No. DON’T Smile.

[Note: This post was published in similar form in the Chronicle of Philanthropy December 15, 2015.]

The other day a nonprofit organization I admire sent out a Facebook posting that encouraged its supporters to shop at Amazon and to designate their organization as the charitable beneficiary of “Amazon Smile.” Through Amazon Smile, the charity explained, Amazon would give the organization ½ of 1% of the total purchase price of whatever I buy.

This is not the first pitch I’ve gotten from nonprofits about Amazon Smile, and it surely won’t be the last. I’ve heard many people say, “You’re spending the money anyway. Why not have a portion go to a charity you care about?” But what struck me this time was that the nonprofit suggesting buying from Amazon was an organization whose mission was to promote community economic development – and it seemed to me that Amazon would be more of a natural adversary than a collaborator. I began to think about other nonprofits. Should they also pause before diving into a relationship with Amazon? Should we ask ourselves if we really are “spending that money anyway,” at least at Amazon? Is this arrangement really a cost-free charitable donation?

Central to analyzing these questions is gaining an understanding of the corporation itself. Nonprofits certainly don’t want to align themselves with a bad actor. So what to make of Amazon? Well, as an Irish friend of mine would put it, Amazon is not exactly an angel of mercy. First of all, they have very questionable (some would say unquestionably bad) labor practices. A February 2014 article by Simon Head in Salon describes a ruthless culture where warehouse workers are subjected to minute oversight in the name of efficiency (many workers have to wear chips so their supervisors can track their every movement within the warehouse), with extremely demanding quotas for the number of items picked off the shelves and shipped each hour. Apparently the quotas are ratcheted up as workers gain experience, and those who can’t keep up – usually the older or less physically strong employees – are summarily fired.

And the working conditions sound at times Dickensian. The most startling investigative piece about Amazon’s labor practices appeared in 2011 in the Allentown (Penn.) Morning Call. The reporter, Spencer Soper, describes the heat in the local Amazon warehouse being so intense in the summertime (the heat index was regularly over 100) that the local rescue squad kept an ambulance on call at the facility. During heat waves, there were as many as 15 employees passed out in a single day from heat exhaustion. Amazon reportedly refused to open the garage bays to let in fresh air, for fear of theft.

As for its responsibility as a corporate citizen, for almost two decades Amazon adamantly refused to collect state and local sales taxes on purchases. As Michael Mazerov of the Center on Budget and Policy Priorities wrote in 2010, Amazon claimed that it didn’t have facilities in most states, and thus had no obligation to collect sales taxes. But at that point Amazon had major facilities in 17 states that had sales taxes, and it only collected sales tax in four of those states – and of course it had customers in all 50 states. This refusal by the nation’s largest online retailer to collect taxes deprived state and local governments of critical revenue for schools and other vital services (including maintaining the roads over which the Amazon deliveries are made), while providing Amazon with a significant price advantage over the poor schnooks who run bricks-and-mortar retail operations and dutifully collect sales taxes.

Amazon claimed that it was far too complex to keep track of all the local tax rates, but that’s hogwash. A company of Amazon’s technological sophistication can easily track the tax rates across the country. In fact, it already does, charging sales taxes for other companies that use their system – but Amazon doesn’t do it for purchases at Amazon itself. As Mazerov wrote, “The fact that Amazon charges sales tax in connection with other companies’ sales but not its own suggests that Amazon’s primary goal is exploiting its price advantage.” That’s putting it rather diplomatically.

Last year Amazon did an about-face, declaring that they now supported the Marketplace Fairness Act, which would require online retailers to collect sales taxes. Analysts note that this now makes business sense for Amazon because: a) its biggest business priority is to offer one-day delivery, which means having fulfillment centers in more and more states; b) its biggest competition is increasingly with other online retailers, who would be subject to the same tax collection; and c) Amazon (more than its competition) has the wherewithal to manage the technical aspects of collecting taxes, so it’s now actually a competitive advantage to require all online companies to collect sales taxes. Of course, Amazon for the most part is still not collecting sales taxes until all of this gets worked through. They are positioning themselves as the good guys, while continuing their old ways.

