Trump vs. Amazon or Trump vs. Bezos?

It isn’t Amazon that Donald Trump hates. It’s The Washington Post and its owner, Jeff Bezos — the world’s richest man, founder and CEO of Amazon, and, quite possibly, the object of Trump’s envy.

The most powerful man in the world vs. Donald Trump

There are many legitimate criticisms that one could levy against Jeff Bezos and Amazon, but the ones that Donald Trump has focused on do not hold up to scrutiny. This is evidence that Trump has spent very little time evaluating Amazon’s actual impact on the world, and, most likely, does not hold genuine concern about Amazon itself.

Trump is going after Amazon as a very public act of revenge against The Washington Post, a completely separate organization that reports things he doesn’t like (also known as “the news”), and the self-made billionaire who connects the two. Jeff Bezos may be perceived as a rival; holding the #1 position on the Forbes list of the world’s billionaires[1] might easily intimidate someone who so commonly conflates self-worth with net-worth and insists on “winning” above all else.

Thanks to our legal system and freedom of the press, Trump can’t hurt The Washington Post for doing its job, try as he might. It is also difficult for him to assault Bezos directly without collateral damage to allies amongst the ultra rich (i.e. via taxation), plus Bezos is not the type to provide Trump the callow satisfaction of a public response and feud. Due to the influence of the Presidency on the stock market, Amazon is the easiest target, and provides extra incentive as an organization that represents a threat to the legacy businesses that businessman Donald Trump and his friends in the real estate sector rely upon.

The Amazon Washington Post

Donald Trump’s ire for The Washington Post and, by association, Bezos and Amazon, has long been known. On the 2016 campaign trail, he promoted a theory that Jeff Bezos bought The Washington Post so that Amazon will have greater political influence, promising that:

“If I become President, oh, do they have problems; they’re gonna have such problems.”

Naturally, Trump followed that statement with a threat to …

“… Open up our libel laws, so, when they write purposely negative, and horrible, and false articles, we can sue them and win lots of money.”

Since The Washington Post is a legitimate, credible news organization that verifies what it prints through principled journalistic procedures, Trump is unable to seek legal recourse against it for publishing articles that he doesn’t like. Perhaps realizing this, he has regularly linked Amazon and The Washington Post in statements and tweets by referring to the latter, incorrectly and propagandistically, as “The Amazon Washington Post,” priming his base for the confrontation that is now unfolding.

The World’s Richest Man vs. The Man Who Plays a Billionaire on TV

Donald Trump wants you to know that he is very, very rich. This is so intrinsic to his self-promoted image that questioning his worth was the only topic that was off limits to comedians at his Comedy Central roast in 2011.[2]

He has also sued a journalist for calling him a millionaire instead of a billionaire.[3] A deposition in that case brought about the revelation that much of Donald Trump’s net worth is derived from the value of the “Trump” brand, which has a worth that he can personally inflate or deflate based on his feelings.

“My net worth fluctuates and it goes up and down with markets and with attitudes and with feelings … Even my own feelings.”

Of course, feelings are not taxable assets, and, since Donald Trump refuses to release his tax returns, as is standard practice for those accepting such a high (the highest) public office, we have no way of verifying the TV billionaire’s true net worth.[4]

Amazon’s humble beginnings.

Jeff Bezos, however, owns a verifiable 16% of Amazon, a company that he founded and grew into one of the world’s biggest, most valuable, most innovative, and well-loved brands.[5] It is well on its way to becoming a trillion dollar company, perhaps the first. If Bezo’s feelings about his brand had an impact on its value, and if he equated money with self-worth, he might very well sue journalists for calling him a mere billionaire and not a trillionaire.

Is Amazon Abusing the U.S. Postal Service?

No. Amazon does rely on USPS for “the last mile” of package delivery for its core e-commerce business, but it pays the same rate for shipments as any bulk shipper does. The reality is that USPS would be in a worse position if Amazon took this business away. Parcel delivery is among the only bright spots in USPS’s recent financial statements as an area of revenue growth.[6]

The exact percentage of USPS parcel delivery attributed to Amazon is not publicly known, but, as America’s leading e-commerce platform, it is safe to say that Amazon provides a significant, reliable source of revenue to the beleaguered organization. Furthermore, USPS’s financial burdens would not be eased if Amazon’s business evaporated, as much of this can be attributed to pension commitments that have grown unwieldy over many decades of operations.

