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If I spend $100 on Amazon, How Much Goes into Jeff Bezos' Pocket? I know much of it goes to China, but how much am I donating to the Beez?

If I spend $100 on Amazon, How Much Goes into Jeff Bezos' Pocket? I know much of it goes to China, but how much am I donating to the Beez?

(post is archived)

[–] 7 pts

Does it matter how much he gets? Stop using amazon.

[–] 10 pts

Easy to say. Harder to do, especially when items cannot be found locally, or only at WalMart, which is the same as Amazon.

[–] 4 pts

Don't shop at big box stores, in 99% of cases it's easy to find any item available elsewhere.

[–] 2 pts

And that is how I end up standing in a 45 minute line for one of two cashiers in some cheap shit hobby/home decoration store with the wife, and the shower I skipped because we were just getting a few things at the grocery store before we decided to stop at this place and a few others leaves me smelling my balls for about 8 hours.

[–] 2 pts

If you order an item it typically comes from a 3rd party amazon seller. An item sold on Amazon will be charged a seller fee, if its inbounded to Amazon to be fulfilled instead of the seller, while the seller no longer has to bite individual shipping costs they have to pay a fee on each unit, a monthly storage fee for each SKU in "FBA" along with a hefty fee for use of service per month. All in all, Amazon makes it's money from Prime, Prime Video, fees, fees, more fees and every pissant 3rd party Amazon seller that uses their services.. Basically fuck Amazon

[–] 0 pt

They also provide lending options to 3rd party sellers that they make FAT interest on.-

[–] [deleted] 6 pts

$150

[–] 2 pts

Ha. Yeah, I forgot to figure in how much Beez gets from renting his servers to the CIA.

[–] 3 pts

I'm sure it depends on the items.

But what do you really need to buy that you can't source elsewhere?

[–] 0 pt (edited )

Well, for instance, I just bought a microwave oven. I wanted the older model, which was sold out everywhere else. But sellers still had it available on Amazon. It is worth shopping around though. I found a scanner that was $60 CHEAPER on a non-Amazon site. Free Amazon shipping is often a deciding factor. And easier returns.

[–] 3 pts

Assuming Bezo's salary is very small (typical for founders) ... As such, his net worth is directly tied to the Amazon stock price (+whatever non-Amazon assets he holds.) Difficult to use a straight revenue calculation because his net worth isn't directly tied to revenue.

Here is what you have to do:

  1. You need to calculate what % of Amazon is owned by Bezos.
  2. You need to calculate what the change in total annual Amazon revenue is with your $100.
  3. Assuming a constant long run P/E ratio (all market fluctuation ignored), you then apply this P/E ratio to the % change in revenue as calculated in #2.
  4. You now know how much your purchase impacted the Amazon stock price (#3), and then you can back out the Bezos question with the % found in #1.

The calculations are left to the casual observer.

The proof of this theorem is beyond the scope of this text.

(Alternatively)

The proof of this theorem is left as an exercise to the reader.

Flashbacks of undergrad

[–] 1 pt (edited )

From my understanding, Bezos makes most of his money from stock valuation. Amazon doesn't pay taxes because they spend (reinvest) it into the business as fast as they get it. he sells stock from time to time to maintain his lifestyle. he gets about $1 per day as salary.

"During the tenure of Bezos as Amazon CEO, he has been paid just over $80k per year in base salary. In addition, the founder received $1 in security fees and travel expenses for business. There are 6 million people. As a result, Bezos takes home about $1 per day between his base salary and other compensations. Every year, they spend $7 millio"......

Based on his 1998 salary, his base salary remains $81,840. Additionally, he receives $1,681,840 in compensation on top of his salary. Based on these figures, the monthly amount works out to $140,153, $32,343, a week, $4,608, a day, or $192 per hour. It takes about 20 seconds.

[–] [deleted] 1 pt (edited )

He only owns about 10% of Amazon. So, he'd get about 13 cents.

[–] 1 pt

It is highly variable. If the $100 item you buy gives amazon a mere $5 profit margin, considering Jeff's 11% ownership of the company (amount of stock he has), you are talking at a MAXIMUM of $0.55. Most tech products have a pretty low profit margin, for example. I'm sure stuff from the big guys, like Samsung et. Al, give them very little profit, if any profit for that matter. The $599 Google Pixel 6 phone also costs $599 on Google's website. Why would Google sell Amazon the phone for under $599 for them to sell at $599, when they would prefer you buy it direct from them? Google is either providing them at cost and Amazon makes $0 profit, or they have some contractual financial agreement to list on Amazon. Amazon's (among other stores) business model has always been to get you hooked on their site and get you buying in volume, and also paying for various digital services, like Amazon Prime.

A great example is CostCo. Their profit margins on all the stuff they sell is extremely low. All the money they make is from their membership fee business model. Check out this old 2019 thread about their revenues: https://twitter.com/investing_city/status/1179974257779982336. Part 9: "Membership fees only make up about 2% of sales but normally a little bit more than 100% of profit."

It is exactly what Amazon is doing with their prime model. Price authority. Sell at cost or even at a loss, goad people into paying $120 (now $140) per year for the right to get your shit fast.

Now, of course Amazon is not CostCo just selling physical goods. They have a digital services division (prime video, kindle, etc.), they have a web services division (AWS is pretty much the top dog for cloud services, among other things), there's the twitch division. But you are more interested in how your purchase at Amazon goes into Bezos' pocket. So you really only care what percentage of the profit makes up the profit from sales. It is very possible (I dont feel like doing the research to figure it out) that next to nothing goes in his pocket from your mere $100 sale. More than likely the profit margin is low, and that tiny bit of profit is part of a HUGE VOLUME of profit from sales in the billions.

[–] 1 pt

Not sure, but I was shopping for a mouse recently and found one I wanted on Newegg. 25$ but a month until they could deliver. Best buy had the same mouse for 40 dollars. And Amazon had the mouse for 23 dollars and could deliver next day. With that kind of ability you will never get people to stop using Amazon.

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