Apple And Amazon Have A Problem: People Don’t Want to Buy Stuff Anymore

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People don't want to buy stuff anymore? Really?

The failure of the Fire Phone has been widely cited as the reason for Amazon’s disastrous quarter, but a darker cloud has settled over the world’s biggest online retailer. The core of Amazon’s business—its original reason for being: selling books and other media—has grown wobbly. The problem: many people no longer want to buy stuff. They’d rather rent.
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They'd rather rent my ass. Wage stagnation since 1970 and, even with Fed pumping, declining credit, means there is a massive demand gap. Won't happen until we fix that and the middle class actually starts growing again.
 
What the fuck? Maybe its the fact that everyone is fucking broke because megacorporations and rich individuals control 99% of the world's money already.

OH NO EVERYONE WOULD RATHER JUST GIVE US MONEY IN EXCHANGE FOR "ACCESS"


this makes waaay more sense...
 
The phone was ok. But I think the press bagged on it above and beyond what it may have deserved. I think they didn't want to know another system which really isn't much different unless your a complete Google services whore, so they cheer-led its underwhelming debut.
 
the mega corporations will just find other ways to keep their unsustainable growth... rental is indeed on their radar
 
We don't actually own what we buy anyways these days it seems - everyone wants to move to a license for access model. For example, textbooks are intentionally made obsolete after 2 years to hurt the used market. McGraw-Hill and co send "sales reps" out to universities to get professors to tow this line so they can continue selling for $175(etc). This is why renting makes more sense. Amazon will usually rent for 1/4 of the cost, so it makes sense instead of risking a resale value of very little.
 
Steve said:
People don't want to buy stuff anymore? Really?
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There original reason for being was never to buy books and media. That was just the jumping off point. Bezos always envisioned a massive online marketplace where he could sell anything and everything. Books and then eventually CD's were just a simple starting point.

As it relates to media there is obviously a growing trend of "renting" music in the form of the various media streaming services. This is a direct outcome of Apple's desire to eliminate the concept of the album and allow people to buy individual songs. This, IMO, has further eroded the quality of music that is produced today and most people don't want to buy an album with 2 good tracks and 11 other garbage ones thrown in. If artists start making respectable music again more people will buy the entire album.

Renting would also be an attractive option on other things such as home appliances which are built like absolute garbage these days. I'd gladly rent a dishwasher for $10/month on a 5 year contract if it was repaired/replaced by the company when it inevitably breaks after 2 years (I speak from experience on this one).
 
As long as the economy keeps "growing" at a rate that doesn't keep up with population growth and legal and staggering illegal immigration retailers aren't going to see profit growth they are liking for. No matter how high the bubble grows in the stock market it's not going to make up for the absence of spending cash in the people's pockets.

No matter how much welfare and subsidized housing that gets thrown around, eventually you run out of other people's money to give away and they stop spending what little extra they have on cramp they didn't really need in the first place.

It also doesn't help them that those in their30's and slightly younger have learned from their parents mistakes and aren't spending on credit like the two generations before them. More people also discovering theirs life outside their material possessions also doesn't help these company's bottom lines...
 
Well, charging so much at launch for a forked version of android with 18 month old specs AND limiting it to one carrier?
They just had WIN written all over it....
 
But according to Amazon, a leading culprit is something that at least sounds much more innocuous: textbooks. “As you look at our North American media growth rates, one thing that we are seeing is certainly a shift from a textbook standpoint from purchase to rental,”
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Now I can surely understand this, textbooks are not cheap by any stretch of the imagination. And with new editions coming out every other year for books with no real change in information simply for the purpose of not allowing a 2nd hand market to cut into their profit margin. But does Amazon really sell that many textbooks that this is an issue at all?

I for the life of me can not think of anything that I rent instead of buy, except perhaps that "rental fee" that's on my DirecTV receiver, or a car when I go on vacation.
 
ThisIsTheNewSound said:
What the fuck? Maybe its the fact that everyone is fucking broke because megacorporations and rich individuals control 99% of the world's money already.
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"Maybe if you worked for what you wanted you'd own some of that, too."

- Corporations and CEO's.


I am in no way suggesting wealth distribution, but the more I look around the more I realize that wages MUST increase for the middle class. Notice I said middle class, not burger flippers wanting $15/hr.

We have to be the greediest country in the world and I both anticipate and dread the day our current system collapses because trickle down economics is bullshit. In theory its great, in current practice it sucks shit. I can't wait until the top 1% isn't making any more money, but when that happens that means I'll be broke off my ass...and I'm not looking forward to that.
 
OEM said:
"Maybe if you worked for what you wanted you'd own some of that, too."

- Corporations and CEO's.


I am in no way suggesting wealth distribution, but the more I look around the more I realize that wages MUST increase for the middle class. Notice I said middle class, not burger flippers wanting $15/hr.

