[[link removed]]

WE CAN ORGANIZE AMAZON, BUT ONLY IF WE UNDERSTAND IT  
[[link removed]]


 

Stephen Maher and Scott Aquanno, Benjamin Y. Fong and Scott Jenkins
March 10, 2025
Jacobin
[[link removed]]


*
[[link removed]]
*
[[link removed]]
*
*
[[link removed]]

_ Organizing Amazon workers is both an existential challenge and an
opportunity for labor. But the company’s cash advantages and
operational flexibility mean that traditional union tactics won’t be
enough. We need strategies that combine disruption and _

Products are seen on a conveyor belt at an Amazon fulfillment center
where they are being sorted and shipped on November 27, 2023, in
Tampa, Florida. , Octavio Jones / Getty Images

 

Interview by Benjamin Y. Fong and Scott Jenkins
[[link removed]]

If we count Amazon’s roughly 500,000 subcontracted drivers alongside
its 1.5 million employees, this modern corporate behemoth is likely
the largest employer in the country — edging out Walmart, which has
held that designation for three decades
[[link removed]].
It is second only to Walmart in total revenue (a fact that may well
change very soon, too), and it’s got the fourth-largest market cap
($2.47 trillion) after Apple, NVIDIA, and Microsoft.

It’s also a very strange company. It’s a software company, it’s
a retail company, it’s a parcel company. It wants to be everything
for everyone, and its dynamism continues to amaze. Eleven years ago,
it had no outbound transportation capacities. Today, with a gigantic
network of sortation centers [SCs] and delivery stations, it’s
delivering more packages than UPS.

For strategists seeking to organize this always-changing and ruthless
corporation, these facts raise an important question that is quite
difficult to answer: What exactly _is_ Amazon? Why has it been so
successful? Does it benefit from certain unfair conditions? What is
the source of its profitability? Of its dynamism?

In a recent article
[[link removed]] for _Amazon
Worker Solidarity_, “A Prime Competitor: Understanding Amazon’s
Market Power,” Stephen Maher and Scott Aquanno provide some helpful
answers to these questions. Over email, we talked to them about this
article and the broader prospects around organizing Amazon.

Benjamin Y. Fong and Scott Jenkins

You start your recent article for _Amazon Worker Solidarity_ by
rejecting the idea that Amazon is a monopoly. Beyond the fact that the
company does not conform to the classic characteristics of a monopoly,
what is important about this claim? Were you thinking of the FTC
[Federal Trade Commission] complaint
[[link removed]]?
Do you think then that attacking Amazon as a “monopolist” is the
wrong approach?

 

Stephen Maher and Scott Aquanno

Yes, we were partly thinking about the FTC complaint, as well as the
broader political insistence by liberals like Elizabeth Warren that
the way of going after Amazon and supporting workers is through
measures to “break up” the company and “restore
competitiveness.” These approaches actually rely on Friedmanite
assumptions that competition is somehow inherently a good thing for
workers — maximizing efficiency, employment, and consumer
satisfaction through the magic of the market. In fact, such ideas also
have deep roots in American progressivism, going back to the “trust
busters” of the early twentieth century. The problem, as our
analysis of Amazon shows, is that this is absolutely not the case:
competitiveness benefits and empowers capital, reinforcing class
discipline and the exploitation of labor.

Seeing how the forces of competition compel Amazon to continuously
restructure, to innovate technologically, and to intensify the
exploitation of labor is the only way to make sense of what the
company is doing — and points to the necessity for workers to
develop the disruptive capacities, at the necessary scale, to be able
to exert real leverage and fight it. But competition is integral to
capitalism as a system. Thus our analysis also critically highlights
that the problem for workers is not just Amazon — one bad boss, or a
single evil monopoly — but _capitalism_ itself. And it is this
system that workers ultimately have to build the capacity to take on
— which of course implies a broader project than collective
bargaining by one particular group of workers at one particular firm.
Rather, this is inherently a _class_ project.

