As for the Ant Financial comparison, I find it hard to believe that Amazon is not utilizing the reserves it gathers by selling gift cards on its platform. Those too are excess reserves to be paid to suppliers once customers utilizes and buys something from a supplier.

I would have thought that on Hackernews of all places people would recognize the scale that is involved with a site like Amazon and recognize that fixing this problem is far from trivial.

I'm sure Amazon is taking it very seriously - when have they ever shown anything but "obsession" about positive customer experiences. But it is hard, and it will take time to do it effectively without completely blocking all 3rd party sellers on the site.

I think Amazon is making a bet that reducing the number of SKUs in their warehouses is of greater value than counterfeiting is a problem - and this is probably true for a ton of their more generic stuff that comes from the same factory in China anyway.

Yes, but:)

Fixing it is far from trivial, BUT there are trivial things that would help. It's the 80/20 rule again; sure, a full solution would take years and be a massive undertaking, but even a minor effort would make a big dent in the problem.

Meanwhile, those counterfeits allow Amazon to fulfill orders more quickly and to list items at lower cost, undermining their competition, and any bad experience a customer has can be blamed on the vendor, not Amazon itself.

Of course, I could be wrong, and I have no particular insight, but to me this seems like an intentional part of Amazon's business model.

At the moment it might be negligible but in the long run they are hurting them self. 5 years ago I and a lot of my friends ordered everything on Amazon because it was fast and we knew that we will get the correct stuff.

Nowadays I (and most of my friends) almost stopped using Amazon because it is such a hassle to find stuff which is actually sold and shipped by Amazon and not some sketchy third party seller with only 5 reviews. And even if you manage to order something directly through Amazon you might still have problems with counterfeit items and other stuff.

And the same is true for my parents and their friends. Until 1-2 years ago Amazon was _the_ place to shop online but nowadays they switched back to more traditional methods.

Due to all this shady stuff Amazon lost me as a customer (who used to spend hundreds and thousands of euros per year).

I trust Target's supply chain about 100x more than Amazon and I'm willing to pay extra for that assurance.

As a fairly heavy Amazon customer for both home & biz, I was getting to the point where Amazon was just the default buying location, but now there are entire categories of stuff that are such a PITA to find a valid offering that Amazon is just about off my list.

Amazon recently keeps showing me a popup about a Biz account for some benefits, and while I probably would have jumped at it 2 years ago, I just haven't bothered now.

Yes, it's mere anecdote, but I'm seeing many complaints of the same. This is the kind of problem that doesn't show up in the numbers early, and by the time it shows up in the numbers to get Mgt's attention, it may be too late, because the reputational damage has been done.

Years to build trust, minutes to break it...

I flat out won't buy from Amazon unless I'm already in the market to get something that I know is cheap and may or may not work- which turns out is not very often. Because of this I very much doubt the reality of the retail apocalypse in the long term.

Personally, I think amazon needs to distance themselves from those third party sellers; if it's hard to tell the difference between amazon and joe rando, the amazon brand is going to become worth significantly less, and they will not be able to charge the premium that I'm sure their investors are expecting.

Or you could say that Amazon is highlighting the comparative lack of quality of branded goods. A Lacoste shirt is so easy to replicate at a fraction of the cost, that Amazon, by its very nature undermines the entire rationale for buying Lacoste.

No doubt a fake Lacoste would disintegrate in a fraction of the time of a genuine shirt.

Know what's ridiculous? I trust Poundland more than I trust Amazon to supply genuine goods.

Such a statement has no grounds to stand on. There are non-genuine items which are of the same or better quality than the genuine ones. You cannot just put them all in one bin.

Amazon do, that's the problem.

As you provide no citations either, your assertion seems to have no more grounds. The chances of counterfeit being better quality are so vanishingly rare as to be headline worthy.

I've even used their expertise as evidence that AI and machine learning could do the same if we only knew how to train it. They've written several books on the subject and they are recognized authorities in Asia.