Meanwhile, Amazon is ruthless in dealing with suppliers and competitors. It famously forces vendors to cut their prices, as seen in the only recently resolved dispute with Hachette Book Group, and it openly wants to put bricks-and-mortar stores out of business – even while shamelessly using those same stores to showcase its products. A cynical example of how this works: Amazon markets an app whereby the consumer can scan the bar code at local stores and then order the same item (presumably for a lower price) directly from Amazon. Amazon has on occasion even offered a 5% discount for those who do this sort of parasitic shopping. Can you understand why the local store owner may resent Amazon? Or, more precisely, revile Amazon? (For more details, here’s a convincing graphic about how Amazon, well, became Amazon.)

We might dismiss this as capitalism being capitalism, and we can assert that Amazon is simply using “disruptive technology” to change how markets operate. But when Amazon so badly mistreats its employees, when it competes so unfairly with traditional retailers, when its refusal to collect taxes deprives local and state governments of revenues, and when its practices contribute to hollowed-out downtowns and bankrupt local business owners, is this really a company we should support?

More to the point, is this the kind of corporation with which you want to align your nonprofit and for whom you want to provide free advertising? Because buying through Amazon is not inevitable – it’s a choice. And if you give your supporters a moral excuse for supporting an immoral corporation, are you serving your mission or simply chasing a few bucks?

And the bucks, by the way, are very few. Say you are fairly successful in getting your supporters to put your organization down as the beneficiary of Amazon Smile. Let’s say that over the holidays they purchase $25,000 worth of goods from Amazon – purchases that otherwise would have been made at local stores that your neighbors own and where taxpaying members of your community work. That $25,000 would have been a lot of income for those local stores, perhaps the difference between survival and closure, or keeping staff members or firing them. But you’ve thrown your lot in with Amazon. And in return you will get a kick-back of… $125. Yes, that’s all that ½ of 1% of $25,000 amounts to.

Is it worth it?

Copyright Alan Cantor 2014. All rights reserved.

Share this: Facebooktwittergoogle_plusredditlinkedintumblrmailFacebooktwittergoogle_plusredditlinkedintumblrmail

36 thoughts on “No. DON’T Smile.”

  1. Thanks, Alan. Your insights are spot on, as usual. This post brought to mind the Buy Less Crap (http://www.buylesscrap.org/) initiative which was inspired by the RED global endeavor to increase giving through consumption. There is something about these mega businesses co-opting charitable endeavors to increase sales that is offensive. Makes me grimace instead of smile.

    1. Thank you, Jane. Yes, this is all part of the same give-by-buying strategy that corporations have taken on, and that’s described so well in Mara Einstein’s Compassion, Inc.. I do like the notion of Amazon Grimace. You may be on to something there!

  2. Thanks, Al–once again, you have articulated so clearly what I have been mushily thinking (and you’ve done the research, too!) Reverend Billy and the Stop Shopping Choir have been in my thoughts this season: http://www.revbilly.com/–Happy holidaze! Proud that my extended family has decided to forego gifts completely this year, asking one and all to contribute to a Heifer International gift from us all. Viva the culture of philanthropy!

    1. I’d been mushily uncomfortable with Amazon Smile, too, Mary Beth, until I spent some time thinking about it and could put some meat on the bones. It helped to have a conversation with a friend who owns a terrific independent bookstore. Thanks for weighing in, and good for you and your family to do Heifer for Christmas! A fine choice!

  3. Al,
    Got me thinking. The other impact or consequence on the nonprofit world is the ousting of a robust set of local donors, as brick and mortar business evaporate.

