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by nickff 550 days ago
I don't understand how you got down from 7% down to 1.6%. I think you are not counting COGS as an expense, and that's where the error comes from. If your assumptions are otherwise correct, I think you'd get roughly a 7% increase in prices to sustain the 20% bump in wage expense.
1 comments
vel0city 550 days ago
I am including COGS in this; that's the retail price minus the markup. The markup is all the rest of Amazon's costs, of which I agree wages for workers are probably somewhere around 30%ish.

Are you suggesting the warehouse worker's benefits and pay is really 25-50%+ of the final purchase price of the good?? That'd be an extraordinarily high amount of cost.

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nickff 550 days ago
Yes, though I am including delivery and support staff with warehouse workers (basically everyone who is working 'on the floor'). More than half of their employees are categorized as "laborers and helpers", and there are a number of other categories that seem similar. https://assets.aboutamazon.com/64/79/d3746ef14fd99cc6be94532... (I only found this after your latest comment).

The largest categories of employees tend to dominate most companies' cost structures. I would like to run some numbers to see what the likely distribution is here, but the annual filings are quite sparse (in terms of income statement details), and I don't have the time to do an extensive analysis.

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vel0city 550 days ago
> Online retail North America booked $65.55bn in sales

> Amazon estimates the price of labour, labour-related productivity costs and cost inflation was $2bn in Q3

https://www.theregister.com/2021/10/29/amazon_q3_2021/

It cost $2b-4b in labor to do ~$65.55b in sales. Their labor cost of revenue was 3-6%. Pretty far from 50%, wouldn't you say?

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