And so does Alibaba, except for it is in China and is outside of US IP enforcement regime. If Amazon were not to do a great pivot towards 3rd party sellers back in 2012-2014 and do the same thing Alibaba does, we could have been talking about Alibaba swallowing Amazon's online retail business by now. Alibaba is a type of company you can do nothing about, yet it can do a lot of things about you, and I can throw a couple examples for you:

Paypal - they used to have a "partner agreement" with Alibaba, but the moment they began to carve into eBay's domain, Paypal's board was foolish enough to antagonise them.

Alipay was the result of all of above, as well as Paypal's almost complete loss of Chinese market, and few others where Alipay made inroads.

Apple - they had pretty much to bribe Alibaba along with Sony to have their products delisted and prohibit trade in refurbished electronics on their platform (which was also eating into Apple's sales big big time).

Also, Alibaba strongarmed Apple into letting them send payments and selling virtual goods without paying "Apple tax." Knowing that, Tencent and few other big Chinese dotcoms followed the suit, which gave them enormous commercial advantage against foreign competitors for in-app payments.

And all of above is on a minute scale of societal impact in comparison how Aliexpress singlehandedly nuked a big big chunk of the brick and store retail industry in the former bloc countries. (Alibaba makes more profit in Russia than in all other foreign markets combined)

Maybe you're talking about a different kind of shirt, but I tried Amazon's brand of collared long-sleeve button-up shirts and found the quality so low that I'd consider them unwearable.

The material was very thin, extremely wrinkle-prone, the collars were wilted and didn't keep their shape at all, and the cut wasn't very good.

I'm not the type to be easily fooled by marketing/branding psychological tricks, quite the opposite. But every off-brand collared shirt I've ever bought in my life has been a cheap unwearable disheveled mess.

I know designer brands are just cranking these things out of Cambodia for $3/unit, but no-name brands still just can't seem to compete at all on quality. They're not even trying as far as I can tell.

That’s exactly the problem. Brands can be held accountable. Unbranded goods can’t. Me personally, I don’t want to live in a world, where all standards are given up just to have the lowest price.

I don't know about Lacoste, but of the brands I do know about, they do a pretty good job on their own of undermining that rationale.

"Amazon is rich with the most important resource in asset management: trust. The firm earned the highest reputation ranking in the U.S. in a 2017 Harris Poll. It was ranked as both the most influential and most trusted company in a 2016 survey by SurveyMonkey. It was the only company to land in the top 5 for both categories."

If the above is true, then counterfeit goods are probably not ultimately a significant problem for them.

It's similar to how there are all types of websites running on AWS. Amazon is not responsible for their content.

Amazon is also a merchant on their own market place. I would expect Amazon and other big name merchants to usually sell you genuine products.

Why would one think that?

If the partnership with JP Morgan works, people could direct deposit money into their Amazon account, auto-invest into Amazon funds, and then spend on Amazon ecommerce. In this model, Amazon immediately saves ~2% on credit card transaction fees, a small portion of which could be used to subsidize cheap or 0 cost investments.

Essentially Amazon could vertically integrate the money that will be spent on their products in the future...

you're talking .03% in fees. On a $1Mil investment that's $300 a year.

Guys like Vanguard actually make money on their rebalances because they are so big. And they keep it in-house - avoiding the costs (both explicit and implicit) of outsourcing their flows to other firms. So being large brings economies of scale as well.

EDIT: By "make money" I mean they use their cost-savings to make or beat the benchmark

i thought vendor creditcard fees are 2-3%? that would come out at $20-30k for each $1Mil

I really hope Amazon doesn't start the investment service in the way described in the article.

That might be true for a small percent of HackerNews readers that are also Daringfireball readers - but the world at large still trusts Amazon; that's the whole point of the article, really.

As anecdotal evidence, an Amazon Investment might be the only way to convince me to become a Prime member (if that'd be a required precondition). I'd almost certainly use it, if allowed.

