[iamacynic]

and of course, this is to amazon's benefit. the more concentrated their buying power, the more leverage they have over the vendor, the more profits they can squeeze from the entire supply chain, because shit rolls downhill.

most vendors of course will dive head-first into this arrangement with their eyes wide open, because most of them don't think long-term, they want that revenue now cost-be-damned, and quite frankly they're just not as good as the executives running amazon.

see: walmart from 10 years ago. wonder how many of those nice folks made the move from arkansas to seattle recently...

[digi_owl]

I find it interesting that Dell decided to take the company off the stock market so they could focus on the long term.

You get all these perverse incentives towards the short term via the board and the CEOs they pick (never mind the whole stock option bonuses etc the CEOs are offered).

[gizmo686]

Amazon benefits from being the winner in its winner-take-all market. It also benefits from having competition in the upstream markets.

For example, if Dominos were the only pizza provider, they would be able to offer whatever terms they wanted. Amazon only leverage would be mutually assured destruction [0] of not offering any pizza. If there is a diverse markets of pizza providers, Amazon can dictate the terms and drop any provider who does not play ball.

In fact, many companies make a point of having multiple upstream providers to limit the leverage any one provider has over them.

[0] Not quite an existential threat to either, but painful for both.

[losteric]

Inevitably to the detriment of most worker's wages, and regions that are outside of Amazon's logistical hot paths.