  4. I have been pointing this out for some time to many of the non-profits that send me those Smile links. And I may be incorrect, or it may have changed, but I believe the minimum payout was $500 from Amazon. So you’d have to push a lot of sales their way for that.

    1. Thanks, Andrea. Glad this resonated with you. I think, though, that you overstated how much the minimum payout is from Amazon. According to Mara Einstein (next comment down), a professor of marketing at Queens College, the minimum payout is actually $5. But that requires $1,000 in Amazon Smile purchases. Certainly some of that money will never be distributed, and all of it will sit and earn interest for Amazon in the meantime.

  5. Al,

    This piece is right on the money. In fact, I had a similar conversation with a reporter from the Seattle Times last week: http://seattletimes.com/html/businesstechnology/2025149820_amazonsmilexml.html.

    Couple of additional thoughts coming out of that conversation:
    1) In letting consumers “decide,” they demonstrate that they really don’t care about any charity.
    2) They support charities on both sides of an issue (pro- and anti-gun, pro- and anti-abortion).
    3) Since the donation is so small, they don’t distribute checks until a charity has at least $5 owed. This means people have to spend $1000 before a check is sent. My guess is that Amazon earns interest on the funds in the meantime.

    1. Thank you for weighing in, Mara! (For readers who don’t know Mara Einstein, she literally wrote the book on the problems inherent in cause-related marketing, Compassion, Inc..

      That’s a very good piece from the Seattle Times — I recommend it! — and your points here are excellent.

      I’ll add that there are studies that show that when people “give” through programs like Amazon Smile, they are less inclined to give outright gifts to charity. Yet another strike against this structure!

  6. I respectfully disagree. Amazon has been a revolutionary force in online sales and distributions. Online retailers overall have been pushing back on collecting sales tax in states in which they have no physical presence. The internet and online sales have been an evolving marketplace where Govt regulation is slowly catching up with the new realities of digital commerce. Amazons battle with Hachette and other book distributors has been in the interest of getting lower prices for the consumers. Amazon was the lone company pushing back on the distributors, while the primary distributors colluded with Apple to artificially set ebook rates at a higher price. CBS Corp’s Simon & Schuster Inc., News Corp.’s HarperCollins Publishers Inc, Penguin, Lagardere SCA’s Hachette Book Group, and Macmillan and Apple were convicted or settled the 2012 case with the Department of Justice.

    The Amazon smile and Amazon affiliate program can be a significant source of income for a non profit. The affiliate program generates up to 8.5% of sales. A local non profit I work with receives thousands from the smile program and another is receiving 80K per quarter with minimal promotion from the Affiliate program. Note: Affiliate program income is not a donation and different tax laws apply

    1. A couple of quibbles on this comment. First, since publishers and the authors who work with them own the copyright for the works they publish, there is no sense in which the prices they set for e-books can be “artificially high.” It’s their price to set. Is the price of a cell phone artificially high? Amazon claims they are advocating for consumers when they squeeze publishers for lower and lower prices, but by an astonishing coincidence, whatever weakens publishers strengthens Amazon in their quest to control all retail on earth.

      Publishers have fixed costs which they must amortize in the early life of a text, be it hardcover or e-book. Bringing out an e-book at $9.99 at the same time the hardcover comes out is a surefire way to kill the publishing business and allow Amazon to be the only game in town. They have already demonstrated that they have no aptitude for publishing, so this would be a disaster. They have no taste. They honestly don’t care about literary merit. They’re just moving units. They’re in the distribution business and the tech business, not the culture business.

      There is a case to be made for a dynamic pricing model in which the price of an e-book would start out high and go steadily down after publication. That is the logic that brings us mass market paperbacks at $7.99, 9 months after the book’s initial release. It’s also a strategy (“windowing”) which Amazon specifically rejected for e-books 5 years ago. They were very clear about it. They wanted to sell their Kindles and so the prices had to start .. well, I have to say “artificially low.”