Unless you're paying close attention, it's not obvious to the average consumer that so many products are being sold by independent resellers vs Amazon themselves, so people aren't as careful as they might be on, say, eBay.

But... I just don't see how amazon would get me away, say, from vanguard. There are already good retail brokerages, and I don't see why I'd want to go through amazon instead of another company.

A. Going global: a lot of those "good retail brokers" are US-only. Sometimes it's dumb - I already have an ETrade account & signed all the paperwork including stuff relevant for my foreigner status... But ETrade will only let me trade my employer's stock, nothing else.

B. Bundle stuff that others can't match - e.g. Prime

C. One account, with good actual security (few appreciate that but some will)

D. Maybe new financial products that others can't match (I think Amazon is in a position where they might pull that off)

but B? I don't see why I want to bundle my stocks with my television series. And, I'm not sure Amazon has security that is any better than Vanguard.

[1] E.g. they obviously run stuff on AWS: http://www.vanguardjobs.com/job/7980466/ts03-cloud-architect...

As for Amazon, I would expect them to eventually expand globally if they were to offer such services (which is not what I expect from most US brokers).

Find a market where margins are large ("your margin is my opportunity"). Bring a simple, easy competitor to the market and aim for zero profit. Grow wildly. Build related products that either your customers want (and go elsewhere for) or else you are currently spending money on. Repeat until billionaire.

Anyone with some capital, industry-specific knowledge and a bit of courage can try this strategy. It won't always succeed. But the point is that waiting for Bezos or Musk or some other behemoth to solve all the world's problems rather than doing it ourselves is a very poor way to live.

The issue is that the labor demand in this country (VCs, corporations, angels, basically anyone with money) would much rather prefer to spend $120,000 on one "really good" programmer than say $30,000 total on a team of 3 young and hungry programmers.

Something something, "adding programmers = adding delays and complexity to a project". And maybe it's true.

But the result is that the one amazing programmer lives lavishly, and the other 3 starve.

And what is worse, there's no guarantee the project will succeed, no matter who you hire.

You would work more than 2x full time hours on any idea proposed by some VC for ~$2.25/hour? And you think there is an availability of competent "young and hungry" programmers who would do the same? And the lack of availability of this arrangement is causing these young hungry programmers to starve?

Is this entire comment some kind of joke or satire that went over my head?

I would rather work for $10,000 with a chance at more responsibility and future promotions than not work at all.

Additionally, where I am currently, $10,000 would more than pay for food and rent and internet!

I graduated from a "top ranked" university, UNC Chapel Hill, with a degree in History. Because I knew a thing or two about computers, I got a job as a sales engineer (demonstrate and configure a hw/sw product for a customer) at one of the traditional IT corporations (HP, Dell, Cisco, Oracle, etc).

After 4 years, I was laid off due to extremely political management taking ownership of my manager's organization. This is common knowledge.

I was making about $55,000 a year, with some commission and bonuses. This again is typical for the industry.

I tried quite hard to get a job right back in the same line of work, but was unable to. If you look at unemployment statistics, unemployment is actually growing in the IT industry. Perhaps I am just bad at interviewing, or don't have good connections to get around this process.

The only other work I am qualified to do is retail management at about $45,000 a year. After taxes and living expenses in the North East USA, this is not exactly a profitable undertaking.

However! If I am able to do data entry, or basic web/game programming (think things that don't require "Senior" or "MA/PHD preferred), for $10,000 a year, remotely from my rural property, then I would be more than happy to do this. If I could have a small portion of equity, then great. My expenses would be more than covered, because I wouldn't have to pay city rent or commuting or etc.

If you are willing to work 90 hrs/wk for $10k salary, why not take a regular 40 hr/wk job for $10k salary (or more even, why limit yourself?), and spend the other 50 hours doing whatever you were going to do?

