What Amazon’s Inventory Says About the Economy

Comments (6)

  1. Jim Paoletti says:

    Where is the data that Obamacare is costing Americans 3% – 9.5% of their income…….You throw out that lie, then when we click on it, you tell us that raising the minimum wage will help the economy….which is the truth……but what does this have to do with Obamacare.


  2. Bob says:

    Any time goverment mandates prices or wagesit does nothing but wreak havok on the economy.
    When the government reduseces regulation and taxation the economy flourishes.
    What part of funadamentaly transform America didn’t you understand?


  3. Winston says:

    Jim Paoletti does not understand economics, which is painfully true for all Obama voters; otherwise, they would not be supporting Obama’s agenda. Until we destroy the liberal cancer in this country, this nation will continue to spiral out of control. Obama’s economic policies are deliberate and designed to destroy America. You can’t argue otherwise; the results speak for themselves. The bigger problem we true Americans face is we have NO opposition party. 2010 reaped no results with a republican house. We need to ask ourselves, will 2014 and 2016 elections even matter if both parties are corrupt? We need a different plan.


  4. HarryD says:

    The author of this article should be careful to research his stories more carefully! His statement that “And there’s only one reason Amazon would let its inventory dry up… It’s expecting a huge drop-off in consumer spending.” is absolutely false! While it’s possible that the reason provided for the reduced lead times could be correct, there is another major reason that could be the cause. As a retired manager from one of the largest manufacturing companies in America, I can personally testify about the other possible reason.

    From a business stand-point, inventory is essentially money that is setting on a shelf in a warehouse! The more inventory a company has, the more money it has tied-up in a process that is not earning any return-on-investment. Actually, money is being lost because companies either borrow some or all of its money to run its operation, which involves paying interest for same, or it is using some or all of its profits, which means the potential for investing that money is lost. In either case, the larger the inventory, the greater the cost to maintain same. So reducing inventory saves money and/or frees-up profits for investments!

    With Amazon, some individual suppliers ship their product directly to their customers, in which case there is no inventory involved for Amazon. In other cases, the individual suppliers ship their products to Amazon and same becomes inventory. However, the individual suppliers do not get paid by Amazon until that inventory is sold and shipped by Amazon. In these cases Amazon has no money tied-up in inventory. However, Amazon does have inventory-holding costs! The warehouse. The staff. Insurance. and more. Thus smaller inventories typically result in smaller inventory costs!

    To summarize, there is more than one reason to reduce inventory levels and its referred to as smart business. Can the economy be a reason to reduce inventory levels? Absolutely! Can the reduction of inventory levels be the results of cost-saving measures by a company? Absolutely!


  5. bumpkin says:

    HOW can raising the FMW “help” the economy? when the FMW or ANY minimum wage is increased, the business owner has to raise the cost of all their products to PAY for it, costing the purchaser much more than before the raise. If its the FMW, the government has to raise taxes, costing the consumer more to just live. They also have to offer less service to the consumer, say, in benefits. IF you have, for instance, PERS, after the FMW goes up, the packages offered become weaker. IF you have food stamps, when the cost of food goes up, the food stamps do NOT increase, thus effectively reducing the consumer’s buying power. In reality, there REALLY IS NO MORE spending power after ANY “minimum wage” is increased. It merely increases the cost of living. In other words, it doesn’t change the buying power, because you have more cash but the products you have to buy cost more, relative to the raise. What is the difference, pray tell? WHY do it at all? To fake out the stupid?


  6. bumpkin says:

    Winston, and HarryD, you are both correct. And to the Wallstreetdaily folk, one cannot reply to the coments because an error msg pops up saying error: cant find the ‘commentformdiv’ . You MIGHT want to fix that! As a new subscriber, that really annoys me…


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