Tech Letter Archives - Mad Hedge Fund Trader

A Lesson in Blitzscaling

One of the fastest parts of technology growing at a rapid clip is fintech.

Fintech has taken the world by storm threatening the traditional banks.

Companies such as Square (SQ) and PayPal (PYPL) are great bets to outlast these dinosaurs who have a laser-like focus on technology to move the digital dollars in an efficient and low-cost way.

Another section of the technology movement that has caught my eye morphing by the day is the online food delivery segment that has soaring operating margins aiding Uber on their quest to go public next year.

There have been whispers that Uber could garner a $120 billion valuation dwarfing Chinese tech giant Alibaba’s (BABA) IPO which was the biggest IPO to date at $25 billion.

Uber is following in Amazon’s footsteps executing the “blitzscaling” method to suppress competition.

This strategy involves scaling up as quick as possible and seizing market share before anyone can figure out what happened.

The growth explodes at such speed that investors pile in droves throwing inefficient capital at the business leading the company to make bold bets even though profit is nowhere to be seen.

Blitzscaling has fueled American and Chinese tech to the top of the global tech charts and the trade war is mainly about these two titans jousting for first and second place in a real-time blitzscale battle of epic proportion.

The audacious stabs at new businesses usually end up fizzling out, but the ones that do have the potential to blaze a trail to profitability.

One business that has Uber giving hope of one day returning capital to shareholders is Uber Eats – the online food delivery service.

Total sales of restaurant deliveries will hit 11% of revenue if the current trend continues in 2022 marking a giant shift in consumer attitudes.

No longer are people eating out at restaurants, according to data, younger generations view ordering from an online food delivery platform as a direct substitute.

This mindset is eerily similar to Millennials attitude towards entertainment.

For many, Netflix (NFLX) is considered a better option than attending a movie theatre, and all forms of outdoor entertainment are under direct attack from these online substitutes.

One firm on the forefront of this movement has been Domino’s Pizza (DPZ).

You’d be surprised to find out that over half of the Domino’s Pizza staff are software developers.

They have focused on the customer experience doubling down on their online platform to offer the easiest way to order a pizza.

In 2012, the company was frightened to death that it still took a 25-step process to order a pizza.

By 2016, Domino’s rolled out “zero-click ordering” offering 15 different ways to order their product across many major platforms including Amazon’s Alexa.

This has all led to 60% of sales coming from online and rising.

The consistency, efficiency, and seamless online payment process has all helped Dominoes stock rise over 800% since May 2012 and that is even with this recent brutal sell-off.

Uber is perfectly positioned to take advantage of this new generation of dining in.

In the third quarter, Uber booked $2.1 billion of gross booking volume in their powerful online food delivery service.

The 150% YOY rise makes Uber Eats a force to be reckoned with.

Uber’s investment into e-scooters and bike transportation stems from the potential synergies of online food delivery efficiency.

It’s cheaper to deliver pizzas on a bicycle or anything without an internal combustion engine.

If you ever go to China, the electric powered three-wheel modified tuk-tuk with a storage compartment in the back instead of passenger seating is pervasive.

Often navigating around narrow alleyways is inefficient for a four-wheel automobile, and as Uber sets its sights on being the go-to last mile deliverer of food and whatnot, building out this vibrant transport network is vital to its long-term vision.

In fact, Uber is not an online ride-sharing platform, it will be something grander and its Uber elevate division could showcase Uber’s adaptability by making air transport cheap for the masses.

As soon as the robo-taxi industry gathers steam, Uber will ditch human drivers for self-driving technology saving billions in labor costs.

As it stands, Uber keeps cutting the incentive to drive for them with rates falling to as low as an average of $10 per hour now.

The golden age of being an Uber driver is long gone.

Uber is merely gathering enough data to prepare for the mass roll-out of automated cars that will shuttle passengers from point A to B.

It doesn’t matter that Lyft has gained market share from Uber. Lyft’s market share was in the teens a few years ago and has rocketed to 31% taking advantage of management problems over at Uber to wriggle its way to relevancy.

It does not reveal how poor of a company Uber is, but it demonstrates that Uber’s network is spread over different industries and the sum of the parts is a lot greater than Lyft can fathom.

Lyft is a pure ride-share company and brings in annual revenue that is 4 times less than Uber.

