How many small retail businesses keep multiple bricks and mortar locations solely as a backup in case one location becomes unusable? How many retail businesses have two locations just in case the street outside their premises is permanently removed without notice by the owning municipality?
There is a limit to how much risk individuals and small businesses can realistically hedge against. Insurance can cover many risks, but it doesn't necessarily cover the impacts of legal, but arbitrary, abuses by business partners. Unpredictable, uninsurable, risks should not be offloaded onto people who are unable to withstand them.
> How many small retail businesses keep multiple bricks and mortar locations solely as a backup in case one location becomes unusable?
This is an insurable risk. (Property, renter and/or business interruption.)
As you mention, abuse by business partners is not insurable. Which is why one should not be 100% dependent on a small number of them.
In this case, 100% of the inventory should not have been with Amazon. And 100% of their wealth should not have been in inventory. None of this takes away from his claims on Amazon, of course.
That argument is sort of like saying "Only upper class people with Ivy League educations should ever start a business." Even in the startup world, businesses tend to learn a fair amount of what not to do by tripping over some issue they didn't expect.
I'm all for analyzing what went wrong for purposes of trying to help educate people about how to do things better, but I am extremely uncomfortable with the trend in comments here to more or less act like "This guy just should have known better and not trusted Amazon."
I worked in insurance for a few years. Most ordinary people have almost zero understanding of how insurance works, what it's for, etc. Most people are not making informed consumer choices about insurance. They mostly get what the law compels them to get or what some professional recommends to them, etc.
There is a limit to how much risk individuals and small businesses can realistically hedge against. Insurance can cover many risks, but it doesn't necessarily cover the impacts of legal, but arbitrary, abuses by business partners. Unpredictable, uninsurable, risks should not be offloaded onto people who are unable to withstand them.