Why Amazon will (and should) put Performance Bike out of business

[torquer]

Originally Posted by froze

... in other words...money, money, money flowing into the winning city which is why there is a bidding war going on because those cities know they stand to make a mint.

Cities don't "make a mint." Politicians get to attend groundbreakings and ribbon cuttings, and, if things work out, go on to either higher office or lucrative lobbying or consulting gigs, leaving someone else to worry about balancing the books (or, just as likely, kicking that can down the road.)
Another poster replied (sarcastically) "But... Big business is bad ." Business is business, and will maximize its profits any way that doesn't land leadership in jail. (And that's quite a ways, judging from recent history. But I digress...)
The real problem with this HQ deal, IMO, is the expected rush of candidate cities to shower Amazon with offers of money from the public coffers (and that included foregone tax revenue) while the benefits are entirely speculative, and we can't even agree how to account for them. What guarantees are being offered by Amazon? Ask the folks in Harrisburg about all those great jobs at the Foxconn plant.
I brought up the NFL because every analysis of economic benefits from new stadiums (save those commissioned by the sports leagues themselves) show trivial post-construction job gains at best. Bids to host the Olympics depend on similar creative accounting. Amazon isn't that bad AFAIK, but I would still keep my hand on my wallet when someone offers money, money, money.

[cmg]

Here's what happened when Amazon moved to Schertz Tx https://www.sacurrent.com/sanantonio...nt?oid=2246759 "The City of Schertz paid $7.6 million in subsidies to the mega-corporation in order to secure the 1.26 million-square-foot warehouse that will bring “good job[s] in a durable, growing industry” according to a recent speech from President Obama, delivered at an Amazon fulfillment center (company lingo for ‘warehouse’) in Tennessee. Later in the article, Amazon isn’t coming to Schertz to uplift Texas workers; it is coming here to exploit them." Many companies providing these so-called “middle-class” jobs have used the economic recession as an excuse to cut wages, which led to them realizing record profits. According to the National Employment Law Project, most of the jobs lost since 2008 paid between $13.53 and $20.66 an hour while the majority of the jobs gained in the same period paid between $7.51 and $13.52. Not as happy place to work as they would like you to believe.

[froze]

Originally Posted by torquer

Cities don't "make a mint." Politicians get to attend groundbreakings and ribbon cuttings, and, if things work out, go on to either higher office or lucrative lobbying or consulting gigs, leaving someone else to worry about balancing the books (or, just as likely, kicking that can down the road.)
Another poster replied (sarcastically) "But... Big business is bad ." Business is business, and will maximize its profits any way that doesn't land leadership in jail. (And that's quite a ways, judging from recent history. But I digress...)
The real problem with this HQ deal, IMO, is the expected rush of candidate cities to shower Amazon with offers of money from the public coffers (and that included foregone tax revenue) while the benefits are entirely speculative, and we can't even agree how to account for them. What guarantees are being offered by Amazon? Ask the folks in Harrisburg about all those great jobs at the Foxconn plant.
I brought up the NFL because every analysis of economic benefits from new stadiums (save those commissioned by the sports leagues themselves) show trivial post-construction job gains at best. Bids to host the Olympics depend on similar creative accounting. Amazon isn't that bad AFAIK, but I would still keep my hand on my wallet when someone offers money, money, money.

The problem with NFL is that those fancy hundred million dollar stadiums are built on the backs of taxpayers who live in the city where the stadium is! NFL, like all sports, should be paid strictly and only by either donations from non profits, and or from ticket buyers, and or from promotions, and or the junk they sell, etc. Why do taxpayers pay for these stadiums is beyond me, this would be like if Walmart wanted to build a superstore they get the city to give them the money to build it and it would be paid by the taxpayers; it should be like any other commercial enterprise, it succeeds or fails on it's own.

The city does make a substantial amount of money on these deals, more than you think, but that all goes into city building projects, police, etc, the only way that money goes into politicians pockets of the city is if they vote themselves a raise. However the city does have special interest groups that get winning bids on projects, and those contractors will make money. So a lot of that money you don't see because it's absorbed by the infrastructure which when a big tax windfall comes to the city the city finds ways to spend the money as fast as it comes in so it appears nothing is being spent on city projects, the city might add more cops to the payroll, improve the sewer system, etc.

