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The Almighty Buck Businesses

A Second Prime Sale Shows Amazon is Nervous About the Economy Too (latimes.com) 51

Posted by msmash from the reading-between-the-lines dept.
Holiday bargain shopping is starting extra early this year. And that could be good news for shoppers, even if it signals slightly worrisome things for the economy. From a report: E-commerce giant Amazon announced plans Monday for "a new two-day global shopping event" exclusive to members of its Prime loyalty program. Dubbed Prime Early Access Sale, the promotion is similar to Prime Day, the annual sale held in July to generate a bonanza of orders and new subscribers. Rival retail giants Walmart and Target have already signaled plans to kick off holiday sales earlier than ever, setting the stage for a long holiday shopping season with significant discounts. With warehouses and store shelves suddenly full of inventory after two years of supply chain disruptions, deals will be easier to come by than since the start of the COVID-19 pandemic, say retail experts.

Amazon's bonus sales event may be a sign that retailers are concerned that Americans will keep a tight grip on their wallets this holiday season because of fears over inflation, rising interest rates and predictions of an oncoming recession. An Amazon spokesperson said that the company -- with annual sales of more than $470 billion last year -- added the second online sale to help overcome such worries. "In light of inflation and economic head winds, we want to help members save throughout the season," said Amazon spokesperson Deanna Zawilinski. [...] Helping fuel the sales competition is an oversupply of merchandise -- including clothes, toys, electronics, furniture and other popular consumer goods -- that retailers ordered to meet expected consumer demand but that were delayed for months because of supply chain problems. The items are now taking up valuable space in warehouses and store shelves. With a recent surge in inflation and rising gasoline prices, Americans haven't been spending on such items as much as retailers anticipated. Store owners and retail operators now need to move those items off the shelves to make way for new holiday merchandise.
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A Second Prime Sale Shows Amazon is Nervous About the Economy Too More

A Second Prime Sale Shows Amazon is Nervous About the Economy Too

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  • Walmart has had Christmas decorations up... (Score:5, Insightful)

    by AmazingRuss ( 555076 ) on Tuesday September 27, 2022 @03:07PM (#62918825)
    ... for a few weeks now. It's not the Christmas Season anymore. It's the Christmas Quarter, and it is expected to perform.
    • Pfft. Crazy Eddie used to hold a Christmas sale... in August.
    • The "holiday sales" tie-in is just annoying, but the main point is this - what this blurb is describing is counter-inflationary pricing pressure. A "bonus sales event" to move goods that aren't moving because of "a recent surge in inflation" is just another way of saying that inflation is slowing down or about to slow down. So let's just hope this landing is soft.

      • Re:Walmart has had Christmas decorations up... (Score:5, Insightful)

        by Waffle Iron ( 339739 ) on Tuesday September 27, 2022 @03:30PM (#62918871)

        I think that the past year or two has been an excuse for companies to jack up prices because consumers have been "expecting" them to rise. All businesses have been raising them as fast as they can because, for the first time in a few decades, buyers have been willing to place the blame on the economy in general instead of that particular seller.

        However, they've all been increasing the pricing momentum like Wile E. Coyote, going faster and faster until they run over a cliff, where consumers choose to just stop buying their stuff. Now outfits like Amazon could be standing in mid-air, feeling around with their toes as they realize that there might no longer a pricing floor below them. Maybe it's time for them to look up at the camera for a brief second and gulp right before they drop.

        • Re: (Score:2)

          by Jhon ( 241832 )

          "I think that the past year or two has been an excuse for companies to jack up prices because consumers have been "expecting" them to rise."

          Can you provide evidence of prices increasing with zero increasing to cost of the things being sold -- from manufacture to distribution?

          If not, your 'thoughts' aren't really worth much. I'm not saying this to be mean -- but you're making a claim that is very inflammatory.

          "for the first time in a few decades, buyers have been willing to place the blame on the economy in

          • Manufacturers and distributors have also increasing prices because they can get away with it for the time being.

      • A "bonus sales event" to move goods that aren't moving because of "a recent surge in inflation" is just another way of saying that inflation is slowing down or about to slow down.