There are plenty of $10k/yr 40-hour-work-week jobs that don't require any mental load after you clock out, and don't pretend like you won't get anything done in those 50 remaining hours. If you can't build anything with 50 hr/wk to use (which is more than enough for a regular full time job), it seems unreasonable to assume that somehow adding more time would solve the problem.

This assumes we take you at your word that you can be productive for 90 hours, and that you live or are willing to move to a country where $10k/year clock-in-clock-out-and-forget-about-it-work can be found relatively easily.

Right now, my friends and I are unemployed. We would love to be able to work on any project where someone believes in us. $10,000 is more than enough to cover food, rent, internet, etc where we live. And if there is a chance at future promotions and additional responsibility for a bump in pay, then great!

Right now, I would rather work hard and gain connections who trust me as a worker, than not work at all. I am working on my side projects, but those aren't profitable, are still in dev, and generally I haven't found an employer or investor who is interested in the project or translatable skills

(That said, I like the idea of always selecting the top 1% of fund customers and allowing them to offer their own funds)

You go to Amazon, you type in "best AA batteries", and what you get back is not a raw list of battery serial numbers or technical specifications about battery performance (which is basically what you get in the existing brokerage experience, describing funds and their performance). What you get on Amazon is plain-english descriptions, reviews and ratings, and a sorted order of relevance or price or whatever. All these things smooth out the buying experience, reducing any possible source of friction for your purchase decision (hell, you can subscribe-and-save for new batteries every 6 months, thereby precluding ever having to make a purchase decision ever again); they want to make it as easy and natural and automatic as possible, for you to click Buy. But for investments, customers face a huge upfront barrier in terms of lack of knowledge and uncertainty, before they can make a purchasing decision; sure, all the raw information is there, but only highly motivated customers (relatively speaking) are going to dig through it or overcome it before transacting.

Now, I'm not saying that Amazon should add customer reviews of ETFs or funds or whatever ("5 stars: I bought VTSAX and made $43.26, and you can too!"), but it can certainly do a whole heck of a lot to reduce the friction of making a transaction. The point is, the customer shouldn't have to do any work (or as little as humanly possible), before clicking the Buy/Sell button.

And sure, the existing financial institutions can work on this same problem, but this is a actually not their biggest problem. Their biggest problem, is convincing customers to even think about them and take a look at their offerings, in the first place. 70+% of American households have Prime; how many have brokerage accounts? Some Googling around puts this at ~14% ([1] DOL 2015 report says 17 million households had brokerage accounts in 2013, DOWN from 19 million in 2001; total there's roughly 120 million total households in America). Also remember, this 14% of households is split amongst all the competing brokerage firms, while the 70% of households is ALL Amazon's.

All the brokerage ads I see, are targeted towards traders or people who want to become traders; this makes sense for those firms, because why would someone who has no interest in trading, ever use their brokerage? But this is narrow-minded and ultimately self-limiting thinking, and this is not at all how Amazon thinks. EVERYONE is an Amazon customer (or potential customer); once you're on the platform, figuring out exactly what to sell and how to sell it to you is easy. Prime is a huge economic engine/pool of consumers, at which Amazon could throw just about any product at, at any time. Some will stick, some will fail, but even those that fail can be recycled and improved and retried.

Everyone else is fighting over their shares of gold, while Amazon is working to create/feed the golden goose instead. Strategy over tactics.

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[1] https://www.dol.gov/sites/default/files/ebsa/researchers/ana...

I see some comments view this as a far-fetched idea. Maybe that's why its a good one....

RobinHood, the stock trading app, didn't exist 5 years ago. Now you trade for free - challenging a dozen well-known incumbent platforms like Schwab, Fidelity, etc... Luckily, these big guys offer more than just stock-trading. Imagine, zero fee trading with a fund-management platform as described by OP - I think it would crush the competition.

1. <x> Advisor: Retail investors are moving rapidly to passive tracking instruments such as ETFs, <x> can help educate investors on how to allocate their funds to this asset class based on individual risk/reward profiles. <x> can make better sense of all the data available and become the 'ultimate' robo-advisor.