Naturally, Uber loses a lot more money than Lyft because they have so many irons in the fire.

But even a single iron could be a unicorn in its own right.

CEO Dara Khosrowshahi recently talked about its Uber Eats division in glowing terms and emphasized that over 70% of the American population will have access to Uber Eats by the end of next year.

Uber’s position in the American economy as a pure next-generation tech business reverberates with its investors causing Khosrowshahi to brazenly admit that Uber “suffers from having too much opportunity as a company.”

Ultimately, the amped-up growth of the food delivery unit feeds back into its ride-sharing division. These types of synergies from Uber’s massive network effect is what management desires and dovetails nicely together.

In 2018 alone, 40% of Uber Eat’s customers were first-time samplers.

A good portion of these customers have never tried Uber’s ride-sharing service and when they travel for business or leisure, they later adopt the ride-sharing platform leading to more Uber converts.

Uber Freight has enabled truckers to push a button and book a load at an upfront price revolutionizing the process.

The online food delivery service is the place to be right now and it would be worth your while to look at GrubHub (GRUB).

Quarterly sales are growing over 50% and quarterly EPS growth was 61% sequentially for this industry leader.

Profit Margins are in the mid-20% convincingly proving that the food delivery industry will not be relying on razor-thin margins.

Charging diners $5 for delivery and taking a cut from the restaurateurs have been a winning strategy that will resonate further as more diners choose to munch in the cozy confines of their house.

Blitzscaling has led Uber to the online food delivery business and they are pouring resources into it to juice up profits before they go public next year.

The ride-sharing business is a loss-making enterprise as of now, and Uber will need to exhibit additional ingenuity to leverage the existing network to find strong pockets of revenue.

I believe they have the talent on their books to achieve finding these strong pockets making this company an intriguing stock to buy in 2019.

November 20, 2018 - Quote of the Day

Tech Letter

“The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.” – Said Co-Founder of Microsoft Bill Gates

November 19, 2018

Tech Letter

Mad Hedge Technology Letter
November 19, 2018
Fiat Lux

Featured Trade:

(ROKU’S UNASSAILABLE LEAD)
(TIVO), (ROKU), (NFLX), (AMZN), (CHTR), (DISH), (FB), (AAPL), (GOOGL)

Roku’s Unassailable Lead

Tech Letter

Shake off the rust.

That is exactly what management of a fast-growing tech company doesn’t want to hear.

Losing money isn’t fun. And investors only put up with it because of the juicy growth trajectories management promises.

Without the expectations of hard-charging growth, there is no attractive story in a world where investors need stories to rally behind.

Setting the bar astronomically high in the approach to management’s execution and product development will always be, the single most important element in a tech company.

This is the secret recipe for thwarting entropy and rising above the rest.

You might be shocked to find out that most tech firms die a harrowing death, the average Joe wouldn’t know that, with constant headlines glorifying our tech dignitaries.

Just look at the pageantry on display that was Amazon’s (AMZN) quest to find a second headquarter.

According to Apex Marketing, the hoopla that coalesced around Amazon’s year-long search netted Amazon $42 million in free advertising by tracking the absorbed inventory of exposure from print, TV, and online.

Social media traffic by itself rung up $8.6 million of freebies.

These days, tech really does sell itself, and I didn’t even mention the billions in tax breaks Amazon will harvest from their Willy Wonka and the Chocolate Factory style headquarter search.

The only thing I would have changed would have been extending the contest into the second year.

Amazon’s brand is probably the most powerful in the world, and that is not because they are in the business of only selling chocolate bars.

One company that might as well sell chocolate bars and has been stymied by the throes of entropy is TiVo (TIVO).

TiVo was once the darling of the technology world.

It was way back in 1999 when TiVo premiered the digital video recorder (DVR).

It modernized how television was consumed in a blink of an eye.

Broad-based adoption and outstanding product feedback were the beginning of a long love affair with diehard users wooed by the superior functionality of TiVo that allowed customers to record full seasons of television shows, and, the cherry on top, fast-forward briskly through annoying commercials.

The technology was certainly ahead of its time and TiVo had its cake and ate it for years.

The stock price, in turn, responded kindly and TiVo was trading at over $106 in August of 2000 before the dot com crash.

That was the high-water mark and the stock has never performed the same after that.

