Alpha

Discover

BusinessFeb 5, 2024

Amazon’s Bezos Once Said Customer Service Was Priceless. His Successor Has Put A Price On Customer Satisfaction.

Corporate Pivot

Noah Weidner

Go Deeper

Related stories

media rights

FIFA Is Bringing World Cup Rights Back To Market

Semiconductor

Apple Expands US Manufacturing Footprint in Multiyear Broadcom Pact

retail sector

Why Major Retailers Are Slashing Food Costs

Electric Vehicle

Fiat Targets Niche US Market With New Electric Topolino

airline

Airlines Capitalize on Changing Traveler Habits

Amazon (NASDAQ:AMZN) founder Jeff Bezos amassed a multi-billion dollar fortune through a 40-year “obsession” with building the most customer-friendly product in the world. But since he retired in 2021, Bezos has moved on to new obsessions, and under new CEO Andy Jassy, the e-commerce giant’s customer satisfaction has plummeted as it shifted its priorities to profits over people.

Past its prime: Amazon’s platform has seen an exodus of high-quality retailers such as Ikea and Macy’s — replacing them with cheaper, lower-quality products from obscure overseas brands paying Amazon for promotion. Customers hate the changes, but they’ve been lucrative for Amazon.

One study says that Amazon charged merchants up to 50% in fees for transactions and fulfillment in 2022 — pushing its Marketplace revenue higher by 20% year-over-year (YoY) in Q4 2023.
The company reportedly changed its search results page to steer customers toward advertised products — sending its ad services revenue up 27% YoY.

Amazon’s diminishing returns

Customers initially coming for the company’s free shipping often stayed for Prime’s additional benefits. But since 2018, the subscription price has risen from $99 to $139, ads are being shown on Prime Video (which can be removed for a fee), and the company continues cutting back on features.

Buyers claim that customer service has been largely automated — with fees and restocking charges added to product returns.
Making matters worse, Amazon has watered down its free video and music streaming platforms and raised delivery minimums on grocery delivery services.

Plan B(ezos): has surged ~66% over the last year, and now Bezos plans to cash out 50M shares (~$8.6B) this year. The upcoming antitrust inquiry or a potential ruling could hold Amazon accountable for the safety of the goods it sells. There’s also speculation about the noticeable decline in quality since Bezos’s departure — or maybe he just needs to fund his $500M mega yacht.