      The other quibble concerns the so-called collusion between publishers and Apple. Certainly meeting in secret at a NY restaurant betrayed an astounding lack of common sense. But in the end, this was a strange kind of collusion, because the plan they hatched involved themselves making less money and forcing Amazon to take a profit instead of using books as loss leaders, selling them under cost. This was called the agency plan, and it makes perfect sense for e-books. Amazon and other retailers never take physical possession of a digital file. They are simply agents for the owners of the copyright. Therefore the owners of the copyright should be able to set the price and pay the reseller an established percentage of the sale. Amazon acts as if they own the file. In one hilarious situation, they were forced to accede to Macmillan’s pricing because Macmillan “had a monopoly over its product.” Well, um, yes they did. And do.

      1. Not everything published has to have “literary merit.” Everybody should be able to publish whatever they want, as long as it is their own. And I don’t give publishers any credit for merit anyway. How much drivel comes out of the presses every day? How many retreads of Twilight or the Harry Potter ripoffs or Hillary biographies or Michael Savage diatribes does it take to deforest a planet? Those amateurs who don’t bother proofreading, or even READING their own material, or have the decency to hire an editor will be forgotten. How lovely that it will not waste tons of paper to have them eject their failure into the ether. But those authors and researchers and collectors and pundits and rebels and poets who have something interesting to share (whom mainstream publishers send form rejection letters when they don’t detect multimillion-dollar blockbusters) now have a venue to display their contribution.

        As for charities taking advantage of affiliate programs, it is socialist envy to criticize it. Why don’t some local bookstores offer the same deal to such charities. Become a partner with your local schools, and tell them you’ll give them a cut if they send parents to their brick and mortar. Print up coupons that advertise this benefit. Whining about Amazon eating the lunch of 19th Century businesses isn’t going to keep these stores open. They have to adapt to the new age. Offer services that Amazon can’t. Give volume discounts if a school can get parents to place group orders. But I remember the same grousing about Barnes and Noble when they opened a store in my nabe. About a dozen bookstores nearby closed their doors before Barnes even opened! They don’t want to compete, and competition benefits the consumer.

  7. Thanks Al for shedding light on this …I will gladly pass this along to others who may actually be shocked at this information ..

  8. First off I want to point out that I am unaffiliated with Amazon and to the best of my knowledge have no direct or indirect connections to anyone employed by or speaking on behalf of Amazon.
    Having said that I believe Mr. Cantor has a very limited knowledge base on the applications of industry standards utilized within the logistics and supply industry. The article he’s written doesn’t accurately discribe the reality of who and why distribution centers operate they way they do.

    First of all quota systems are utilized by most if not all major distribution networks. The article implies that Amazon is somehow behaving extreme by utalizing a technic that most within the logistics industry are utalizing. Quota systems are used to determin productivity of an employee but they are also used in order to optimize the functionality of the entire organization. To be honest, seconds and minutes count when one looks the big picture. Departure and Arival times, maintenance schedule, inventory control, software updates and so on all are interconnected within this complex system. Compiling seconds and minutes of inefficient time lost on hundred or more employees over several orders within a work period equates to hours or more of delay times for other connected departments. Insisting that a standard be maintained isn’t an egregious act. It’s one based on the simple realization that failure to maintain complex scheduling results in failure to deliver products in a timely fashion. This could spell the doom of any company involved in logistics.

    The writers also gives an air of “big brother is watching” gives an impression that the employer has dubious intentions. The truth is that knowing where when and how fast product is being moved allows other aspects to operate more effectively. A good example is to say “moving product within a software system isn’t the same as moving product in the physical world” knowing where employees are facilitates the effective movement of product within a warehouse. There are many more reasons and I’d be happy to explain those if one would ask.

    Working in a warehouse/distribution center is both physically and envormently demanding. There’s not a single warehouse in the country that this reality isn’t true. Not everyone is suited to do that kind of job. I started my professional career working and such a place and it’s extremely doubtful I could perform the same functions at the same level of performance at twenty years older. I’d also point out that to the best of my knowledge heat waves with temperatures over 100 don’t often occur in PA. Using that story suggests some bias reporting at the least and a complete lack of objectivity at the most.

