Funny – that’s way different from what they said in their IRS tax return.
Yeah, yeah, very funny. Since we’re in GQ, I’ll remind you that businesses can apply expenses, losses, and other deductions against their taxes, which is how their total comes to zero.
I knew someone in management at FedEx in Japan, and he said they really didn’t save much from making slower deliveries. Their infrastructure is set up for moving things as quickly as possible. Occasionally, money can be saved by allowed a package to be bumped by another package if space for a particular shipment is tight, but for them it really didn’t make sense to introduce a lower price for slower delivery.
Amazon isn’t just a logistics/tech/resale/b2b/content/lobbying company, it exists at the perfect nexus of all of the above. Simultaneously, they are improving their infrastructure (often creating new infrastructure out of thin air), shoving out competitors with their incredible access to capital and branding, buying out competitors, leveraging economies of scale with UPS, pitting UPS and FedEx and the USPS against each other (and once they’re weakened enough, launching their own logistics fleet), offloading some of their logistics capacities to beholden and bespoke independent delivery companies, fighting/buying governments to suit their needs (such as their endless corruptions of the Seattle city council to facilitate HQ expansions and their attempts to blackmail/bribe cities into acting as subsidized tax havens for HQ2), minimizing and exploiting labor, etc.
They are the perfect capitalist in the long-term ROI sense, turning the “company town” into the “company country,” but they are really pretty terrible when it comes to their labor and competitive practices. Amazon isn’t just a warehouse or just a logistics service or just a bookseller or just a Netflix competitor or just a lobby or just another internet services provider or just another OEM or just another publisher, etc., but a perfect example of the efficiencies and horrors of a horizontally integrated multinational megacorp. What they are is ruthless and efficient, and willing and able to use different parts of their business (and the promise of future growth) to subsidize others as needed, destroying current and nascent competitors and labor uprisings by sheer economies of scale and near-monopolies in many of their industries. https://www.bloomberg.com/graphics/2019-amazon-reach-across-markets/ is a good overview of just how gigantically powerful they are. In any other era, they would’ve been a world superpower unto themselves (and they are, we just like to pretend like corporations are subservient to states; Amazon is not, not in any meaningful sense).
When you’re #1 or #2 across many industries, each of which is a huge deal, it is really hard for any other competitor to meaningfully challenge you, because you can easily redirect 1% of your resources from your other industries to fight off the challenger, buy them out, and then reap their profits as your own after you’ve crushed them, all while ignoring ethical challenges to your practices because instead of changing your practices, you can afford to buy out entire cities, politicians, and countries.
To be fair, Amazon also undertook/expanded on a lot of risky innovations (online retail, 1-click, e-ink, B2B tech, Prime, AI/IoT, reviews, exceptional customer service)…
Actually, not only are they a warehouse, they’re many, many warehouses. And they’re so good at it they sell warehousing services to other businesses, who pay to keep their products in Amazon warehouses, who then sell their products on Amazon.com, and who then pay Amazon again once the product ships (all while Amazon enjoys the benefit of listing their products). Fulfillment by Amazon – FBA – Amazon They do similar things for ebooks, real books, music, movies, apps, etc. They are a marketplace of marketplaces.
The more you do business with Amazon, the better it is for Amazon, the less important your own brand/business becomes, the more reviews Amazon gets, the more customer satisfaction and retention they get, the better their logistics get, etc… but if you don’t do business with Amazon, your competitor will, and their stuff will be cheaper, get there faster, and have way better customer service than your small shop ever will. So what do you do? You play along.
Amazon even has its own space program.
I bet if they wanted, they could use that New Glenn rocket to deliver orders. Yep, no need for airplanes, vans and drones. Just load up the rocket and fly it around the Earth, dropping off packages to land (via parachute? retrorocket?) in people’s back yards.
Amazon makes most of their money from AWS, and a little bit from selling books and stuff (very little considering the volume they do).
A big part of the reason is that fulfilling orders is labor intensive. An ecommerce operation like Amazon has much higher labor costs compared to a brick and mortar store. In a typical retail store the consumer performs the picking operation which is typically about 40 to 60% of the labor costs within a distribution center. For Amazon, they had to hire a bunch of people to walk 10 miles per day picking the items instead of being able to have the consumer carry it for free to the checkout/packing area.
Automation helps, but it’s not cheap either.
This may be true, but it’s probably the wrong way to think about it.
How often do you not order something online but buy it locally because you need it today or tomorrow? I try to plan things out, but even then I still make at least a few semi-unplanned trips to various local stores each month because I need something faster than 2-day Prime shipping will get it to me.
Amazon would love for me to make those purchases with them instead, and if they make it cheap enough, I will, and so will a lot of people.