Where I live the city lost International Company who decided to move to the outskirts of Chicago, and the city lost quite a bit of money.

[pbarry]

Denver is doing fine without the addition of 50k mediocre jobs. The average new Amazon employee will struggle to find an affordable starter home, and will have to hunt for reasonable rent on their salary. Our unemployment is at a record low, so more people will move here to fill the void(?), if everything comes together. I hope the Mayor/City Council/et al who have sway don't cave on any expectations or demands the big A might have.

[Davist]

Originally Posted by deechee

Uh, isn't Netflix's video service in house? OpenConnect? I believe a lot of analytics and user info is stored in AWS, but not the actual streaming. That said I have to say, it's not just the retail side which is predatory. Read the reviews on glassdoor. Talk to employees; unless you're single, people in my age range are working crazy long hours to keep their managers happy.
.

Netflix has no in house data centers, after a failure some years ago, they outsourced everything.. Part of the content is handled through "edge" colocation data centers closer to customers for latency/resiliency reasons, the "business critical" is all on AWS.

Agreed it's not a nice place to work, I had them as a customer, and the churn of 3 global directors for "commodity" sourcing (electrical infrastructure) in 18 months was bad..

As to %age, AWS still says they do 100%, independent sites say "most" (2 versions of the story below):

https://aws.amazon.com/solutions/case-studies/netflix/

https://aws.amazon.com/solutions/case-studies/netflix/

[froze]

Originally Posted by pbarry

Denver is doing fine without the addition of 50k mediocre jobs. The average new Amazon employee will struggle to find an affordable starter home, and will have to hunt for reasonable rent on their salary. Our unemployment is at a record low, so more people will move here to fill the void(?), if everything comes together. I hope the Mayor/City Council/et al who have sway don't cave on any expectations or demands the big A might have.

Well if all that you said is true then why would Denver be lobbying for Amazon to come? It would seem to me with that low unemployment that Denver has they would just stay out of the process and let a more needy city get it the jobs, like Detroit! Just to name one of many cities ruined after years of democrat mayors.

[r_mutt]

Performance Bike = Starbucks (corporate)

i prefer the local small business bike shop. there are no Performance Bikes here but plenty of local shops with lot's of character. i went to a Performance in Ca years ago and it was so Walmart-esque feeling. no thanks!

[froze]

Originally Posted by r_mutt

Performance Bike = Starbucks (corporate)

i prefer the local small business bike shop. there are no Performance Bikes here but plenty of local shops with lot's of character. i went to a Performance in Ca years ago and it was so Walmart-esque feeling. no thanks!

There are some good reasons to go to a LBS, and some don't mind paying more money for the same stuff they could have gotten at an online store, and all of that is fine if that's what you want to do, but I'm a business man, I'm always buying things at the best price I can find because spending more than necessary is a waste of money, please note this is my opinion.

But when I go to an LBS and see their selection of tires like Vittoria Rubino Pro III tires for $95 but find them on line for $24 it doesn't take a genius to figure out which place I'm going to go to get those tires, most places have free shipping but even if I pay for shipping for those tires it will cost $12 to ship a pair, and now with taxes there will be an additional $3.36 for the pair, so the total cost will be $63.36 for a pair vs $203.30 for a pair plus taxes at the LBS, so sorry if I sound stupid to you but I would rather save $139 plus dollars!

That is just one of thousands examples I can show. At my LBS the lowest costing socks they have is $12 for a pair, not a big deal but I needed 3 pairs which would have ran $36 plus tax brings it to $38.52, I got 3 pairs from Performance for $16 which included tax and shipping. Personally I think cycling sock prices are rip off no matter what, but that's the sport we're in.

That doesn't mean I never buy from an LBS, I get about 90% of my purchases on line, occasionally I need something right now, or the price difference is so small it's just more convenient to get it at the LBS, but on most items I can save at least 30% (even after including shipping and taxes) by getting my cycling stuff on line.

