September 14, 2012

September 14, 2012

10 Things Amazon Won’t Tell You

Welcome to another day in my life. Today is Friday and we have almost made it through another work week. I hope you are having a safe and great week so far. It is another busy week for Dab the AIDS Bear and me.

Because the bear and I are so busy I have to do a lot of my shopping online to save time. Yesterday, I started a blog on 10 things Amazon won't share with you because it is one of the websites I use a lot. Today I will finish with the last five reasons.

6. “We hurt mom-and-pop stores.”

Amazon’s 24/7 site and low prices have been blamed for putting local bookstores out of business, analysts say. Brick-and-mortar stores with high overheads and sales taxes simply can’t match Amazon’s discounts. Even big chains like Borders have been outpriced by Amazon, said R.J. Hottovy, an analyst with Morningstar. But it’s independent stores that really feel the heat, he said. Ten years ago, there were about 4,000 independent bookstores in the U.S., according to the American Booksellers Association. Today, only about 1,900 remain. Amazon has revolutionized book publishing, Hottovy said, and smaller bookstores were unable to keep up. Some 28% of people who bought books online said they had looked at the book in an actual bookstore first, according to a 2011 survey by Codex. More than a third of Kindle Fire owners say they price-checked book prices at brick-and-mortar stores before buying their books online. Codex estimates that Amazon makes up 70% of online print book market and over 60% of the e-book market. “So any showrooming in bookstores will most prominently benefit Amazon,” he said.

7. “We’re slow to improve our working conditions.”

Amazon has come a long way since founder and CEO Jeff Bezos set up the company in his garage and packed boxes himself. Now the company has corporate offices, customer service centers, warehouses in 18 states, and 69 “fulfillment centers” globally. But not all of them are exactly state of the art. Last summer, some Amazon workers in a warehouse in Allentown, Penn. fainted due to temperatures in the building that soared above 95 degrees. Some workers were taken to the hospital, prompting complaints to federal authorities. After a local newspaper, the Morning Call, wrote about the incident last September, Amazon did not dispute the report and set aside $2.4 million to install industrial air conditioning units in four of its distribution centers.

At the time, the retailer said in a statement that it had shortened shifts, increased breaks, issued “constant reminders and help about rehydration,” and added extra ice machines. The controversy didn’t end there, however: more than 100 protesters staged a rally outside the company’s annual shareholders meeting at the Seattle Art Museum last May. At that meeting, Bezos pledged to spend $52 million this year retrofitting its warehouses with air conditioning. The local paper that broke the story has since reported a “dramatic change” at the warehouse.

Marketing experts say the controversy hasn’t done much damage to Amazon’s brand. As with Apple, negative publicity doesn’t seem to affect the loyalty of Amazon’s customers, said Robert Passikoff, president of BrandKeys marketing firm in New York. Loyal customers are six times more likely to give certain brands the benefit of the doubt in the face of negative publicity, his research found. “Amazon maintains a very strong and consumer-friendly brand,” Passikoff said.

Amazon declined to comment.

8. “We know more about you than you think.”

Amazon has troves of data on what its customers browse and buy. The company said it will share that information with third parties, but never sell it. Critics have expressed concerns about its user privacy, most recently over Silk, the browser used on Amazon’s Kindle. To facilitate faster browsing, Silk works partially on the tablet and on Amazon’s “EC2” cloud—a virtual storage system that lives on Amazon’s servers. Chester Wisniewski, senior security adviser at Sophos, an online security consultancy, said all surfing habits on the Fire will be transmitted to Amazon’s cloud. “Social networking sites are watching what you do on their sites, but this service is guaranteed to have a record of everything you do on the web.”

Last October, Rep. Ed Markey (D-Mass.) wrote to Bezos, asking Amazon what kind of information Amazon collects from Kindle Fire users. In a two-page response to Congress last November, Paul Misener, Amazon’s vice president for global public policy, said the Silk browser data would not be linked to individual Kindle users. Markey later complained that Amazon’s response to his letter did “not provide enough detail about how the company intends to use customer information, beyond acknowledging that the company uses this valuable information.” The company’s privacy policy states that customers can switch the “cloud acceleration” feature off. (A spokesman for Amazon declined to comment.)

Amazon has one of the world’s largest user databases, information it uses extensively, said Jules Polonetsky, director of the Future of Privacy Forum, a Washington, D.C.-based think tank. “Amazon has made data use a key part of its value proposition for users,” he said. “You don’t have to read their privacy policy to know they track you.” But Polonetsky said it has avoided a lot of criticism because consumers believe that data is being used to help them make better purchasing decisions. “They say straight up: ‘Here are the books we think you would like’ and users seem to get that.” Once consumers believe their data is being used “for” them rather than “against” them, they are less likely to pay attention to how their buying habits are being tracked, he said.

9. “Our recommendations leave shoppers flummoxed.”

Amazon uses the troves of data it collects about users to make product recommendations. But the results often leave consumers bewildered. Here’s how they work: When customers create an account and browse or buy items, other similar products pop up on a their personalized Amazon account page. According to the site: “Your is a way of making sure that you don’t miss the perfect item.” Too often, however, the algorithms come up with products that are less than perfect experts say.

Here are some wacky recommendations listed by this customer on Amazon’s online forum: Dockers men’s original pleated khaki pants “recommended because you rated Star Wars Trilogy” and pure cotton handkerchiefs “recommended because you added Blink : The Power of Thinking Without Thinking to your Wish List.”

Jakob Nielsen said he’s rarely happy with the kind of recommendations he gets for classical music and movies, and said Amazon’s search function isn’t much better. He recently searched for the “most recent” work by the science fiction writer Larry Niven. He was recommended the novel “The Mote In God’s Eye.” “I read that 20 years ago,” he said. He’s had similar problems searching for classical music. (The audiobook was published in 2012, but the book itself was published in 1974.) “They don’t have an understanding between what you need and a product with the word in it,” he said.

Of course, there are ways for Amazon customers to help the site make more accurate recommendations. For example, they can “like” various books or music via the “Amazon Betterizer” function or remove previous purchases from being used to predict their shopping habits by clicking “Don’t use for recommendations” or clicking “Delete this item” from the browsing history. Recommended products that offend the most can be removed by clicking “fix this recommendation.” Nielsen said the site has an impressive range of products and appreciates the herculean task, but said the constant stream of odd recommendations “pollutes the service.”

10. “We don’t always have the best deals.”

Experts say even the most loyal Amazon customer may be better off getting a little exercise and shopping in their local store instead. A case in point: In the past six months, listed 228 product deals sold by Best Buy. In instances “Best Buy had a lower price on that item than Amazon or any other reputable merchant,” according to Dan de Grandpre, editor of the retail aggregator. These include deals on everything from digital cameras to gaming consoles, he said. Trang from agrees. “If Amazon always had the lowest price, then deal sites like us would only highlight Amazon deals and that simply isn’t the case.” This is true for big ticket items, too. He cites this 50-inch LG plasma screen television set, which costs $650 from Best Buy and Dell - $70 cheaper than the current offer via According to the site, most third-party vendors selling items pay fees and a percentage of the sale price to Amazon. Trang said vendors get massive exposure for their products, but these fees can help push up the final price tag on some items. He said Amazon has successfully dominated the book market, but it’s sometimes harder to achieve those same economies of scale and cheap shipping costs with larger, big-ticket electronic items.

Amazon did not comment. But at least now you can shop knowing these things and compare with others.

Hope you have a beary safe and great Friday!

Until we meet again; here's wishing you health, hope, happiness and just enough.

big bear hug,

Daddy Dab