TiVo’s cataclysmic decline can be traced back to the roots of the late 90’s when a small up and coming tech company called Netflix (NFLX) quickly pivoted from mailing DVD’s to producing proprietary online streaming content.

Arrogant and set in their old ways, TiVo failed to capture the tectonic shift from analog television viewers cutting the cord and migrating towards online streaming services.

Consumer’s viewing habits modernized, and TiVo never developed another game-changing product to counteract the death of a thousand cuts to traditional television and its TiVo box that is still ongoing as I write this.

Like a sitting duck, Charter Communications (CHTR) and Dish Network (DISH) devoured TiVo’s market share in the traditional television segment constructing DVR’s for their own cable service.

And instead of licensing their technology before their enemies could build an in-house substitute, TiVo chose to sue them after the fact, resulting in a one-time payment, but still meant that TiVo was bleeding to death.

Enter Project Griffin.

Netflix (NFLX) spent years developing Project Griffin, an over-the-top (OTT) TV box that would host its future entertainment content and poured a bucket full of capital into the software and hardware of this revolutionary product.

Making the leap of faith from the traditional DVD-by-mail distribution model that would soon be swept into the dustbin of history was an audacious bet that looks even better with each passing year.

This Netflix branded OTT box was specifically manufactured for Netflix’s Watch Instantly video service.

In 2007, Netflix was just week’s away from rolling out the hardware from Project Griffin when CEO of Netflix Reed Hastings decided to trash the project.

His reason was that a branded Netflix box would hinder the software streaming content confining their growth trajectory to only their stand-alone platform.

This would prevent their streaming service to populate on other networks.

To avoid discriminating against certain networks was a genius move allowing Netflix to license digital content to anyone with a broadband connection, and giving them chance to make deals with other companies who had their own box.

It was the defining moment of Netflix that nobody knows about.

Netflix became ubiquitous in many Millennial households and Roku (ROKU) was spun-out literally bestowing new CEO of Roku Anthony Woods with a de-facto company-in-a-box to build on thanks to old boss Reed Hastings.

Woods cut his teeth borrowing TiVo’s technology and developed the digital video recorder (DVR) as the founder of ReplayTV before he joined Netflix and was the team leader of Project Griffin.

Now, he had a golden opportunity dropped into his lap and Woods ran with it.

Woods quickly became aware that hardware wasn’t the future of technology and switched to a digital ad-based platform model allowing any and all streaming services to launch from the Roku box.

No doubt Woods understood the benefits of being an open platform and not playing favorites to certain networks in a landscape where Apple (AAPL), Google (GOOGL), Facebook (FB), and Amazon have made “walled gardens” an important part of their DNA.

Democratizing its platform was in effect what the internet and technology were supposed to be from the onset and Roku has excavated value from this premise by playing nice with everyone.

This also meant scooping up all the ad dollars from everyone too.

At the same time, Wood’s mentor Hastings has rewritten the rules of the media industry parting the sea for Roku to mop up and dominate the OTT box industry with Amazon and Apple trailing behind.

Roku was perfectly positioned with a superior finished product, but also took note of the future and zigged and zagged when they needed to which is why ad sales have surpassed their hardware sales.

By 2021, over 50 million Americans will say adios to cable and satellite TV.

The addressable digital ad market is a growing $80 billion per year market and Roku will have a more than fair shot to secure larger market share.

The rock-solid foundations and handsome growth story are why the Mad Hedge Technology Letter is resolutely bullish on Roku and Netflix.

Roku and Netflix have continued to evolve with the times and TiVo is now desperately attempting to sell the remains of itself before the vultures feast on their corpse.

What is left is a portfolio of IP assets that brought in $826 million in 2017, and they have exited the hardware business entirely halting production of the iconic TiVo box.

Digesting 100% parabolic moves up in the share price is a great problem to have for Roku and Netflix.

These two are set to lead the online streaming universe and stoked by robust momentum to go with it.

The Mad Hedge Technology Letter currently holds a Roku December 2018 $30-$35 in-the-money vertical bull call spread bought at $4.35, and it is just the first of many tech trade alerts that will be connected to the rapidly advancing online streaming industry.

THE FRUITS OF PROJECT GRIFFIN

November 19, 2019 - Quote of the Day

Tech Letter

“Technology will change, will change us, so we should change as well” –Said Chairwoman of the International Monetary Fund (IMF) Christine Lagarde.