Benjamin Y. Fong and Scott Jenkins

Another misconception you take on is the idea that Amazon Web Services
[AWS], a highly profitable part of their business, is actually more
important than their logistics operation. Who makes this claim, and
why is it important to emphasize the importance of its logistical
capacities?

Stephen Maher and Scott Aquanno

The claim that AWS is more important than, or separable from,
Amazon’s core logistics operations basically comes from two
quarters. First, an element of the business press has been making the
case that, since the bulk of Amazon’s profits seem to come from AWS
(about 68 percent), Amazon should be split in two, allowing the more
profitable business to stand alone rather than being dragged down by
the significantly lower-margin retail, delivery, and warehousing side
of the business. Such investors would like to get their hands on the
higher profits of AWS, rather than these being used to support
Amazon’s other operations.

The problem for workers is not just Amazon but _capitalism_ itself
— and it is this system that workers ultimately have to build the
capacity to take on.

The second place you see this argument made is among some on the Left
(including Cédric Durand and Yanis Varoufakis) who are now claiming
that Amazon’s involvement in the cloud sector marks a shift to a new
“techno-feudal” mode of production that is distinct from
capitalism. According to this view, Amazon is the paradigmatic example
of a monopolistic firm that extracts rents from consumers for using
space on the “cloud.” The nexus of exploitation in this
techno-feudal mode of production is not production or the labor
process, but rather consumption: we are all paying “rents” to
these techno-feudal firms for using “intangible assets” over which
they have monopoly control.

The techno-feudal argument is basically an extreme reiteration of the
“monopoly capital” thesis that we take on in the paper. As we said
before, this really doesn’t help us understand why Amazon does what
it does. Only if we account for the intensely competitive nature of
Amazon does its strategy make any sense. As we argue in the paper,
competitive disciplines compel Amazon to continuously strive to
compress circulation time and reduce circulation costs, as well as to
produce surplus value, by intensifying the labor process and
increasing labor productivity. As a result, Amazon undertakes
extremely high levels of investment and R&D [research and development]
spending. These dynamics in no way resemble feudalism but are
absolutely typical of capitalist competition.

Moreover, these arguments miss just how integrated AWS is with
Amazon’s logistics operations. For one thing, AWS emerged from the
competitive drive to enhance the efficiency of commodity circulation.
The firm then commodified and sold these capacities as standalone
services, and the high returns and low marginal costs involved
incentivized them to further expand these capacities. But you can’t
just sever AWS from the rest of the firm without potentially damaging
its overall competitiveness. AWS still helps coordinate Amazon’s
highly advanced and flexible logistics network. And of course, Amazon
leverages AWS profits to support its extremely high levels of
investment in its retail and logistics operations, which make up
nearly 85 percent of its net sales.

These dynamics in no way resemble feudalism but are absolutely typical
of capitalist competition.

In fact, this integration is becoming even more important with time.
Far from being the basis for a secure monopoly, Amazon is facing
growing competition in the cloud sector from Microsoft, Google, and
others. As a result, one would expect that margins in this sector will
start to come down with time. Amazon’s strategy for dealing with
this has been to leverage its advanced logistics to maintain its
leadership in the cloud sector, enticing firms using its cloud
services to use its logistics as well: If you like the cloud, why
don’t you also let Amazon manage the back-end of your business?
Indeed, Amazon is currently positioning itself to offer supply-chain
management and third-party logistics services to other large firms.
This means that Amazon’s strategy for maintaining its edge in the
cloud sector is completely bound up with its ability to sustain the
competitiveness of its logistics.

All this matters because it allows us to understand what exactly
Amazon is doing and why it is doing it. But also, and more
importantly, it points to the centrality of labor exploitation to
Amazon’s success — and therefore to the capacity for the workers
whose labor is chiefly responsible for Amazon’s profits and
competitiveness to exert power. If AWS can’t be separated from the
logistics and warehousing operations, then the firm can’t just
divest from the latter as a result of workers’ struggles for better
wages, working conditions, and shop floor power. Workers could
therefore potentially exert real leverage.