    The debate over tax collection of items sold via the Internet has been until recently and ongoing debate. This is not one centered around a single corporate entity. It included all companies and entrepreneurs involved in the online sales market. Not making that fact clear is another failure in objectivity. Is the writer implying that it was only wrong that Amazon wasn’t paying taxes and the other companies and individuals not paying taxes were exempt from criticism?

    Lastly on the amounts donated to charity. It’s my understanding that Amazon doesn’t produce the majority of the products they sell. With this in mind theres a window between the purchase price and sales price of the items they sell. Subtracting operational costs such as employee salaries, insurance, taxes ,maintenance costs and so on, would the amount of actual donations reflect these considerations? Given the numbers provided by the writer it seems that this is so. Does the writer expect that a company operate without an expectation of making a profit when it participates in a charitable function?

    I can only conclude the the writer hasn’t taken any time to research the complexity of the logistics industry or the mutpliple challenges it’s faced with each day. I’d hate to think that it would be the alternative; having the knowledge but presenting information in a way that distorts the reality.

    1. Thank you, Sean, for your direct criticism. I put out a strongly opinionated piece, which has (by the standards of my blog) gone viral, with thousands of view a day. I am not surprised that many readers disagree with me, and I welcome your reaction.

      I’m happy to admit that I am not an expert on warehouse distribution systems. I never suggested that I was. I understand that goals need to be met in a timely fashion in a competitive environment. And (as someone who grew up on a family poultry farm) I know that work can be hard, dirty, and physically exhausting.

      But I think there are a multitude of problematic socio-economic trends and priorities that Amazon exemplifies. We all want products, and we want them quicker and cheaper. In the race to reduce costs and to speed delivery some important human values get left behind, including treating workers with respect and fairly sharing the benefits of the company’s success. The article from the Allentown Morning Call struck me as exhaustively researched. Perhaps, as you say, there are not many heat waves in Pennsylvania, but when this one struck, Amazon chose the path of having 15 employees a day get so ill that they were hospitalized, rather than adjusting operations significantly enough to preserve their health. This was a conscious choice to ignore workers’ health in order to maximize profits. Perhaps if I were a manager in that world, dealing with the incentives of that industry, I would have made some of the same choices. But unless we as a society say that we value the welfare of workers over whether a book arrives in one day or two, companies will continue to operate in what I consider an inhumane way. And articles like mine are part of an effort for us to re-think our expectations. You’re right: Amazon is not alone. But they are the biggest, and they make an inviting and deserving target.

      And while the workers suffer, the CEO of Amazon has grown wealthy beyond words. He’s not alone. Thirty years ago the ratio of CEO salaries to that of the average worker was 48:1. Now it’s 331:1. As a citizen of a democracy, I feel not only the right, but the obligation to pressure corporations to reallocate their success. The juxtaposition of the plight of the Amazon warehouse picker with the wealthy-beyond-belief CEO gets under my skin, for sure, but it’s also tearing the fabric of our society. And it’s undermining our economy, as a growing portion of the population does not have the wherewithal to consume and drive economic growth. (It’s also putting enormous pressure on nonprofits and local governments to take care of the working poor. Which brings us back to “do.”)

      Meanwhile, after 33 years working in and with the nonprofit community, I do know a fair amount about charitable giving. I know that nonprofits are in desperate need for income, and that they make choices all the time (not always good ones) about how to raise a dollar. Far too often they go down a rabbit hole that seems like the source of easy money, but really isn’t at all worth the effort, and there is a significant opportunity cost to those mis-steps. I find Amazon Smile a classic example of an ineffective and inefficient get-rich-quick scheme for nonprofits. Charities are using chips with donors to have them register that organization with Amazon Smile. That effort could be far better spent asking for direct gifts. Even if Amazon were a company with an impeccable reputation, I don’t think this kind of scheme is worth the time for staff-strapped nonprofits.