November 15, 2018

Tech Letter

Mad Hedge Technology Letter
November 15, 2018
Fiat Lux

Featured Trade:

(AVOID THE HOUSING DATABASE LANDMINES)
(Z), (RDFN)

Avoid the Housing Database Landmines

Tech Letter

Stocks that negatively correlate with higher trending interest rates are on a suicide mission as the Fed gradually raises interest rates because of the robust domestic economy hitting on all cylinders.

That is why I am unequivocally bearish on online real estate database companies Zillow (Z) and Redfin (RDFN).

Invest in these stocks at your peril because the short-term path to accelerated EPS growth and higher revenue growth looks treacherous at best.

The last few months has brought forth a massive contraction in mortgage applications as a lack of affordability cripples home buyers around the country.

Buyers are simply waiving the white flag and giving up home searches unable to digest the potential monthly mortgage payments.

As recent as last week, mortgage applications dropped 4% from the previous week and this is only the tip of the iceberg.

Buyers are holding off pulling the trigger and have concluded that housing is about to peak, or the peak is in view.

Why splurge on a big investment when you can buy a house cheap on the next dip?

The supposed silver lining is that inventory is slightly up but that is largely irrelevant because the inching up stems from a dire shortage of inventory that incited vicious bidding wars in the most sought-after metropolitan areas mainly around the east and west coasts.

This is all bad news for Zillow and Redfin who are the main real estate database firms buyers use to do research on the properties and sellers use to advertise housing-related products.

The more buyers drop out of the market altogether, the fewer eyeballs gravitate towards these platforms creating less traffic volume.

Aptly aware of the pitfalls around this business model, both Redfin and Zillow desperately attempted to evolve and fortify their business model.

They decided to get into the business of selling houses and originating mortgage loans when real estate specialists view short-term housing prices in a precarious situation at best.

Zillow preceded this up by purchasing online mortgage lender, Mortgage Lenders of America, which is a dangerous short-term bet as the loan book could sour if the real estate market is crushed by rising rates.

Buy low and sell high, it seems Zillow understood this the other way around.

One bright note was that Zillow shouldn’t face liquidity problems because the purchase was made in cash for $65 million.

Attempts to corner the real estate advertising market was Zillow’s cash cow, and careening into a high-risk part of the real estate market at the wrong time could turn into a painful write-off.

Both of these companies are chronic loss-markers and if the recession graces our shores earlier than expected, it could stick Zillow and Redfin with a hefty inventory of housing units in a downtrodden market.

Pouring fuel on the flames, turning into a mortgage lender could cannibalize 3^rd party agent business who could decide to pull the plug on their listings and ads from the database completely.

This could be dreadful for Zillow because the main source of revenue is the advertising revenue they rely on from its platform.

In one fell swoop, Zillow effectively damaged both businesses failing to recognize the disconnection of the synergies between them.

I would argue that this could have been a sublime idea if there was no competition and a monopolistic moat would force customers to search on a single platform.

However, these two companies have minimal product differentiation and the risk of starting a pricing war to zero could be in the fold as shoppers will cherry-pick for the best deal depending on the platform since the products are the same.

Fast food outlets have faced this problem in the last few years as their products have been commoditized.

Prematurely rolling out this new strategy could emasculate these companies.

The time is ripe for an outsider with access to cheap capital to easily roll into town and play nice with the independent broker industry promising to protect future broker’s commission and not step onto their turf.

3^rd party brokers would migrate towards this peaceful platform in an instant if they sensed cooperating with Redfin and Zillow hampered business, and it would be game over for Zillow and Redfin in a jiffy.

It would make sense for outliers like Homesnap, Neighborhood Scout, and Realtor.com to summon a batch of capital and surgically target the weakness left gaping open by Zillow and Redfin.

Naturally, investors voted with their wallets and each of these “transformational” moves was met by a cascade of torrential selling in the shares.

As interest rates trend higher, it will automatically ratchet up pressure on these marginal business models.

The coming potential lack of mortgage originations from fewer buying candidates and a slide in internet traffic disrupting ad revenue will quickly erode sales revenue growth.

Zillow is already buying houses from sellers in Denver, Atlanta, Las Vegas and Phoenix with their own capital.

If buyers dry up, Zillow will be on the hook for these houses saddled with a growing inventory of units with a return rate of zero while dealing with a high cost of carry.