Benjamin Y. Fong and Scott Jenkins

In that same longer article, you mention the importance of Amazon’s
cash conversion cycle. For noneconomists, what does this mean, and why
is it important?

 

Stephen Maher and Scott Aquanno

What economists call the cash conversion cycle, or CCC, is an
important part of Amazon’s market strategy. Basically, the CCC
measures the difference between the time, in days, that it takes a
firm to sell inventory and receive payment, on the one hand, and to
pay its bills to suppliers, on the other. The lower the CCC, the
longer a firm holds on to cash after selling its inventory and
receiving payment, but before paying its bills.

A firm can thus reduce its CCC by getting payment faster, selling
inventory faster, delaying payment to its suppliers, or some
combination of these. Typically, a low CCC is interpreted as a sign of
a company’s strength and efficiency, since this translates into a
strong cash position that helps it to pay its obligations, fund its
operations, and pay down debt. This is also an indication of a
firm’s power over its suppliers and sellers, since it means it can
delay or demand payment.

Amazon has among the lowest CCCs of any major corporation. It has
achieved this by maximizing the efficiency of its logistics system,
selling inventory and collecting payment extremely quickly. This rapid
turnover has helped attract a large number of third-party sellers to
sell on Amazon, which make up a large and growing part of its
business. Amazon’s extremely efficient logistics and the reach of
its e-commerce platform has allowed these sellers to benefit from
selling on Amazon even though it delays payments it owes them for a
considerable period of time (and charges fees). Amazon must therefore
sell products very quickly, which allows it to delay payment to its
sellers for a significant period while still offering these firms a
competitive advantage by selling on Amazon.

If AWS can’t be separated from the logistics and warehousing
operations, then the firm can’t just divest from the latter as a
result of workers’ struggles for better wages, working conditions,
and shop floor power.

In fact, at year-end 2023, Amazon posted a CCC of -14.7, as compared
to the retail sector average of +44.9. In the same period, Amazon’s
main competitor, Walmart, posted a CCC of +8.7. This allows Amazon to
acquire as much as $30 billion in interest-free cash annually,
maintaining a very strong cash position while displacing the debt and
interest load on to smaller and weaker supplier firms. This supports
Amazon’s high share price, as one of five $2 trillion firms, without
having ever paid a dividend nor conducting hardly any stock buybacks.
However, there are signs that this significant advantage is coming
under increasing competitive pressure, driving Amazon to further
intensify work discipline and maintain high levels of investment to
continuously improve productivity through automation and the
de-skilling of labor. At the same time, it points to Amazon’s
possible vulnerability to organized job actions such as slowdowns, if
these could be undertaken at a sufficient scale.

Benjamin Y. Fong and Scott Jenkins

This all seems to further underline the importance of its logistical
operation, which in effect allows Amazon to benefit from a huge cash
advantage on the backs of its suppliers. How is the company’s
supplier network different from that of big-box retailers like
Walmart? And how are the terms that Amazon negotiates with their
suppliers different from those negotiated by the high-import,
high-employment big box retailers that dominated the pre-e-commerce
era?

Stephen Maher and Scott Aquanno

That’s a great question. Without having researched Walmart in depth,
a few things come to mind. Of course, Walmart has an advanced
logistics system, as it must in order to survive amid the cut-throat
competition in these sectors. But it is set up a bit differently than
Amazon. Walmart negotiates high-volume contracts with a smaller number
of larger suppliers, receiving discounts via bulk purchases. Amazon
does this too in relation to its “first-party” suppliers, but what
is different about Amazon is its substantial reliance on a large
number of smaller “third-party” sellers.

Rather than negotiating favorable wholesale prices, Amazon charges
these sellers fees to use its system — somewhat akin to a toll road,
although with the very important caveat that Amazon also adds value to
commodities it purchases. Amazon has thus deeply commodified its
logistics operation in that it makes its system and platform available
to any firm willing to pay the fees it charges for these services.