      There is even some evidence (see http://recharity.ca/new-study-stirs-slacktivism-debate/) that people who take no-cost steps to support charity – such as “liking” their Facebook page – are LESS likely to then make a direct donation. The science is still evolving on this phenomenon, but it may well by that by encouraging donors to “give” through Amazon Smile, nonprofits will get less direct support from those folks.

      Finally, let me tell you the incident that inspired me to write this piece. I was shopping on Black Friday at the remarkably vibrant local bookstore here in Concord, New Hampshire. The owner recently tripled the size of the store to bring this modest community a world-class bookstore. But it’s more than a bookstore: it’s a cultural center, with author talks, a vibrant café, and great conversation. And it’s a great place to bring the kids. And so imagine my dismay as I overheard a conversation between a father and son. The two of them were cuddled up on a comfortable chair, reading a children’s book in front of a beautiful picture window looking to the New Hampshire hills. The son said, “Daddy – can we buy this book?” And the father said, “Put it back on the shelf, Billy, and when we get home I’ll order it on Amazon Prime.” That family probably saved a dollar or two by doing that. But when dozens and hundreds and tens of thousands of people do the same thing, what are we losing? I would argue, most of what makes us a community.

  9. I think you have to understand that millions of people already use Amazon and have no interest in their associated bad practices. And although I am now more aware of these issues I probably will not use Amazon less than I have in the past. The fact that they do donate a (small) portion of their income to charity cannot be overlooked. It may not be a lot, but it’s certainly better than nothing.
    I have a friend that would rather die than give to charity and he feels it is irresponsible for Amazon to donate to charities as their historical profits have been so low.
    I say “take the money and run” and give them small credit for donating something.

  10. Thanks for writing this Al. I have read some of what you reported previously, and yet – as someone who would consider herself a progressive in many ways – I continue to do the VAST amount of my shopping on AmazonSmile. And I was an early adopter of online shopping. Why do I shop on Amazon? Simple- I don’t live in an urban or suburban area that is convenient (to my way of thinking) to many stores. The nearest Walmart is a good 15 minute drive, followed by an extreme parking experience in an overly busy plaza parking lot – and is Walmart really any different or better than Amazon? I think not.

    In the past year I went to my local hardware store (an Ace franchise about 5 minutes away) to buy some specific items. They didn’t have what I wanted in either case. I told them that is why I shop online. I have Prime membership and frankly if I need a mop, or am running low on fluoride-free toothpaste, or want vegan vitamins, I can wait the 2 days for it to arrive. That is far better than wasting hours of my precious time looking around pointlessly for something that is not available in a local brick and mortar store.

    Yes Amazon has issues – don’t most corporations in this now almost fully corporate-owned and managed nation? But I have issues too – of time management and a desire for ease and choice in shopping. Finally, one of the best things that Amazon has done for our consumer-driven society as a whole is to lead the way in enabling consumers to tell each other their experiences with products (as described in “The Thank You Economy” by Gary Vanyerchuk), and thus improve both products and the customer experience. So I will continue to shop using AmazonSmile for 90% of my non-food retail purchases, and I will encourage others to do so, too.

    One caveat to the above: I do support local specialty stores when I can, buy at our local farmers’ market when it’s open, buy the great bulk of holiday and special occasion gifts from crafters and artisans I find at local craft shows. So maybe that counts for something in supporting my local economy. But my point is that there are MANY places in this country that do not have easy or convenient access to brick and mortar shopping, and we depend on Amazon and so may as well use AmazonSmile when we shop.