2. <x> One View: <x> is in position to own account aggregation and build up an incredible view into the spending/saving habits of the general population in the developed world. Initiatives such as PSD2 in Europe will help fuel the growth in aggregation in the next few years. Going forward beyond simple read-only aggregation,combined with <x> Advisor and write-APIs to to financial institutions, <x> can allocate my funds to the best products across multiple different institutions in real-time.

3.<x> Bank: With my investments taken care of through <x> Advisor and One View whats left is a utilitarian bank account to manage my free cash flow on a daily basis. Something practical and highly functional without the fuss that offers features such as peer-to-peer FX swapping at mid rates when I go on holiday. This is where <x> could create the challenger bank people have been anticipating.

> Jeff Bezos’ disdain for Wall Street is well known

Is it? Bezos got his business education on Wall Street at D.E. Shaw. What is known about his having "disdain" for that industry? Is this just a botched reference to his strategy of ploughing profits back into company growth?

Short term question is whether Walmart will survive, I hope they do much as I despise the company. Amazon needs competitors. Longer term is will it be Alibaba vs Amazon worldwide? Interesting times...

Why do you think they wouldn't survive? $15B in free cash flow versus $46B in debt makes bankruptcy a virtual impossibility.

I'm sorry, but what? I don't even trust Amazon to deliver eclipse glasses that aren't counterfeit, and I know most of my friends/family feel the same way at this point.

The only thing I trust them to deliver is streaming video at this point.

I think it's several things are going on. First, this new breed of companies is highly eutrepreneurial and competant. Maybe it's youth. Maybe it's the fact that they emerged recently as winners from a high competition dynamic... If Google or Amazon declare they will now be running schools, I'd be a lot more interested than if Unilever or Shell did the same. I know we're concerned about their power, size, monopoly power & vested intertest in the anti-privacy camp, but credit is still due... I think.

Second is the power of ....power. The modern economy is top heavy. Most markets are structurally hard to break into. "Normal people" can't just start company doing banking, insuring, medicines, transport, tobacco, energy, gambling. There are upstart-hostile rules, locking out new and/or small players or structural reasons preventing small players.

"Can't" is strong. Uber started a transport company. But, there are structural and regulatory reasons that make most large markets much more closed than search engines and online shopping. There is no chance for a thousand entrants, with winners emerging from a wide field. This leaves the field open almost exclusively to large companies running lower risk gambles.

Third.. third is financing. Financing has changed in ways that I don't understand well enought to express concisely. There is a lot of financing available these days, via "back-channels." The less formal sectors like VC and (much bigger) corporate lending.

Think of what california's VC & angel complex does. It is, in many ways, the heart of the startup ecosystem. Promising founders get to take big chances without liability. This makes it possible to start a Google or an Uber.

How would SV look if founders had personal liability, like regular small business people? How would it look if they were limited to bootstrapping? Startup financing is an exception, and a relatively small one. Elsewhere on earth, finance is a much more closed shop. You have to be an insider of some sort.

Financing is (to quote Buffet) *resource allocation.

Take for example, "leveraged buyouts" and similar arrangements. Leveraged buyout means that I get a loan from you to buy company X, which then owes you repayment. Some form of this is how Russia's oligarch system came to be. It's how a lot (most) private sales of comapnies happen. It's how infrastructure companies happen. Mining.

I don't quite understand it. The big risks are go to the financer, but the profits don't. Regardless, the structure exists and being big is a prerequisite.

This is the umpteenth thread where commenters are complaining about the sad state of Amazon’s retail. I hear a constant stream of complaints about counterfeit goods, fake reviews, less than great pricing, and shipping that takes longer than promised. I’ve personally experienced all of the above and cut way back on Amazon.

How many companies thrive while the quality of their core business withers?

Of course, maybe retail isn’t their core. Maybe the core is providing barely acceptable products and services at razor thin margins. In that light asset management makes perfect sense.