Thus instead of a scale-based model in which it gets discounts from
large sellers for large sales volume, Amazon relies much more on the
extraction of fees by virtue of its control and competitive operation
of an e-commerce logistics system. Because its third-party sellers are
fragmented, while Amazon is centralized, Amazon also gains more
leverage over these firms and is able to capture a larger proportion
of their total revenues in the form of seller fees — sometimes as
much as 50 percent — as well as to gain interest-free cash by
delaying payment to them.

As we argue in the paper, these third-party sellers are a distinct
type of business that specializes solely in selling on Amazon. Amazon
therefore effectively centralizes these capitals by absorbing them
within its overall structure, continually funneling value into Amazon,
while sellers benefit from their ability to profit “independently”
from using Amazon’s highly competitive system. In fact, the fees and
conditions Amazon imposes on these sellers is nearly sufficient to
finance all new investment as well as its day-to-day operations.

Benjamin Y. Fong and Scott Jenkins

That’s wild. And it also underlines the importance of Amazon
Logistics: without its highly efficient distribution network, it’s
not going to attract those third-party sellers.

In addition to countering some popular arguments about the structure
of Amazon, you also make some organizing prescriptions near the end of
your article, writing:

FCs [fulfillment centers] are central to Amazon’s circulation of
commodity-capital: receiving inflows from sellers and suppliers and
holding the bulk of the inventory, which flows out to SCs and delivery
centers once it is purchased. As such, they are critically important
for sustaining its competitive dominance through the continuous
compression of circulation time and have particular strategic
significance. Yet the scale of these facilities suggests that it is
not sufficient to merely mobilize a “militant minority” of workers
to wield power there; rather, this requires broad and deep organizing
to mobilize large numbers of workers.

What are strategic challenges to organizing in fulfillment centers?
And why should we focus organizing efforts there instead of at other
nodes in Amazon’s distribution network?

 

Stephen Maher and Scott Aquanno

Exactly. Like all firms, Amazon is competing with other firms in
various sectors across the economy over market share, but it is also
locked in a competitive struggle with its customers and suppliers to
capture the maximum quantity of surplus value within value chains. It
wants to acquire the largest possible amount of surplus by forcing
suppliers to accept the lowest possible prices (and other conditions)
while charging customers the highest prices it can get away with. But
its ability to raise prices is limited by the intensely competitive
nature of these markets. Amazon has to attract supplier firms by
offering them the opportunity to reduce their costs, compress turnover
time, and reach the widest markets. Meanwhile, it has to attract
customers by offering them fast delivery times and low prices. This
means Amazon is under incredible competitive discipline to maximize
efficiency, intensify work, and exploit labor.

In order to pull this off, Amazon undertakes extremely high levels of
investment in its warehousing and logistics system. The
competitiveness of Amazon, including AWS, hinges on the efficiency of
its warehouses, where thousands of workers are employed laboring
together under conditions of bitter exploitation, close work
discipline, and intense surveillance. In many respects, it looks like
a scene out of _Capital, Volume I_.

‘Organizing Amazon’ seems to ultimately mean organizing the
warehouses that are the hubs of its system. But this demands a
strategy that combines _disruption_ and _scale_.

As you mention, these warehouses are hubs within Amazon’s
regionalized logistics network: 76 percent of orders are shipped from
an FC in the customer’s region. This means that although Amazon
operates on a national scale, its operations are segmented at the
regional level. While the intense competitive pressure Amazon is under
makes it vulnerable to disruption, the regional structure of its
system potentially allows workers to exert significant leverage by
organizing regionally. And this points to the centrality of the
warehouses, which serve as regional hubs.

Of course, the scale of these facilities, and the level of
surveillance and discipline workers are under, as well as the high
level of turnover and other factors, mean that organizing there is
definitely very challenging. As others have pointed out, smaller
facilities such as delivery stations and the “last mile” may be
easier to organize with the relatively small resources available to
us. And certainly this could play a role. But questions of strategy
have to come back to how the company will react.

