An old salesman joke: A salesman says, “We sell below cost.” A customer asks how he can do that. “Simple,” he says. “We buy below cost.”
For a day or so last week, Jeff Bezos passed Bill Gates as the richest man in the world. And that’s pretty much how he did it.
Bezos runs Amazon, which is primarily a shipping business. It relies on the U.S. Postal Service to deliver two-thirds of its packages. In many places now, it locates a depot near a post office, presorts the packages, and delivers them to the post office. The Postal Service, which has a monopoly on last-mile delivery, does the rest.
Since 2007, the Postal Service has been required to allocate 5.5 percent of its fixed costs to package delivery and to incorporate that into its pricing. That figure made sense then, but today, 25 percent of the Postal Service’s business is package delivery. And thanks to features of the Amazon deal – such as Sunday delivery, grocery delivery, even delivery from fish markets to local restaurants – the expenses have climbed.
In fact, they’ve climbed so much, according to a recent analysis by Citigroup, that the Postal Service should be charging Amazon $1.46 more per package than the $2 or so it does now. “Amazon now enjoys low rates unavailable to its competitors,” the Journal story said. “It’s as if Amazon gets a subsidized space on every mail truck.”
Jeff Bezos becomes the worlds wealthiest man, as the rest of us get poorer. Local jobs that disappear when the locals can’t compete with Amazon. Whole industries shut down when Amazon floods their niche with Chinese made crap. (and it is crap, mostly)
Bezos is a Globalist that supports the progressives and this ‘sweetheart’ deal got started during Obama’s long reign. During which Bezos bought the Washington Post which continues to support the progressive line. Funny that none of the cost cutters in Congress are blowing the whistle on this. Is this deal part of Bezos’s payoff?
Agree or disagree, as you wish. Just don’t talk about this around Alexa.