All of this shouts lower growth and decelerating revenue.

Management has effectively offered shareholders a difficult path to profits beset by landmines that could potentially blow up a limb or two along the way.

If management stuck with the ad business, they could revisit this risky business at the start of the new cycle with the tailwind of low-interest rates and lower house prices.

Patience is a virtue, and nobody told Zillow’s and Redfin’s management.

That is exactly the type of tech company not to invest in even though Zillow’s 22% sales revenue growth is not bad.

I commend management for seeking fresh levers to stoke growth, but this was a badly calibrated commitment that will cast a pall over its operations for the next few years.

As predicted, these companies blew up its future guidance which is a sign of things to come.

Redfin reduced guidance for profits on the home selling unit by 80%.

Not only did they pull back guidance for the new division, but the core advertising unit was hit with a mild reset in guidance.

Elevated execution risk effectively moving forward to this back end of the economic cycle could turn out to be a genius move. But until management can prove this move could gain traction, investors need to abstain from taking risks with this potential catastrophe.

My bet is that this will end in tears.

Zillow is a far stronger company than Redfin with stronger revenue accumulation while boasting higher revenue growth. But when the industry fundamentals are dictating the weak price action, it’s a great time to sit on the sidelines.

Avoid Zillow and Redfin, the boat is sinking and unfortunately this time, the tide won’t raise all boats and say hello to margin capitulation while you’re at it.

November 15, 2018 - Quote of the Day

Tech Letter

“Facebook used to be a place people felt good going to.” – Said Founder of DoubleLine Capital Jeffrey Gundlach

November 14, 2018

Tech Letter

Mad Hedge Technology Letter
November 14, 2018
Fiat Lux

Featured Trade:

(I NAILED IT)
(AMZN), (GOOGL), (FDX), (UPS), (JCP)

I Nailed It

Tech Letter

It’s Washington D.C.

That’s what I thought two months ago when I guessed where Amazon (AMZN) would place their new headquarter, please click here to read the story.

It all makes sense and Founder and CEO of Amazon Jeff Bezos clearly has a lot of sense.

Why would you build a second headquarter far away from the home away from home Bezos purchased in the posh Kalorama neighborhood of Washington DC for $23 million in 2016?

The reason Softbank’s CEO Masayoshi Son bought the most expensive home in California was because he hates staying in hotels.

Men of this ilk are beyond hotels and have the resources to recreate a Taj Mahal to recharge their batteries in.

Hotels fail to deliver the same comforting effect, and perpetually feeling like an outsider isn’t the environment that breeds success or high-level inspiration.

Divine inspiration fuels earth-changing ideas to these visionaries.

Bezos’ estate was already the biggest home in Washington DC before he commenced a $12 million expansion last year.

With his wife MacKenzie, the couple has targeted the use of the home for socializing with the global elite just a stone’s throw away from the White House.

The 27,000 square feet reconfigured to wine and dine is about to be the hottest party ticket in Washington.

It’s ideal timing for Amazon as regulation could have gnarly teeth like Dracula and it is entirely logical to place yourself a degree of separation from Capitol Hill to put out any potential legislative fires.

Bezos’s 11^th hour decision flipped the script somewhat as he decided to split the headquarter between New York.

The abundance of big data possessed by the richest man in America indicated that finding the necessary technical talent would be a big ask for one place and bifurcating the operation into two would ensure streamlined execution of recruiting the best talent on earth.

Unsurprisingly, Bezos pinpointed New York as the lucky sub-winner and Bezos’s other house is conveniently located in Central Park West purchased in 1999 for $7.7 million from former Sony Music executive Tommy Mottola.

Washington DC and New York were always going to be the first two choices because places like Nashville and Atlanta are bereft of the amount of talent Amazon needs to fill these headquarters up with.

The more than $2 billion in tax incentives from state and local governments is a nice bonus too.

As a side note, Amazon announced a new “Operations Center of Excellence” in downtown Nashville and will fill it up with 5,000 employees, meaning they approved of some of these smaller cities, but not at the grand scale Amazon’s ambitious expansion requires.

It is a consolation prize that is still quite a reward as second-tier cities augment its attempt to morph into legitimate regional tech hubs.

Amazon also threw a bone to the local governments allowing them to brace for a tsunami of gentrification and an affordability crisis at a slower pace.