Amazon has a relatively large amount of flexibility to respond to
disruption in the smaller delivery stations through uberization and
subcontracting delivery to other carriers, rerouting flows of
commodities through other stations, or even moving delivery stations.
If organizing efforts are going to focus on delivery, we need a plan
to respond to such moves. Disruption at the warehouses, on the other
hand, is much harder to get around. The assumption often seems to be
that organizing delivery can spill over to the warehouses, but this
faces significant challenges that would also need to be addressed.

As we argue, “organizing Amazon” seems to ultimately mean
organizing the warehouses that are the hubs of its system. But this
demands a strategy that combines _disruption_ and _scale_. Given
the size of the warehouses, building power there requires broad and
deep organizing involving a relatively large number of workers. And to
be effective, these efforts cannot just be limited to a single
warehouse but need to take place at a regional scale. But scale alone
is not enough. Amazon’s investment strategy affords it substantial
surplus capacity, and therefore flexibility in the face of challenges
or blockages. This means that the traditional business unionism model,
whereby union strategy is limited to collective bargaining over
contracts at regular intervals, is unlikely to be sufficient for
exerting real leverage over the firm. The flexibility of Amazon’s
model, along with its vulnerability in the context of the intense
competition it faces, means that building power requires that workers
develop equally dynamic capacities for disruption.

Benjamin Y. Fong and Scott Jenkins

Some would argue that Amazon can easily reroute volume around
fulfillment centers in the event of a strike at one of them, and so
these “dynamic capacities for disruption” there are slight. How
would you address the remarkable resiliency of Amazon’s FC network?

Stephen Maher and Scott Aquanno

Amazon definitely has lots of flexibility in its system, especially
during nonpeak times. Yet Amazon’s surplus capacity is not infinite
— there are limits to what the system can accommodate. This means it
is important to identify where and when they have the least ability to
circumvent and undermine any disruptive power. For starters,
Amazon’s logistics system has both centralized and dispersed
components. The FCs (and IXDs [inbound cross docks]) are relatively
centralized. They are hubs from which commodities are dispersed as
they flow out to a larger number of delivery stations. Thus, FCs offer
the opportunity to exert leverage over the network of more fragmented
facilities they supply. Focusing on the latter, smaller facilities
would mean that a larger number of independent facilities would have
to be organized in order to exert the power that could result from
shutting down warehouses.

Taking on Amazon requires a fundamentally different model than that of
the big unions.

The surplus capacity Amazon maintains points to the need for a
strategy oriented around both disruption and scale. In terms of scale,
it is clear for the reasons you suggest that organizing a single
warehouse is not enough. As we mentioned earlier, while Amazon’s
system is national, it is regionally segmented. This points to the
possibility of building leverage within particular regional segments
of the system — but it also means that this organizing has to take
place on at least a regional scale. At the same time, there needs to
be a focus on building disruptive capacity. The typical business
unionism model won’t work because it gives Amazon time to prepare,
and thus to undermine any actions. Taking on Amazon therefore requires
a fundamentally different model than that of the big unions.

Benjamin Y. Fong and Scott Jenkins

I think we probably disagree about the regionalization, as that’s a
relatively new phenomenon and one that Amazon would be willing to
forgo should system disruptions require long-range fulfillment. But we
definitely agree about the point around building disruptive capacity,
and there are nodes in their system (the IXDs, the sortation centers)
that don’t bear the same kind of resiliency.

Right now, the Teamsters have active organizing efforts at the big
KCVG air hub and a few delivery stations. One convincing argument for
focusing on these facilities is that they are very place-based and
present specific problems for Amazon — rapid air delivery and the
usefulness of a traditional hub-and-spoke model for achieving it in
the case of KCVG, and the labor-intensive nature of urban logistics.
What would you say about the current Teamsters organizing efforts?

