Sent Items #169: Monday, November 4, 2024 [ELECTION EVE!!]

Well, last week was a tough one for Yankees fans. One lesson learned - the Yankees only win when I go to a game, so next time they are in the World Series I must go to every one. Here’s a pic of us at Game 4, the only one they won. Congrats to the Dodgers, they were the much better team.

Speaking of New York, I couldn’t resist bringing some of my favorite logistics and e-commerce friend together for a little happy hour.

Finally, what’s a trip to New York without grabbing one of these - they just don’t make ‘em like that in Nashville.

Finally, let me share some thoughts on tomorrow. Because I can’t resist, and this is my newsletter! Firstly, I voted! I became a citizen in February, 2023, so after living here for 16 years I was finally able to vote!

And I did the right thing, and voted for Kamala Harris and Tim Walz.

I have several thousand subscribers here. I realize many of you have voted for or will vote for Trump. And I likely won’t convince you to change your vote, if you haven’t already. But a recent quote from the great Bobby Weir, a founding member of the Grateful Dead, really resonated with me. He wrote, “More good comes from building a world where disparities aren’t so pronounced that they cause friction and reducing the inequalities that create barriers.”

If you are reading this, you are probably doing quite alright. You likely have investment portfolio, which, by the way, is at an all time high. You probably have a high yield savings account, yielding 4 or 5%. You probably have your house paid off or locked into a mortgage when rates were under 3%. You also are likely not worried about a carton of eggs costing $2.79 v $2.29 several years back (even if that was the case). Also, by the way, my gas prices are $2.75/gal. A year ago they were $3.05. Yes, inflation is real, but remember that pandemic we had a few years back? Remember the amount of money we printed, much of which went to folks like you in the form of PPP? Check out what inflation rates are like in other countries - the United States has done a much better job containing it. But I digress.

Economists estimate that American household costs will rise by about $1,700 to $4,300 per year if Trump acts on his tariff promises, per PolitiFact. They warn that rising inflation will lead the Federal Reserve to keep interest rates high, resulting in elevated mortgage rates and pricey auto loans. Some experts believe that the recent rise in mortgage rates is partially tied to expectations of a Trump victory.

But most importantly, I want someone in office who cares about Americans. Who isn’t a convicted felon. Who respects women and their bodies. Who isn’t emulating sex acts at campaign rallies. Who hasn’t promoted grabbing women by their pus**ys or is obsessed by Arnold Palmer’s penis size. Yes, I’m laughing in angst. Yes this is all true. I want fluoride to remain in our water. He was not, and would not be, a president for all Americans. Trump talks of withholding disaster aid from blue states. He assails Democrats, other domestic critics and the free press as “the enemy within,” subject to possible military action. I don’t want the military to attack me if I disagree with his policy. This is not who we, as a great country, should endorse as our leader and a great role model.

After all, I would love to try some of President-elect Harris’ (knock on wood!) mean brisket that Doug claims she makes!

I’m sick of the ads. I’m sick of the 40 texts a day. Tomorrow and the next week will be wild. Here are a few stories to hold us over.

The Amazon Everyone Should Have Feared (link)

• Amazon is producing record profits while investing more than ever before. It reported $22.6 billion in capital expenditures in the third quarter — a new high. It also reported $15.3 billion in net income, a new high, too.

• Most of the $22.6 billion investment was spent on AWS expansion, but some went to fulfillment warehouses. The AI boom drove that, and Amazon said it will continue to invest even more. On the flip side, its retail profitability increased due to margin expansion driven by spending less to ship each item — reduction in its “cost to serve,” as Amazon likes to call it. As a result, for the past few quarters, Amazon’s unit sales have grown faster than fulfillment costs — a direct consequence of fulfillment network regionalization in the U.S.

• Over 40 million customers this past quarter have had their orders delivered for free with same-day delivery, an increase of more than 25% year-over-year.

Ghost, B2B retail inventory marketplace, raises a $40 million (link)

• The startup has raised a $40 million Series C led by L Catterton. Ghost is a private B2B marketplace for surplus inventory—large lots of products, anything you’d find in a department store. The founders, previously in fashion, started Ghost to address retail industry inefficiencies by allowing buyers and sellers to transact digitally.

• The brands that Ghost works with don’t necessarily want the general public to know that they have excess inventory. Scarcity is one of the most valuable tools that the fashion industry utilizes to create demand. So, Ghost's platform lets sellers control who sees their inventory to ensure it’s sold in channels that don’t conflict with their core business.

• Of course, marketplaces are tricky as a general rule—they can only really work at scale and if they’re big enough. While the international market is around four times larger, the U.S. alone sees around $500 billion of inventory value moving through the system annually. Due to issues like sizing, seasonality and overproduction, about 20% of that is not-first-run or excess inventory. That means that there is about $100 billion of excess inventory moving through the United States annually.

Amazon Reports Record $15.3 Billion Profit (link)

• Amazon reported record profits last week, as cloud computing sales picked up steam and its retail business showed resilience. Sales from July through September hit $158.9 billion, up 11 percent from the same period a year earlier. The quarter included Amazon’s Prime Day in July, which generated $13.7 billion in product sales in 48 hour

• Profit rose 55 percent, to $15.3 billion. The results surpassed Wall Street’s expectations.

• Amazon’s cloud computing business is continuing to gain steam, driven partly by its artificial intelligence offerings. Amazon Web Services sales grew 19 percent, to $27.5 billion. It accounted for 60 percent of the company’s operating profit.

• The company told investors to expect a strong holiday quarter, with estimated sales reaching as much as $188.5 billion.

• Amazon has also been adding more robotics to its operations as part of its efforts to make its fulfillment and delivery network faster and more efficient. That helps drive down the costs to get orders to consumers, and faster deliveries have typically induced customers to buy more from Amazon, including smaller, everyday orders.

• Shipping costs rose only 8%, while the number of items that customers bought was up 12%. Executives have said they expect to find more efficiencies by improving how and where they bring inventory into warehouses and by better predicting what customers want.

Finally, to end this with some brightness, a reminder that sometimes low-tech is better. That's the life lesson from Richard Cash, who saved millions from dying of dehydration with a simple salt and sugar cocktail (link).

Have a great week. Stay calm (and hydrated).

- Matt

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