    1. Thanks so much for this, Anita.

      I didn’t write this piece to be a scold. Well, yes, I do want to scold nonprofits that sink a lot of effort into advertising Amazon Smile to their donors. When nonprofits ask donors do one thing (sign up with Amazon Smile), they’re not asking them to do another thing (write the organization a check). My article is as much about nonprofits’ use of their time and their relationship with their donors as the malevolence of Amazon. There’s an opportunity cost. If donors, on their own, sign up for Amazon Smile, that’s up to them, and the nonprofits should calmly cash the check. (Not every check a nonprofit cashes needs to pass a purity test.)

      As for consumer behavior, none of us is pure, and shopping (or not shopping) at Amazon is not a litmus test for goodness and caring. I grew up on a farm in a rural area, so I can relate to your situation. I encourage people to be conscious about their choices. Where we can, and as you say you do, we should buy from locally-owned retail shops. I get very upset (as I mentioned in an earlier comment) at people who shop at the local bookstore, take advantage of the place to leaf through books and to attend authors’ talks, and then go home to order through Amazon to save a couple of bucks. That’s simply short-sighted and selfish and unfair to the store-owners who have invested in the building, staffing, and inventory. You and I shop at farmers’ markets and pay a little more, yes, to get a better, fresher tomato, but also to support the farmer who grew them. We shouldn’t mind paying a small premium to the local stores for bringing these products to our towns and cities.

      Of course, whether we boycott Amazon, buy from Amazon constantly, or are somewhere in between, it’s important to know about Amazon’s business practices. Those packages don’t arrive magically at those low prices. And we should challenge Amazon and pressure it where possible. One clear way to do this is by shopping elsewhere. If a sizable swath of the country were to cut back on their Amazon purchases wherever they could, would Amazon take notice? Absolutely. Would Amazon change its business practices? Perhaps. Would some good local stores survive and keep money circulated in the community? Absolutely.

    1. Ha! Well, you chose the best possible recipient, Ann, and as a trustee emeritus of Mayhew I say thank you! And I frankly think if you shop at Amazon you should go ahead and name a charity. But my point (as I think you understand) is that THE CHARITY ITSELF should not devote its time encouraging its supporters to do that, both because it has much more effective ways of raising money and using its staff members’ time, and because by shilling for Amazon Smile it aligns itself with Amazon and its sometimes challenging ethics and business practices. But thanks for writing, and it’s always good to see the O’Reilly name appear on the screen!

  11. I thought that the % that the charity receives is 5% on the amazon sale? can you explain the 1/2 of the 1%? they advertise 5%, is that misleading?

    1. I wouldn’t dare speak on behalf of Amazon, Beth. But I think there are two different partnerships that they pitch. One, which I’m writing about here, is Amazon Smile. That’s the 1/2 of 1%. Then there’s some kind of agreement where there’s a portal on the partner’s page that leads the user directly to Amazon’s site. For that, there’s a higher commission.

  12. Actually, I had no problem with Amazon purchases not being taxed by the states. In my state, and there are many other states as well, tax revenues are misspent on poorly managed school systems and many other Governmental activities. I’ve heard the same old tired argument before, “the schools just need more money!” Every organization should have to pass performance and efficiency standards to earn revenue dollars. It’s unfortunate this is usually not the case with many municipalities and school systems. It’s like a poorly run mutual fund company urging people to invest more money to improve its performance! Clearly, it’s a systemic issue, not a monetary one.

    1. I’m glad you weighed in, Tom. You articulate a point of view that’s widespread — though it’s one with which I strongly disagree.

      Pure Libertarians think that virtually all government spending is misdirected and takes away from their freedom. Other critics cite governmental waste as a reason to trim or avoid taxes. But to my way of thinking, this is a false either-or position. Certainly, there are inefficiencies in government spending. But if you believe in the need for public safety (police, fire, EMTs), public education, and public roads, which most of us do at a minimum, you recognize that local and state taxes need to be paid. If you want a fire department, you need to pay for the firefighters and their equipment, and that’s done through taxes. A bricks-and-mortar store pays local property taxes, and all its employees pay local and state taxes to support these core services. (They also patronize other stores, renovate their homes, and in all other ways participate in and boost the local economy — not to mention support local charitable organizations.) It’s my opinion that when Amazon or other on-line retailers dodge local and state taxes, they are undermining both core services and the local economy.

