[indubitable]

I think many people tend to grossly overestimate the profit levels of large companies. Let's take Amazon since they're arguably the reason for the failure here and a company I think many perceive to be lush with money largely because of 'greed.' It also hits on notions from this paper like companies just not hiring enough employees, even if only at certain times.

Amazon currently grosses $178 billion. However, their net income is what matters. That's what's left over after paying cost of goods, salaries, rent, taxes, and so on. Basically what's left over after the mandatory expenses to keep your company running. And that's only $3 billion. 'Only' sounds funny preceding $3,000,000,000 and is undoubtedly what leads to complaints against Amazon (and here as well) that they're just being greedy, not paying employees enough, and so on.

But that's not really accurate. Amazon has 566,000 employees. If they gave each employee a $1000 raise. For those working your average 2000+ hour year that's a whopping $0.50/hour raise. Yet that marginal raise amounts to $0.56billion, or 1/6th of their entire remaining revenue. Interestingly enough 1 executive earning $1million in compensation is, by contrast, only 1/3000th of their remaining revenue. This critical calculation on the number of workers to fill any given role is why compensation and things can seem so lopsided. The sheer magnitude of the number of workers at many of these companies is very counter intuitive.

And this is the case for most large small margin companies. Back to Barnes and Noble, in 2016 they had a net income of -$24.5 million with 26,000 employees. Try to keep those figures in mind when considering this. I think the post that described any real solution for them as akin to 'shuffling chairs on the Titanic' is very apt.

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If anybody has a counter point here, I'd love to hear it. From my perspective it seems people are replacing reality with ideology, whether intentionally or not. We want to blame companies for being greedy, even when in reality the numbers don't really support such views. All jobs are disappearing, when we have 4.1% unemployment (even the U6 is down to 8.2%!), etc. I used to feel very similarly, but the numbers simply don't support these incredibly cynical views.

[itronitron]

I think people are more bothered by the stupidity of BN leadership than by their greed. Corporate is defining policy which is actively contributing to significant drops in store sales and then laying off all of their full-time retail employees which will further drive down their revenue. They used to be a very strong brand.

[bleezy]

You are being downvoted because Amazon is a bad example. They are intentionally not profitable so that they can lower prices to drive others out of the market and reinvest all revenue into R&D and horizontal expansion. They could net way more than $3B if they wanted to.

[indubitable]

I could not care less about downvotes, but I enjoy discussion. And I certainly think people would like to disagree with me, but it seems none are really able or willing to form coherent counter points - which I think puts a very sad frame on the disagreement. So I thank you for changing that, though I think there's something you may not have considered in your logic.

At the most basic level we can view a company's profitability as a price vs demand curve. If your price is too low then you're leaving money on the table. If it's too high then you're also losing money since you could earn more by charging less to more people. And I'm sure you'd agree that all companies are really trying to maximize that curve.

But the thing here is that competition is not some tertiary element not considered in our basic price vs demand curve. It's in most cases the single biggest driving factor of the demand function. When there's no real competition, you can increase your prices quite recklessly - see Time Warner or Comcast. But the amount that Amazon can increase their prices is strictly limited due to competition. If you're going to buy an electronic component do you buy it at e.g. New Egg or Amazon? It doesn't really matter if its the same thing - you're just going to go with wherever is cheaper in net (e.g. factoring in rewards/shipping/etc), even if that price difference is really quite small. The point here is that while you may think that Amazon could raise their prices let's say 5% and see a 1-2% growth in profit, but this is a question that they are undoubtedly constantly researching - and they disagree.

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And in any case this is literally the case for most all small margin businesses. For instance WalMart has 2.3 million employees and $13.6 billion net. Our $1k/year raise costs them $2.3 billion, or 1/6th of their entire available income. The only companies that are truly lush with money are companies that sell their product at extremely high markups, or companies whose product enables the minimize labor, such as software. For instance Apple, as an example of the former, nets $48.4 billion with 123,000 employees. A $1000/year raise there would work out to 1/400th of their available revenue. Google/Alphabet, as an example of the latter, had a bad year last year, but generally net around $20 billion on 72,000 employees. Their $1k raise works out to about 1/278th of their available revenue. It creates an ironic result that few people would complain about the wages Google or Apple offer, yet they actually offer their employees a far less 'fair' share of revenues than do the companies that people consider greedy.