        No, it's actually saying two things.

        1. Our shit you don't need, is still way overpriced. You really won't buy it unless it's on sale.

        2. PLEASE come buy our shit you don't need. We can't maintain our corrupt stock price unless you do.

        Utter Bullshit working in marketing, is certainly not a "recent" hire.

  • Prices are down under $4 where I live (Puget Sound region) from a high of about $5.50 earlier this summer.

    • Re: (Score:2)

      by tsqr ( 808554 )

      Prices are down under $4 where I live (Puget Sound region) from a high of about $5.50 earlier this summer.

      And here in Ventura County, CA, prices have gone up $.70/gal in the past month, back up to near $6/gal.

      • Re: (Score:2)

        by sconeu ( 64226 )

        Here in the San Fernando Valley, prices literally went up 40 cents in two days. From $5.49 to $5.89 for regular.

        • Saw the same thing in San Diego county also. Probably shutoff a refinery for maintenance and now we're short. Feels like gas always goes up just before the Winter blend goes out to the pumps. Day light saving time is coming, yada yada.

      • Diesel has been 6.99 for months up here in Humboldt. Gas fluctuated slightly, but remained relatively flat as well.

    • Re: (Score:3)

      by Luckyo ( 1726890 )

      This is getting highly localized because of advancing de-globalization hitting even different regions inside larger countries, as there are two primary factors setting fuel prices. First is the global price of your locally used oil blend, and second is your local refinery's refining premiums.

      We had a massive crash in investment into refining capacity in places where ESG investing took off about five years ago, halving the total refining investments. Yes, they literally were cut down in half because Greens c

  • I am sure its about inventory (Score:5, Insightful)

    by DarkOx ( 621550 ) on Tuesday September 27, 2022 @03:20PM (#62918855) Journal

    Retail is about inventory turns. Consumers trickling off their buying just a few points can lead inventory sitting on the self. Its not just a delay in revenue - like if you turn down the low ball offer for your used car, knowing someone will be along next week with a fair offer, its if you don't sell it now you won't or you'll have to massively write it down. There are lot seasonal and trend driven goods from clothing to electronics. You won't sell to many of last years fashions in many clothing segments, nobody is going buy last years model HD-TV unless you are giving it away practically.

    Better to throw all your existing prime customers some of your margin now, than take outright losses later.

    • Exactly this (Score:4, Insightful)

      by SuperKendall ( 25149 ) on Tuesday September 27, 2022 @03:44PM (#62918903)

      So many retailers are sitting on a lot of inventory, that they have to also store. Amazon does have lots of huge warehouses but even they try not to keep a huge amount of stock around generally...

      Over the next six month, probably some really good deals if you have spare funds to buy things you want.

  • I've been disappointed in the last few years with the sales - Black Friday, Prime Day, whatever. Like most consumers I'm looking for something significant. Give me a shot at a set of decent surround speakers for 50% off.

    Offering me 15% of paper towels with a countdown timer just pisses me off.

    • Re:I'll peruse. (Score:5, Insightful)

      by TigerPlish ( 174064 ) on Tuesday September 27, 2022 @03:33PM (#62918883)

      Give me a shot at a set of decent surround speakers for 50% off

      Buy used. No, seriously - buy used. Good speakers don't suffer foam rot and all that garbage.

      A 30 year old set of Klipsch Fortes, or a 40 year old set of Cornwalls will still do the job as well as they did on Day One.

      Ditto for surrounds.

      Buying used is the only way some of us can have truly Nice Things. That's just how it is, how it's always been, too. Let some rich fool take the initial hit, and then swoop in and pick it up at a hefty discount when they tire of it.

      My turntable is from 1975, but back then it was top-shelf stuff. Still very competent today. My speakers for that system, 1987. I have amps and other stuff from the 70's and 80's in storage, I rotate 'em around when I feel like it. All bought used, because for example, an Audio Research amp costs an obscene amount of money, criminal even -- but not used. Used it's attainable but us mere mortals.

