazon – Hachette debacle is a discernible symptom of something far worse: Amazon.com’s broken, unfixable, rotten core. The end of the public brawl makes no difference. As Douglas Preston stated in The New York Times, “If anyone thinks this is over they are deluding themselves. Amazon covets market share the way Napoleon coveted territory.” In “Amazon May Get Ubered,” a Newsweek columnist went even further, stating: “Hegemony never lasts in technology. The day the first pundit calls a tech superpower a dangerous monopoly, start looking for whatever is coming to overthrow it.”

Amazon.com was founded the same year I became a professional writer: 1994. I was an exuberant public supporter of the company in my bestselling books and high-profile articles read by millions from the start. I was even stupid enough to drive many millions more to Amazon.com through my popular websites, including Internet Daily News, the Writer’s Gallery, and Internet Job Center. Why? I was taken in hook, line and sinker by the way Amazon.com positioned itself as a righteous David in a world of unethical goliaths. How naïve I was, how wrong I was, for Amazon.com has developed into a heartless, soulless, unethical goliath that has demonstrated repeatedly and publicly it answers to no one—not investors, not employees, not partners, not even governments.

Worse, Amazon.com has a strangle-hold over an industry beloved by people around the world: publishing. This dangerous strangle-hold threatens the livelihoods of millions: authors, illustrators, publishers, editors, and others.

Not only is Amazon.com’s proximate monopoly control of the publishing industry untenable, but Amazon.com should be under investigation by governments worldwide for its many unfair labor and business practices. Although Amazon.com's exploitive labor and business practices have been the subjects of headlines around the world, no government has stepped in, taken action, and demanded that exploited workers and business partners, which include content creators, developers, publishers, authors and others, be made whole.

At Amazon.com’s broken core are its sales systems which reward those who see publishing as a zero sum game in which they lose out if another succeeds. Many in publishing will recognize the widespread use of malicious reviews and commentary as well as vicious attacks designed to sabotage sales and careers.

As many authors and industry pundits have stated publicly, there is absolutely no doubt whatsoever that many of these reviews, comments, and attacks come from other authors and persons related to other authors. Other nastiness comes from certain authors’ fans who see anyone else’s success as a threat to those authors, as well as those who just get off on attacking strangers in public.

The effect of spurious negative reviews is to undermine the reader’s confidence in making a purchase, to damage a book’s ranking, and to destroy an author’s sales. The flood of negativity isn’t about helping readers avoid a bad book—it’s about ruining careers and livelihoods.

How books are ranked on Amazon.com determines not only where they appear in search results, but whether they appear at all. Ranking also controls overall visibility throughout Amazon.com websites with regard to specials, lists, categories, features, promotions, and more.

How books are ranked on Amazon.com is dependent on several factors, including: how positive a book’s reviews are and how well a book is selling. Amazon.com looks not only at recent sales, but also at sales history and sales trends. Amazon.com looks not only at overall ratings, but also at review and rating trends, up/down voting of reviews, and how recently a book has been reviewed.

Those with destructive intent know how the sales systems work and they use the systems to cause harm. They do this in many ways, including by ensuring negative reviews stay visible, where they are most effective and cause the most harm. Thus, not only do they often ensure recent reviews are negative, they often vote up past negative reviews while voting down any positive reviews. They do this to torpedo an author’s sales.

Amazon.com’s rotten core doesn’t just affect the publishing industry—it affects the entire entertainment industry and other industries as well. The same nastiness that occurs with books, ebooks and audiobooks also occurs with other products sold on Amazon.com, including music, movies, video games, apps, and more. Amazon.com’s rotten core does, in fact, extend to every part of its operations.

As I wrote about in Selling Your Soul to the Company Store: Amazon’s Mistreatment of Its Employees, Amazon.com’s unfair labor and business practices have been widely documented, but no one is doing anything about them. As a public company, Amazon.com has been funded by starry-eyed investors who, like me, believed the Rumpelstiltskin-spinning-straw-into-gold stories coming out of Seattle. Stories that don’t hold water in the face Amazon.com’s epic failure to become a consistently profitable company.

Amazon.com is no longer a 2-year-old startup that can make empty promises and deliver empty air. What is there to show investors after 20 years in the business? What is there to show for endless promises that someday Amazon.com will start making a consistent profit? Billions upon billions of investors’ hard-earned money poured down a toilet drain, and a company whose parts are worth more separately than the cancer-ridden whole.

In tech years, Amazon.com is an octogenarian who can’t decide what he wants to be when he grows up. Does he want to be a product company, a hosting company, a device company, a services company, a streaming company, a shipping company, a publishing company, or a Hollywood movie producer? All of which, Amazon.com is currently trying to be—and all of which are bleeding the company of much needed operating cash.

Regarding cash on hand, financial analysts have stated the company doesn’t have enough cash on hand at any one time to pay what it owes its business partners: you know, the people whose products are sold on its site, including authors, developers, publishers, and other content creators. Instead, Amazon.com keeps itself afloat by relying on the fact that it generally has up to 90 days to pay its partners.

The emperor has no clothes. It’s time for investors to call Amazon to account. It’s time for business partners to demand prompt payment. It also may be time for a breakup of Amazon.com to salvage the remains of a cancerous whole. Like the breakup of the Bell System in 1982, the breakup of Amazon.com would effectively take a damaging monopoly and split it into entirely separate companies. Companies that would no longer have monopolistic controls. Companies that could start anew and rid themselves of their unfair labor and business practices roots. Companies that might even become consistently profitable.

Thanks for reading,

Robert Stanek


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