Real estate prices, standard of living, upheaval of the local lower class, and quality of jobs are about to explode in Long Island, New York and Crystal City, Virginia.

On the back of the Amazon news, Google announced its intentions to expand its New York headcount by up to 14,000.

Consequently, New York real estate and its crumbling infrastructure effectively receive no reprieve from an onslaught of tech capital, high-income jobs, and gentrification about to shower down on its urban core.

The most powerful American tech players have essentially given smaller American cities the middle finger.

This could have the unintended effect of exacerbating income inequality and social division that have been at the forefront of this 10-year economic recovery.

That is basically why Bezos absolutely needs to be in the middle of Washington D.C.

He wants to cut off the snakes of Medusa before his brainchild is venomously bitten.

Make no mistake, one of Amazon’s unintended effects is massive job loss in the retail sector that has caused companies like Sears, Toy “R” Us to shutter and has set up JC Penny (JCP) for a TKO.

What does my crystal ball say next?

Amazon’s gargantuan expansion has its sights set on one thing – the domestic logistics industry.

Bezos wants to become totally vertically integrated to control every movement of the supply chain.

That is his end goal, and nothing will stop him.

To carry this out, he needs headquarters on both coasts and in megacities that can execute his strategic plan to algorithmic precision.

Amazon death star’s next casualties are his logistics competitors FedEx (FDX), UPS (UPS), and the United States Post Service.

They have been a weakness in Amazon’s next-gen supply chain for years.

These services are constantly underperforming, slow to modernize, and worst of all charge too much for their service.

The access to cheap capital and superior talent base means Amazon’s next Christmas list of an in-house logistical service could be plausible.

It certainly would solve the backbiting of the administration criticizing Amazon for manipulating the post service. That argument is nullified if Amazon goes totally in-house which in all likelihood was the premise and roadmap for creating two new headquarters.

Amazon needs to snatch enough delivery capacity to marry it up with the rapid growth of their e-commerce division as Amazon secures a bigger market share of retail sales.

Amazon has already bitten off 50% of domestic e-commerce sales and rising fast.

You don’t need the data in your face, I can tell you right here that USPS, FedEx, and UPS cannot deliver this extra capacity at the low costs Amazon desires.

While building their new logistics arm, they will still be reliant on these current legacy offerings but will start to divert deliveries into their own in-house options as they quickly come on line.

This game plan mirrors the strategy for Amazon Basics brand that learns to crawl before it walks from 3^rd party sellers.

Amazon absorbs enough to build a comparable product for half the price then sticks it up at the top of their own website’s product search magically relegating the competition down the product search page.

If you think Amazon doesn’t copy other’s ideas, then you are mistaken. They learn what they can then apply the massive swath of data to do the same for cheaper and with better execution.

Amazon is already in the testing phase for the new Amazon delivery program offering rates that are 50% cheaper than UPS.

This pilot program is being tested in the Los Angeles area and could be a material benefit to 3^rd party seller’s cash flow.

One of my favorite Jeff Bezos quotes is “your margin is my opportunity,” and he is set to roll out the same playbook on UPS and FedEx.

FedEx and UPS cannot compete when Amazon is taking a calculative loss delivering products with an in-house service that is focused on grabbing market share and not extracting profits.

Amazon has one priority and that is the end customers who receive their shiny Amazon packages at the front door with an ear to ear smile.

They couldn't care less about the logistics providers they work with and I can guarantee you that upper management has made dominating logistics a focal point of the next step of expansion.

The optics test certainly proves my point as every time I go into a United States post office, the service is slow, inefficient, and coated with a transparent disregard for performance.

Even worse, there are usually two or three customers complaining about misplaced packages off to the side looking to find a manager who is out on a perpetual lunch break. Such is the state of the USPS for better or worse.

Amazon has also introduced its own Amazon-branded delivery vans that partner companies can lease, and the testing phase is swiftly accumulating enough data for Amazon to feel they can go forward with wide-scale adoption.

Management will never vocally concede that they are about to wipe out FedEx, UPS, and the USPS. As usual, the focus is laser-like on the end customer with Amazon management explaining that “to support growth, we went back to our roots to share the opportunity with small- and medium-sized businesses.”

Offering best in class service with unbeatable prices is the formula for customer retention. Amazon knows this, and they don’t care who they wipe the floor with on the way to achieve their ultimate mandate.