At the beginning of the year, just after Amazon reported a big profit dip for Q4 2012, Slate business correspondent Matthew Yglesias posited (with tongue planted in cheek) that Amazon was “a charitable organization being run by elements of the investment community for the benefit of consumers.”
Amazon CEO Jeff Bezos pointedly dismissed that observation in his following shareholder letter, but today one has to wonder if the charity implication didn’t have some sort of lasting impact on the company. That’s because Amazon has just rolled out a new initiative called AmazonSmile, which will see the e-commerce titan automatically donate 0.5 percent of all eligible purchases to a U.S. charity of the buyer’s choosing. And to top it all off, there’s no upper limit to the amount Amazon will give away.
The high-level message is clear: Amazon wants people to know it cares about people and communities. But there’s an underlying message that seems just as apparent: we’ll keep giving as long as you keep buying.
Let’s consider the brass tacks. Starting today, interested users can mosey on over to smile.amazon.com, at which point they’re prompted to select a charity for the proceeds of each transaction to go to (naturally, you can change your mind at any time). Amazon says there are nearly a million charities available to choose from, with recipients ranging from prominent projects like charity:water to much more local, grassroots affairs. A quick search for my hometown for instance revealed that I could indirectly donate to the Bahais Of Cherry Hill Township, the local fire department, or (my personal favorite) the Friends of the Cherry Hill Free Public Library.
Once all that’s done, it’s essentially the exact same shopping experience, complete with Prime shipping if you’ve already shelled out for it. AmazonSmile GM Ian McAllister said that “tens of millions of items” are eligible for the program but there are some notable exceptions. Auto-renewed subscription purchases don’t fall under the AmazonSmile umbrella, and neither do digital products like mp3s, video content, and Kindle books (“for now,” anyway). And this isn’t just a temporary move meant to reflect the spirit of the upcoming holiday season either — McAllister confirmed that the company intends for the program to be around for the long haul.
To hear him tell it, there was no specific moment of inspiration or event that prompted Amazon’s brass to venture down this charitable road, just a desire to build things the company thinks its customers will “love”. Love, suffice it to say, is a curious thing in business. Apple aficionados love their Apple products to the point of waiting in line for days, and BlackBerry fans are among the most ardent and vocal I’ve ever seen in spite of waning fortunes. And if Amazon can entice a larger swath of people to love it because of this new charitable angle, the company won’t be seeing hearts as much as it sees dollar signs.
The upsides here are obvious. With only a fraction of a fraction of each transaction being passed along to charities, Amazon still stands to make gobs of money, especially if this program manages to lift sales volumes in any appreciable way. And you can bet that Amazon is going to play up this charitable angle over time, a move that should only endear users to the process of buying their, well, everythings from the massive e-tailer.
After all, the very thrust of this initiative is to make sure that end users like you and I won’t see any functional difference between plain ol’ Amazon and AmazonSmile — why wouldn’t we donate to charity if doing so didn’t impact us in any appreciable way? What are we, a bunch of jerks? And then there are the potential tax implications to consider too. You as a user won’t be able to claim these donations the next time you fill out your taxes, as they’re all being made on behalf of a foundation established by Amazon. In short, if Amazon plays its cards right, it stands to make plenty of money by giving a ton of it away.