Stephen Maher and Scott Aquanno

If the question is how to maximize workers’ leverage over Amazon,
then we are talking about how to impose costs on it. This requires an
analysis of how its operations are organized, which gives us a sense
of the potential impact of various strategies. The regionalization of
Amazon’s logistics network suggests that maximizing power requires
worker action on at least a regional level. Forcing the firm to
“forgo” this structure, as you say, would come at a significant
cost, particularly given the fiercely competitive nature of this
sector, as we point out in the paper. Such restructuring would impose
near-term costs and impact Amazon’s ability to accelerate commodity
circulation. Indeed, this competitive drive to compress space and time
is at the core of its competitiveness and led to the development of
the regionalized structure in the first place. To us, this points to
the strategic importance of the FCs, as the central nodes in each
region.

In terms of the Teamsters efforts, it is of course great to see the
labor movement getting involved in organizing Amazon, which is rapidly
becoming the largest private employer in the US. Organizing Amazon is
a generational project that presents the opportunity to actually
impact the entire working class, as well as to revive the labor
movement. But as we pointed out earlier, the traditional “business
unionism” model is unlikely to succeed in this case, particularly
given Amazon’s incredible flexibility.

Thus, while taking on Amazon offers the chance to revitalize the labor
movement, which is currently in a deep crisis, at the same time it
challenges the labor movement to change. This is unlikely to come from
the top down, but will require rank-and-file activists to challenge
existing strategic orientations and institutional hierarchies. In
addition to flexible disruptive capacity, the competitive imperative
to accelerate circulation, for example, suggests that building
workers’ power at Amazon demands a focus not only on wage
bargaining, but also incorporating demands for greater worker control
at the shop-floor level.

Organizing Amazon is a generational project that presents the
opportunity to actually impact the entire working class, as well as to
revive the labor movement.

Getting into this fight in a serious way requires the unions to go all
in and calls for the participation of the labor movement _as a
whole_. It is not enough to focus on delivery stations, which, as we
noted before, are small and relatively easy to route around, relocate,
or even subcontract or uberize. Organizing Amazon demands a far larger
commitment of time and resources to build power where the workers are
— especially in the warehouses. Frankly, the recent Teamsters
“strike” against Amazon, in which probably under 1 percent of
Amazon’s US blue-collar workforce participated, wasn’t all that
encouraging; it came from the top, was premature, and in general did
not indicate the commitment and willingness to change that is needed.
A regional strategy, initiated from the bottom, via a series of
rotating actions in places where the union was strong (for example,
starting in California and moving on to another region shortly
thereafter) may have been more effective.

It seems to us that there is a real need for sober reflection on these
shortcomings and issues, as this is the only way we can move forward
with the critical project for rebuilding the power of the working
class. If we want the labor movement to advance, we simply can’t shy
away from the hard questions.

_STEPHEN MAHER is assistant professor of economics at SUNY Cortland
and coeditor of the Socialist Register. SCOTT AQUANNO is assistant
professor of political science at Ontario Tech University. They
coauthored the book The Fall and Rise of American Finance: From J. P.
Morgan to BlackRock._

_BENJAMIN Y. FONG is associate director of the Center for Work and
Democracy at Arizona State University. He has a Substack focusing on
labor and logistics called On the Seams. SCOTT JENKINS is a visiting
scholar at the Center for Work and Democracy._

_JACOBIN is a leading voice of the American left, offering socialist
perspectives on politics, economics, and culture. The print magazine
is released quarterly and reaches 75,000 subscribers, in addition to a
web audience of over 3,000,000 a month._

_Subscribe to Jacobin today, [[link removed]] get four
beautiful editions a year, and help us build a real, socialist
alternative to billionaire media._

* Labor
[[link removed]]
* Amazon
[[link removed]]
* union organizing
[[link removed]]
* rank and file strategy
[[link removed]]
* Strategy
[[link removed]]

*
[[link removed]]
*
[[link removed]]
*
*
[[link removed]]

 

 

 

INTERPRET THE WORLD AND CHANGE IT

 

 

Submit via web
[[link removed]]

Submit via email
Frequently asked questions
[[link removed]]
Manage subscription
[[link removed]]
Visit xxxxxx.org
[[link removed]]

Twitter [[link removed]]

Facebook [[link removed]]

 




[link removed]

To unsubscribe, click the following link:
[link removed]