We have to be the greediest country in the world and I both anticipate and dread the day our current system collapses because trickle down economics is bullshit. In theory its great, in current practice it sucks shit. I can't wait until the top 1% isn't making any more money, but when that happens that means I'll be broke off my ass...and I'm not looking forward to that.
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Wealth redistribution happens naturally, but not on it's own.

The only question is whether it is going to happen peacefully or violently. Same way it's always been. To date it has always been violent.

I would hope that some day we move past the cycle that has plagued our society for almost 7,000 years but I'm not hopeful.

Philosophy aside, and back to the slow down in online purchases, I would love to see a bit of a slow down in the consumer orgy that is modern life.
 
Trickle down works great, problem it is trickles right past American middle and lower class all the way down to the poor Chinese. Just look how much better they're doing now that we've sent them all of our manufacturing jobs.
 
Maybe it's because of Amazing charging tax in so many states now?

I know that I certainly shopped there more when I didn't have to pay the same tax that I pay in store, now the prices aren't as cheap in the end, especially on larger items, I just get them at the store instead like I used to.
 
sfsuphysics said:
Now I can surely understand this, textbooks are not cheap by any stretch of the imagination. And with new editions coming out every other year for books with no real change in information simply for the purpose of not allowing a 2nd hand market to cut into their profit margin. But does Amazon really sell that many textbooks that this is an issue at all?

I for the life of me can not think of anything that I rent instead of buy, except perhaps that "rental fee" that's on my DirecTV receiver, or a car when I go on vacation.
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amazon sells and rents massive amounts of text books. in fact, so many that they have an entire business model revolving around student prime.
 
OEM said:
"Maybe if you worked for what you wanted you'd own some of that, too."

- Corporations and CEO's.


I am in no way suggesting wealth distribution, but the more I look around the more I realize that wages MUST increase for the middle class. Notice I said middle class, not burger flippers wanting $15/hr.
Click to expand...

Why not? McDonald's in Denmark pays their employees the equivalent of $20 USD, and a Big Mac there only costs $0.80 cents more. So in a country with massively higher taxes and 4x the employee wage, McDonalds can somehow magically still make a profit, with only a 16% increase in the price of the good.

That is how the middle class grows, wages going to more employees, Henry Fords making sure his employees can buy his goods.
 
deadlift1 said:
There original reason for being was never to buy books and media. That was just the jumping off point. Bezos always envisioned a massive online marketplace where he could sell anything and everything. Books and then eventually CD's were just a simple starting point.

As it relates to media there is obviously a growing trend of "renting" music in the form of the various media streaming services. This is a direct outcome of Apple's desire to eliminate the concept of the album and allow people to buy individual songs. This, IMO, has further eroded the quality of music that is produced today and most people don't want to buy an album with 2 good tracks and 11 other garbage ones thrown in. If artists start making respectable music again more people will buy the entire album.

Renting would also be an attractive option on other things such as home appliances which are built like absolute garbage these days. I'd gladly rent a dishwasher for $10/month on a 5 year contract if it was repaired/replaced by the company when it inevitably breaks after 2 years (I speak from experience on this one).
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I believe renting/service model is more popular now because it provides more value to the consumer in a way they find it handy.

Technology has bridged the gap of what renting used to be, monetarily more efficient but a hassle to manage time limits, physical stores and physical limits to rent to now where its still cheaper but also on-demand and virtually no limits due to streaming/internet.

Renting entertainment is of better value for the most part always has been. Music a little less so since you tend to relisten to music more then other types of entertainment.

The fact that you believe only 2 songs per album has almost nothing to do with the popularity of services/rental vs albums.

If you think the notion of 2 good songs is a new concept, you would be mistaken. Just as my folks thought my music is garbage... you seem to think todays music is garbage.

People have been complaining about 2 good songs on an album for decades... People were using the same excuse to support Napster AND then eventually Apple's single song marketing.

I don't know how selling songs in singles promotes bad song creation... If anything it promotes good songs and deters the creation of bad/filler songs that were present in the "ol' days"

Its funny as I grow up I see myself turning into my folks and their generation. I laugh at myself as I remember how "I wasn't going to be like them"... I was a dumbass.
 
For a lot of the stuff I want to buy, Amazon doesn't have the best prices. I used to shop a lot there, but I'm finding out that there are local stores that I've been ignoring that have better deals. Even the mall's prices are sometimes less expensive if you can get a good deal on a sale. There's always Ebay.
 
The TOS for digital media from many corporations states the user doesn't own it when purchased.
So why purchase something we will never own.
 
what are you guys all talking about? have we not been told time and time again how great the economy is these days?!
 
