Quote:
Originally Posted by Rizla
Are you serious? I'm not sure.
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You did notice the sarcastic smiley, right?
The straight answer is that without robots, Amazon's fullfillment business just can't scale to the $200-500B a year size their 25% annual growth promises. And most of that growth is coming from their merchant fullfillment services, not the highly visible direct consumer sales.
Look at the size of Wal-Mart's infrastructure investment in stores and personnel and compare it (where possible) to Amazon. WalMart moves $500B of merchandise a year and employs 2.2 million people. Amazon is moving $75-100B with 136,000 employees. And they pay higher entry level wages. Odds are, Amazon can scale to half of WalMart's volume with a tenth the staff. With robots they get a 5x staff productivity multiplier. (Not due solely to the robots--digutal products and services are another part of the equation, but the robots are important.)
Amazon needs the robots to keep staffing costs from exploding and capping their growth while there is still room in the market for them to grow.
Plus, it reduces their exposure to populist union pressure.
With less employees per unit of merchandise, they can easily afford to pay 50% above minimum wage (with added benefits) to their entry level employees. Which they do. So if the minimum wage increases or if the "living wage" activists win, Amazon is still covered.
It's just Bezos being Bezos: people complained about the nature of the job, so he changed the nature of the job, improved the company's growth potential and competitive positioning, *and* reduced their exposure to political pressure.
Business, 21st century style.
It's interesting to watch folks like that work around obstacles; everybody expects them to zig and instead they zag... and make it pay off.
Edit: check these out:
http://www.nytimes.com/2014/12/01/bu...=tw-share&_r=1
http://www.theguardian.com/money/201...ing-for-amazon