  13. Of course, that $25,000 of goods would likely have cost $30,000-35,000 at local merchants, not to mention the many accumulated miles of commuting to gather those purchases (carbon footprint) and the additional hours (days) required vs purchasing online to do so. For those of us who continue to shop through Amazon [and its many affiliate merchants], who have not decided to boycott the company, AND who do not consider the tiny SMILE donation to be a replacement for otherwise giving to charitable organizations, the the model works perfectly. I”m just saying, that there are more variables than you outline in your argument, however well considered.

    Thanks, Paul

  14. Do you support capitalism Alan?

    Then let the market do its job, and stop getting off by feeding your lackluster critique to all your blog subscribers who are just waiting for somebody to tell them what to believe.

    1. Well, James, I do in fact support capitalism, when it serves society. And in my own way, I’m a capitalist, running my own consulting business.

      But here’s the deal: the market does some things very well, and it doesn’t do other things well at all. Where there’s money to be made, the market works. For-profit businesses pursue profits, and in so doing they serve the public by providing goods and services. If I want an avocado in NH in the wintertime, capitalism ensures that the farmer in Mexico grows the avocado, the long-distance trucker drives it, and the supermarket sells it.

      But in other areas, there’s no money to be made in the transaction. That’s where the nonprofit world comes in, and that’s its value. (If you read any of my other pieces, you will understand that I’m a consultant to the nonprofit world, so that’s my area of expertise.) There’s no profit in feeding people who can’t afford to pay for the food, or in educating kids who can’t pay tuition, or providing medical care for poor people. Nonprofits pursue their missions — feeding and healing the poor, educating kids, curing diseases, preserving open spaces, sharing art and history in museums, and everything else (including, yes, teaching entrepreneurship and thereby fueling capitalism). And nonprofits need to raise money in order to do so.

      And I think Amazon Smile is a lousy way for nonprofits to raise money. Nonprofits “use up an ask” by asking their donors to designate them as the beneficiaries of Amazon Smile, and I am convinced that nonprofits would get a lot more from simply going directly to the donors and asking for a donation.

      Marc Gunther, an excellent journalist and observer of the nonprofit scene, recently wrote that the deal is even worse for nonprofits than I assert in this piece. He notes in his post “Why Amazon Smile Doesn’t Make Me Smile” that the purchaser has to navigate over to the Amazon Smile button each and every time he or she buys something, which clearly they don’t most of the time. So the amount coming to charity is tiny. (Do read his piece.)

      As for my larger critique of Amazon as a corporation, well, there’s plenty there to criticize. I do support capitalism, but I prefer my locally owned bookstore that employs 20 or so folks, all of whom live in the community and pay taxes here. And when Amazon uses its power to knock them out of business, well, that hurts my community and damages my way of life. So, frankly, I don’t mind paying a bit more to keep the local bookstore (and all our Main Street shops) thriving. My choice is actually part of the capitalistic model: it’s called consumer choice. I’d rather spend $15 for a book locally than $12 for the same book through Amazon in the same way I’d rather pay $8 for a good hamburger from a local restaurant than $3 for a crappy hamburger from McDonald’s.

      One last point about capitalism: major corporations spend billions to tell us what to believe. They generate demand through commercials and constant marketing. If I put up an alternative view, reaching a tiny fraction of the population and holding their attention for two minutes at most, then I’m vastly out-spent in that effort. And, certainly, if you find my critique “lackluster,” there’s no need for you to read other posts of mine. That said, I have a lot of readers, most of whom presumably find what I say to be of some value.

Leave a Reply

Your email address will not be published. Required fields are marked *