      The only thing I don't like buying used is cars. How do I know the previous owner didn't treat it like an appliance, and ate lunch in the car every day for 3, 5, 7 years with the engine idling and the AC on? For a whole hour, every day? That's how some people eat lunch where I work at. That's *murder* on the engine, a sure way to coke it up.

      But I do understand what you're saying. The merchants, however, will *never* give us that kind of break. They buy on pennies on the dollar, and the most we'll see in discounts is 25%.. and that's a stretch.

      • Or just buy a good pair of headphones. Then you can surround your ears with sound.

        • And sound completely different to speakers. Headphones give you good bang for buck but you either want them or you want speakers, one isn't a replacement for the other.

          • But there's software that can simulate the feel of speakers, including the time lag. In a way headphones are better, as they filter the ambient noise. Speakers are good only if you also want to listen with your bones.

    • > Give me a shot at a set of decent surround speakers for 50% off.

      Normally I would recommend rtings.com [rtings.com] but their speaker list is garbage. THE place to go is AVS Forum [avsforum.com]

      Buying used off Craig's List is another great way to save money.

      Buying online, such as EMP Tek, now RBH, [rbhsound.com] has had discounts in the past.

      Hope this helps.

      • Normally I would recommend rtings.com but their speaker list is garbage. THE place to go is AVS Forum

        Audiogon for middle and hi-end stuff, and Reverb for musical instruments / amps

        Occasionally an estate sale will yield good stuff at great prices but people have wizened up, the days of finding a McIntosh tube amp for 20 bucks are long gone.

        • Thanks for mentioning Audiogon -- that had completely slipped my mind.

          I wasn't aware of Reverb. Thanks for the info!

    • I've been disappointed in the last few years with the sales - Black Friday, Prime Day, whatever. Like most consumers I'm looking for something significant. Give me a shot at a set of decent surround speakers for 50% off.

      Offering me 15% of paper towels with a countdown timer just pisses me off.

      I think the bigger issue is that smaller discounts don't necessarily work in this context.

      The last several times I perused through Prime Day things...I simply didn't find anything I could justify purchasing. "But it's $5!!" isn't a reason to buy an item that I don't need at $8, though it might work for an item that's normally $30...but at that point it barely covers the cost of shipping. Multiply that out however you want; "But it's $20!!" works with a $100 item, but it's not going to work with a $25 item.

      N

      • I think maybe they have whales that go for this kind of thing, similar to how mobile games have them. Hoarders buy it, let it spoil, and it gets carted to the landfill in a decade or so.
  • So now they have to have a second go at it.

  • The Beer Game (Score:4, Informative)

    by Whateverthisis ( 7004192 ) on Tuesday September 27, 2022 @05:13PM (#62919069)
    What we're seeing play out on a global scale was modeled in 1960 in an economics game called The Beer Game [wikipedia.org]. It actually models the effects of supply chain and system disruptions and what that does to resources. It basically creates a bull-whip effect on supply chains and can take many turns to sort out, often in deep collaboration with suppliers. It rarely sorts itself out on it's own without collaboration. Unfortunately we're seeing this on a global scale, which means a "turn" can be many months if not years.

    The net result is high cost, which economy-wide means high inflation, poor capacity utilization (ie factories are less efficient, leading to even higher cost), and high stock levels at all points in the supply chain. We saw the high stock levels when ships were bottlenecked at the ports, now we're seeing that high stock level at the retail side of things.

  • "In light of inflation and economic head winds, we want to help members save throughout the season," said Amazon spokesperson Deanna Zawilinski.

    Translate: We want to help members empty their wallets. Typical corporate doublespeak. What makes me curious is, does anybody actually believe this marketing crap? Or are they just flapping their jaws because they enjoy the sound of their own voices?

  • I doubt Amazon is worry. If they were, the sale would be open for everyone, not just prime users.

  • No more guaranteed 2-day shipping. I just started another Prime trial, placed an order, and one item will come in 3 days, and another item will come in 4 days. Last week, I placed an order without Prime, and it came in 3 days. What's the point of Prime? Last time I checked the Prime movie selection, it was poor too.

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