I don't buy everything from Performance or Nashbar (they are the same company now), but probably about 50% goes through them the rest is scattered out amoung other companies. I always get stuff on sale or usually closeouts which the LBS's in my town never reduce prices even on closeouts by more than 10% off retail, whereas on line I can get up to 75% off their already lower prices than an LBS.

It just makes good sense to me, being a business man, to get my stuff where I can find it the cheapest. What I do isn't unlike what corporations do! Yup, it's the same reason corporations went to China to get their crap made because they could save money and make bigger profits, so I do basically the same thing, find the lowest prices and save money which leaves more money in my bank account to spend on other things...on sale of course! LOL!

By the way, Performance is not like Walmart, Walmart will sell the cheapest thing they can get, they won't sell, for example only, Vittoria rubino Pro III tires, they'll sell Bell tires which no LBS in their right mind would carry and nor does any on line store including Performance, Performance only carries name brand stuff except for their own line of things. So no, Performance isn't even close to being like a Walmart.

[Gsinill]

Originally Posted by r_mutt

Performance Bike = Starbucks (corporate)

i prefer the local small business bike shop. there are no Performance Bikes here but plenty of local shops with lot's of character. i went to a Performance in Ca years ago and it was so Walmart-esque feeling. no thanks!

Problem is that most LBS are not much different from PB, besides the size and maybe the atmosphere of the store.
It's limited knowledge and a focus on products that doesn't work for me, neither with PB nor with most LBS.
Just walk into the average LBS and ask whether they will cold set a steel frame or try to buy a set of Campagnolo UT BB cups...

[r_mutt]

Perhaps I'm spoiled here in NYC. There are more than a few shops with excellent selection and knowledge (for the most part). As for prices, yes, we all know where to shop when we're are being price conscious, but I've never felt the need to shop online at PB. There are other online avenues with the same or much better prices with a great selection.


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[froze]

Originally Posted by Gsinill

Problem is that most LBS are not much different from PB, besides the size and maybe the atmosphere of the store.
It's limited knowledge and a focus on products that doesn't work for me, neither with PB nor with most LBS.
Just walk into the average LBS and ask whether they will cold set a steel frame or try to buy a set of Campagnolo UT BB cups...

Agreed, most LBS's hire in our area seasonal employees that are college students and they learn as they go which means they don't ever learn much before they quit. Our largest LBS does have two guys that have been there for over 9 years and they seem to know more than a normal LBS. Some places do have very top notch people working, I really liked the Team Action Sports in Bakersfield Ca, they always had the right information and Kerry Ryan was always on hand if you needed something more; in all the places I lived or been to I never came across a better place then Team Action Sports, not saying their the best in the US, I said they were the best of all the places I lived or had been to.

[fiamme red]

From an op-ed by Richard Florida in today's Daily News:

...Across the country, states, cities and counties give away tens of billions of dollars in incentives to entice companies to move into their jurisdictions every year.

My own research shows that there is virtually no association between these economic development initiatives and any measure of economic performance. They are not associated with higher wages, greater shares of knowledge workers or lower unemployment rates. The broad body of evidence suggests that they do not even cause companies to choose certain locations over others.

Companies typically know exactly where they want to locate in advance. Then, they pick a few other prospective locations and pit them against one another so they can extract the best deal.

As often as not, companies would have located where they did without any incentives at all, so the net result is simply to shrink the localities’ tax bases.

Even worse, since smaller cities are often the most willing to deal, the places that can least afford it are paying the most and getting very little in return...

[weisan]

Originally Posted by fiamme red

From an op-ed by Richard Florida in today's Daily News:

Good insight. Sounds logical.

[Elefantino]

Originally Posted by r_mutt

Performance Bike = Starbucks (corporate)

i prefer the local small business bike shop. there are no Performance Bikes here but plenty of local shops with lot's of character. i went to a Performance in Ca years ago and it was so Walmart-esque feeling. no thanks!

Years ago?

I ate spinach once years ago and got sick.

[jwd]

Performance is sort of like the Guitar Center of bike shops. I usually prefer to go to a LBS, but once in a while there will be a sale that makes it worth while. It's not my favorite place, but I hope they stick around.

This year I've seen 3 local bike shops in my area close. I'm trying to spend $ at the ones that are still open. Even if it's something small like tools, tubes, bartape, etc.