Simply put — if the Postal Service thinks that Amazon is paying too little for their services, the logical recourse is to increase prices, but that means that all bulk shippers would feel the pain.

Is Amazon Dodging Tax Laws?

No. Amazon pays taxes in most states — and all 46 where sales tax exists.[7] There is precedent from the age of mail-order catalogs that businesses are not required to pay taxes in states where they do not possess a physical presence.

In the early days of Amazon, the company did not collect sales tax in most states but, as their business has expanded with more physical operations across the country, they have voluntarily done so, even though it might not be strictly required by the letter of the law. In fact, Amazon has lobbied Congress to have all e-commerce retailers collect state sales tax, which is something that should be recognized and applauded by those in government.

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A legitimate point of contention might be Amazon’s failure to force third-party sellers to collect sales tax. These independent operators use Amazon as a platform for their own businesses, and might comprise half of Amazon’s total e-commerce sales.[8] Since most of these businesses are confined to physical operations in one or few states, the legacy of mail-order catalogs continues to protect them, and it may be unfairly burdensome for Amazon to force these operators to collect taxes when they are not legally obliged to. This is a change that government, not Amazon, needs to make.

Conclusion

Donald Trump’s Twitter tirades have had a negative impact on Amazon’s stock price and, apparently, the wider market, there’s little that he can do to affect actual business operations. If he wants to put forth effort, he can appoint and encourage loyalists throughout government to use whatever resources are available to make things difficult for Amazon wherever and whenever possible. He can also lobby for an antitrust case that is unlikely to produce change, although it would be a burdensome distraction.[9]

Special delivery!

Trump’s soapbox remains his primary and most powerful weapon, but its impact is likely to lessen as investors become accustomed to the fact that it is largely toothless. On top of that, these public outbursts that demonstrate clear bias are likely to make future regulations harder, as we’ve seen already with the “Muslim ban”.[10]

Had Bezos not purchased The Washington Post, it is unlikely that Amazon would be in this predicament today. Of course, it would have been impossible in 2013 to predict that, in just a few years, we would see a President that would be so superficial, vindictive, and irresponsible to unleash the power of his office against Amazon for unflattering articles from an unassociated news organization that happens to share an owner. If The Washington Post becomes part of Amazon Prime’s subscription package, Trump might have a case. Until then, he is reaching, and his self-interested motivations are transparent.

To put things in perspective, Amazon is among the most loved brands in America[11] and Donald Trump is among the most unloved presidents.[12] Those who have embraced the convenience and value of Amazon Prime are unlikely to return to the days of standing in line at stores or waiting a week or more for deliveries out of allegiance to the President’s Twitter feed.

At the same time that Donald Trump promises a return to an idyllic and/or nonexistent yesteryear with “make America great again,” Amazon is actually making America greater every day with unprecedented efficiency, innumerable innovations, new job creation, and substantial contributions to the American economy

Footnotes

  1. The World’s Billionaires
  2. Trump’s Demands for Comedy Central Were Funnier than His Actual Roast
  3. Donald Trump sues writer for calling him millionaire not billionaire
  4. Donald Trump Claims He’s Worth $7 Billion
  5. Jeff Bezos — Forbes
  6. No, the Postal Service isn’t losing a fortune on Amazon
  7. Trump’s misleading jab at Amazon on taxes, USPS, retail
  8. Trump Says Amazon Does ‘Great Damage’ to Retailers
  9. What could Trump do to Amazon?
  10. Trump’s tweets can’t hurt Amazon, but here’s how the government could crack down
  11. Amazon, Google ‘Most Loved’ Brands
  12. How Popular Is Donald Trump?

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A time traveler at the nexus of Media & Innovation, Celebrity & Entertainment, and Content & Commerce. Help me get back … to the future!