Amazon sells a lot of stuff. I buy a lot of stuff. Their phone? Meh - not interested at all.
Videos? I'd probably rather rent. Most movies nowadays are not that great (admitting that there are some good ones every now and then).
Wages do not go up. My employer has been raising health insurance premiums and lowering what it covers. We have not had raises in a while. Costs are going up...I remember in the late 90's when I paid .79 for gasoline. Now it's over $3. I also remember when you could buy a combo meal at fast food places for $2.99
Just about everything has gone up faster than wages. Sure, I can look around for a new job. Come to think of it, I'm wasting time here right now...
 
WHO is pining to f'n rent?! And what are they renting, did I miss something in The Fine Article? I canceled Amazon Prime when CA tax kicked in. Now I bunch up my purchases into a single order as needed, or buy local if the price is close, or a close price match at Fry's. Plus, even though my income is generous, finally feeling the pinch out here in the Bay Area with stratospheric housing costs, and food prices at the local supermarket have notably jumped.
 
xorbe said:
WHO is pining to f'n rent?! And what are they renting, did I miss something in The Fine Article? I canceled Amazon Prime when CA tax kicked in. Now I bunch up my purchases into a single order as needed, or buy local if the price is close, or a close price match at Fry's. Plus, even though my income is generous, finally feeling the pinch out here in the Bay Area with stratospheric housing costs, and food prices at the local supermarket have notably jumped.
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Same here, hit up Ranch 99 or Costco.
 
Here are my thoughts... follow along, shall we?

First off... televisions. A conservative estimate of a lifetime of a television is about 10 years. From 2008 on, people were purchasing high-definition televisions to replace their standard-definition televisions. I would imagine that the first television that gets replaced is the living room television, then as secondary televisions break in bedrooms and kitchens, the living room television gets replaced with a bigger/better model, and what used to be the living room television gets used elsewhere. (See Nobody Needs a New TV Anymore.) The kids don't care about the feature set as long as it plays their latest shows.

Computers... first off, beyond the specialty forums such as HardOCP where we know how to harness the power of the computer beyond web browsing, Most people just use the computer to word process, web browse, email, and watch cat videos. A $400 (or less) laptop is more than powerful enough to fit those needs. Also, both Windows Vista and Windows 8 had bad reputations, and people are avoid the purchases of said computers.

Media... I'm old school, and I like collecting the movies on physical media. Many people have purchased the movies that they wanted on DVD, and are very hesitant about the repurchase on BluRay. In addition, if you have a good Internet connection, why purchase the movie when you can watch it through Netflix, Amazon Prime, or Hulu?

Discretionary income... all of the above falls under the category of discretionary income... in other words... income that is beyond filling the needed expenses such as mortgage, house payment, food, clothing, and so on. The amount of discretionary income has gone down in the past few years. In addition, as we get older, we focus on other things such as saving for retirement. This cuts into the discretionary spending.
 
For a huge % of population, there is no discretionary spending, there is only dept spending. And if it's not on the credit card there are plenty of 'services' claiming dibs on various slices of the monthly pie.
 
I think the title of this my be a bit misleading. It's not renting per se but subscriptions. A flat fee for access to all the music and books I want (I have a Safari Online subscriptions for technical books and resources). But I think Amazon's problems are much deeper than this. Yes, it's the number one online retailer but the margins in that business don't give it much breathing room to cover other endeavors, like the Fire Phone, if they don't pan out. Amazon just doesn't have the money to slug it out in phones.
 
OEM said:
"Maybe if you worked for what you wanted you'd own some of that, too."

- Corporations and CEO's.


I am in no way suggesting wealth distribution, but the more I look around the more I realize that wages MUST increase for the middle class. Notice I said middle class, not burger flippers wanting $15/hr.

We have to be the greediest country in the world and I both anticipate and dread the day our current system collapses because trickle down economics is bullshit. In theory its great, in current practice it sucks shit. I can't wait until the top 1% isn't making any more money, but when that happens that means I'll be broke off my ass...and I'm not looking forward to that.
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I guess it depends on the part of the country you are in. I know generally the wages for engineers in my area have gone up across the board. People are moving to Texas in record numbers and housing prices are shooting up but still very manageable.

But the reason Amazon is seeing less $$$ is because simply B&M have gotten rid of the advantage Amazon had over them. Walmart is getting super competitive, same with bestbuy and plenty of other places with price match and since you have to pay taxes anyways why not get it faster.
 
the whole world uses amazon, they rule the internet, AWS is masstive, i cant imagine they are having a tough time.. so they are making 145 billion this year instead of the 150 billion they promised investors :/
 
TwistedAegis said:
Why not? McDonald's in Denmark pays their employees the equivalent of $20 USD, and a Big Mac there only costs $0.80 cents more. So in a country with massively higher taxes and 4x the employee wage, McDonalds can somehow magically still make a profit, with only a 16% increase in the price of the good.

