America's No. 1 financial conglomerate

Chapter 530 Underhanded Tactics

Zero commission, no problem.

Amazon is a follower. Flash sales don't charge merchants any commission yet. Why would Amazon dare to charge them? Wouldn't that make even fewer merchants willing to join Amazon's platform?

Although everyone knows that the inevitable outcome for food delivery platforms is to collect commissions.

By offering subsidies and zero commissions, companies can seize market share and cultivate user habits. Once the market structure stabilizes, they can then achieve a profit loop through commission collection.

Hourly Delivery is like Morgan Stanley, playing the platform model, acting as a bridge between the two.

But as long as flash sales don't set this precedent, no later imitator will dare to start this model ahead of time.

Subsidies are not a problem.

The development trajectory of this battle between food delivery platforms, or rather, the battle in e-commerce, is gradually becoming clear.

Ultimately, it's a protracted subsidy war.

It all comes down to who can outlast whom, who can sustain continuous subsidies for longer, and who can use their stronger financial resources and cost control to wear down their competitors. Whoever can achieve market unification and monopoly will ultimately prevail.

For any platform looking to enter the market, there are essentially only two paths to take. Either keep up with the subsidies offered by flash sales, maintain the core of the competition, and wait for the right opportunity to act.

Either they offer much more substantial subsidies than flash sales, causing flash sales to incur huge additional costs.

If you don't have the determination, then don't enter this industry. It's a waste of money, and you'll only become a victim of market competition.

Blackburn never expected that Bezos would use corporate annuities as a weapon against flash sales.

"If our food delivery business were to expand across the entire United States, employing tens of thousands of riders, do you know how much cost pressure that would put on us?"

Blackburn did a quick calculation and continued, "That's at least a hundred million dollars more in costs per year, maybe even several hundred million dollars."

The United States Social Security, abbreviated as ASI, was established in 1935 during the Roosevelt era and is a mandatory tax system for all citizens.

The social security tax is also fixed, without any different tax brackets; it's all a 12.4% tax rate.

The company pays half, and the individual pays half.

Universal social security does not guarantee a comfortable retirement.

In fact, retirement pensions for retired elderly people in the United States are simply insufficient to support their lives in the country.

Therefore, we see many Americans choosing to settle permanently in Southeast Asian countries after retirement. It's not that they have the leisure time, but rather that they can't make a living in the United States.

Social security pensions are only 40% of their wages, and with rising prices, the amount they receive each month is not much different from that of people on minimum living allowances.

In the United States, it is common to see elderly people still working in service industries such as fast food restaurants, retail stores, and supermarkets.

It's not that I can't sit still, but rather that I'm under economic pressure because I simply can't support myself without working.

By the 1970s and 80s, the entire US pension system was facing collapse.

The government has calculated that in the future, retirees will not be able to receive a pension equal to 40% of their salary, and the government cannot afford even 30% of their salary.

Then, in the 1980s, the United States introduced two more pension plans: corporate annuity plans and individual pension plans.

Personal pensions are quite simple. They are for people who do not have an employer, are not formal employees, or are self-employed. They can be viewed as a pension account paid by an individual, similar to flexible employment insurance.

Corporate annuities, also known as 401k, are essentially personal pension insurance, but they are equivalent to employee insurance.

The general idea is that, in addition to their regular social security contributions, employees contribute an extra 10% of their monthly salary to a pension account set up by the company, while the boss contributes a certain percentage to match it.

Of course, this number is just a rough estimate, and the ratio will vary slightly from company to company. However, the minimum standard is a 50% matching rate, which means that if an employee contributes $1,000, the company will contribute 50% of that $1,000, putting $500 into the 401k account.

The core appeal of the 401k plan lies in its tax benefits. Funds deposited into the account by employees and employers are exempt from personal income tax, and investment returns generated from these funds are also tax-free. Personal income tax is only payable when the employee withdraws funds after retirement, at the applicable tax rate. This deferred tax mechanism not only incentivizes employees to actively accumulate retirement funds but also maximizes the retirement returns of the funds invested in the account.

Even the lowest standard represents an increase in wage expenditures.

This cost pressure is particularly pronounced for labor-intensive enterprises.

Despite Blackburn's concerns, Bezos remained remarkably firm in his stance.

"Now is not the time to worry about wage costs. If Amazon can't survive, everything else is meaningless." Bezos looked directly at Blackburn, his eyes revealing a firm determination. "We have to cause some trouble for Flash Sale. If both sides develop steadily, Amazon simply has no chance."

"How many delivery drivers do we have? At most, we have less than four thousand."

"How many delivery drivers does Flash Sale have? It has exceeded 80,000, which is more than 20 times that of us."

"Once we announce the implementation of the 401k plan, Flash Sale will only have two options: follow suit or not."

"If Flash Sale chooses to follow suit, their additional expenses will be twenty times ours."

Bezos thought of the recent flash delivery service's hourly delivery strategy: "And don't forget, they are aggressively expanding into the food service market and are expected to recruit another 30,000 to 50,000 delivery workers."

"By then, their total number of delivery workers may exceed 12, and the additional costs brought by the 401k plan will increase exponentially."

Bezos then gave a sly smile. "If Flash Sale chooses not to follow the 401k plan, the risks it faces are equally fatal. What will those delivery drivers think?" "When Amazon's delivery drivers can enjoy 401k retirement benefits, while Flash Sale's delivery drivers cannot, won't some experienced delivery drivers switch to our side?"

"Their delivery drivers are all highly experienced, intimately familiar with various routes and delivery scenarios within the city, and are experts at completing delivery tasks in the most efficient way. If these people can join Amazon, it will play a decisive role in shortening our delivery time and improving our service quality."

"As a result, even if Flash Sale hires new delivery personnel, they won't be able to get up to speed quickly. On the other hand, we can leverage these established delivery resources to rapidly close the delivery time gap with Flash Sale."

This was an open strategy, and Blackburn understood it.

But he knew even better that Flash Sale would inevitably follow suit: "They can't possibly abandon these veteran delivery drivers; this isn't just a staff issue."

"Clearly, food delivery is now a crucial part of Flash Sale's business, and the delivery team is the core asset of that business. If a large number of long-term employees leave, it will not only lead to a decline in delivery efficiency and service quality, but also affect user experience and merchant trust."

"Furthermore, if Flashbuy really refuses to pay 401k for its delivery drivers, we can also attack them in the media, which would seriously damage Flashbuy's corporate image."

"The management of Flash Sale couldn't possibly be unaware of this, so they will definitely choose to follow suit."

Bezos didn't care. He pointed to the center of the triangle on the paper and said, "Whether it's zero commission, subsidies, or a 401k, it all boils down to one thing: money."

"To put it bluntly, it's about who has more money and who can afford to lose more."

"If we can't curb the open source of flash sales, then we must think about how to reduce their costs."