That is how the middle class grows, wages going to more employees, Henry Fords making sure his employees can buy his goods.
Click to expand...
Yeah but increasing the wage for McDonald's employees to $15/hour will surely make prices of things go up which is why wages obviously have to be kept low. Actually, let's lower minimum wage so that prices for things at the store will be cheaper because apparently that's how economics works here in the U.S.
 
Techx said:
the whole world uses amazon, they rule the internet, AWS is masstive, i cant imagine they are having a tough time.. so they are making 145 billion this year instead of the 150 billion they promised investors :/
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Except they aren't making 145 billion, they're making less than zero now with no profitable quarter in sight. And yes AWS is huge but Azure is coming on very strong and there's also Google and IBM to contend with. Where Amazon is going to be able to make sustained profits is increasingly becoming a question that right now they don't have an answer.
 
OEM said:
We have to be the greediest country in the world and I both anticipate and dread the day our current system collapses because trickle down economics is bullshit. In theory its great, in current practice it sucks shit. I can't wait until the top 1% isn't making any more money, but when that happens that means I'll be broke off my ass...and I'm not looking forward to that.
Click to expand...

Don't blame the current economy on "trickle down economics". The closest we came to what many on the left refer to "trickle down economics", was during the late 80's and early 90's. You remember those time, when real unemployment was around 5%, and anyone who wanted a job had one. I even remember the fast food places paying $2-$3 over minimum wage, because they couldn't; find enough workers. That's also when I saw the largest increases in my pay.

What we have now is "trickle up economics". That somehow, if the government hands out enough money to the poor and gives big business a bunch of subsidies, that somehow it will help the middle class. Instead it just distorts the economy, destroys jobs, and creates inflation.

The reason people are renting is because they can't afford to buy what they want. The problem is that they also can't afford to rent it either. In the long run they will run out of money since they can't just print more like the government.
 
nutzo said:
What we have now is "trickle up economics". That somehow, if the government hands out enough money to the poor and gives big business a bunch of subsidies, that somehow it will help the middle class. Instead it just distorts the economy, destroys jobs, and creates inflation.
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I think the idea of "trickle" up or down misses the basic economic point. What's the best way to spur economic expansion, investment or spending? Clearly both are important however during downturns few are looking to invest, indeed there's generally less need to invest in a downturn as the economy generally has excess capacity.

In an economy that's 2/3rds based on consumer spending there's really no way to pick up the economic pace without consumer spending.
 
Mainly Im just broke. Ive got very little discretionary income and so I dont have a whole lot to blow on toys like I used to. When I do buy stuff, local stores are close enough to online prices now that Id rather just buy from them. Yeah its a couple bucks more but I dont have to wait for it to be shipped. If its broke I can just return it the next day instead of waiting weeks dealing with those bastards at Newegg and the crooks in their RMA dept. To me that convenience more than makes up for the extra few bucks Ill be shelling out. So me being broke and local B&M stores being close in price but way ahead in convenience are why I dont buy shit off Amazon or Newegg or whoever as much anymore.
 
mavrocket said:
It also doesn't help them that those in their30's and slightly younger have learned from their parents mistakes and aren't spending on credit like the two generations before them. More people also discovering theirs life outside their material possessions also doesn't help these company's bottom lines...
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Agree, and I see it in my own line of work peddling higher end "toy" car stuff. The customer is changing, the cars are changing, the buying habits and expectations are changing, none of it for the better from a profit making standpoint. Pretty much everyone I know between 25 and 40 now is really not into the whole buy crap scene. Especially anything on credit. I think Amazon and the like know it too and are, sporadically, acting on it. I'd hate to be selling cars or big ticket stuff for a living these days.
 
jpm100 said:
The phone was ok. But I think the press bagged on it above and beyond what it may have deserved. I think they didn't want to know another system which really isn't much different unless your a complete Google services whore, so they cheer-led its underwhelming debut.
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This is happening more and more. Basically the Tech press feel that if they can do their work on a iPad and a iPhone in a Starbucks then that's all anyone else could ever need.
 
TwistedAegis said:
Wage stagnation since 1970 and, even with Fed pumping, declining credit, means there is a massive demand gap. Won't happen until we fix that and the middle class actually starts growing again.
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How about ruinous tax rates? The amount of money the feds, state and local "authorities" remove from my paycheck every week is more than some people earn in the same time period.

I think I know better how to spend my money then some faceless bureaucrat but I digress.

The idiot governor of the state where I'm living pushed through the largest tax increase in history and can't figure out why people are fleeing the state in droves or why the pool of people working here has been unchanged for over 2 decades.

I'd have more money to spend on goods and services if fewer people were in my wallet before me.
 
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