To the OP, I expect we’re not paying as much more as you might think, because the way that Amazon is shipping faster is by improving logistics. More warehouses closer to more customers with better estimates of what things people will order on a given day makes shipping faster, and costs not much more if you crunch the data right.
One way to ship things quickly is to use (expensive) fast transport methods. The other way is to use (cheap) slow transport methods, with really good predictions about when and where to route them. I expect Amazon is mostly doing the latter.
Indeed. There are many times I would have just gone to the local store to get something I need within the next day and just ended up doing it online from Amazon because it’s cheaper and more convenient. Many times. So for every Broomstick that could wait a week for a purchase, I’m sure there’s plenty of us who need something ASAP and would go to a brick and mortar instead, but Amazon has a same-day or next-day option that is good enough and often cheaper overall.
Speaking as someone who owns a small shop, this is true. I lose a lot of business to the local brick and mortar stores. I have merchandise that moves extremely slowly online, but when I take it to my in-person vending events, it moves just fine. Lots of people shop impulsively - if it’s there in front of them, that’s when they whip out the wallet. I’ve also had a few online customers who email me to ask how quickly I can ship because “I need it by Tuesday”.
Maybe once or twice a year? I have very few spontaneous “emergency” needs these days.
And, as much as Amazon might like it, I somehow don’t think I’ll be able to order a tankful of gas for my car or truck to be delivered, which is about the only purchase I make that can’t wait a day or two. Even that is pretty rare, as I normally refuel at a quarter-tank, which can last me 3-4 days with normal driving.
Of course, I might be an outlier.
I’m pretty sure I’ve seen ads for dotcoms that will deliver gas to your car. Here is one, but it’s not the only one.
If you type your item description into google, the first result seems to always be amazon. You can scroll down however and find other vendors. Since they usually tell you what the shipping cost is, you can find out how much you are paying for free delivery. It’s time-consuming though. Moreover, some places will waive shipping costs if you spend enough and where are you then? Still it looks like amazon prices are a couple of bucks higher for cheap stuff, and often the same as competitors for more expensive stuff. Also, I find it’s often hard to find an “apples to apples” comparison on stuff.
One more thing, the pop-up ads and the like a probably a good source of income for these web sites, replacing displays at the front of a brick and mortar store that you have to walk past to get what you came for.
Neat. Although they don’t (yet) serve my neighborhood. And I also notice that apparently they are only delivering to a particular neighborhoods on particular days, they’re not something you can get in a pinch. On the other hand, if you DO have someone top off your tank twice a week you’re less likely to run low/out without warning.
I love this. Newegg will sell you a Toshiba 4TB Canvio for Desktop External Hard Drive, USB 3.0 for $125.99
but by clicking around you can find a Toshiba 4TB Canvio for Desktop External Hard Drive, USB 3.0 for $94.99 from … Newegg.
I have to (cynically) wonder are they selling gas to the public, or just hoping to sell a web business to amazon?
It doesn’t have to be an emergency - but at least a couple of times a month I realize I want/need something within the next couple of days rather than a week later. Maybe I want the foot peel but I don’t want to wait a week for shipment. I can order it from Amazon prime and get it in tomorrow or I can go to Ulta after work and get it. I mean, you might be really good at planning all your shopping in advance , so that you’re almost never in a situation where you want or need something today or tomorrow- but it’s also possible that it happens all the time and you just aren’t thinking of those situations. For example stamps- I buy stamps at the post office specifically because if I order them online they will not be delivered the next day and I use stamps rarely enough that I typically don’t want to wait a week for them. I would never go to the post office for stamps if I could buy them online and get them delivered the next day.
I actually get my stamps at the same store I work at. Available from any cashier at the front of the store any day of the week 24/7.
I think in my case I really am that methodical about planning my shopping. I hate shopping (ironic, given where I work).
And I get that you might not want to wait a week for something - like the foot peel you mentioned - but I would be willing to do so. I just don’t feel urgent about anything I need or want these days.
I think you probably are an outlier, although I don’t have good data. I believe that my 2-3 times a month figure puts me on the low end of “things needed on short notice” spectrum.
A lot of my failure to adequately plan is driven by my young children, who often do not behave in easily predictable ways. But not all of it.
Ah, well, children will complicate things.
I do not have children and now live alone. I’m not having another household member spring surprises on me.
I’m not saying it never happens, but it would be exceedingly rare for me.
Underline mine.
True. Recently I simultaneously made a purchase of a 40-pound bag of smoker pellets and a Blu-ray copy of Ralph Wrecks the Internet. Usually I try to make multi-purchases at least similar in size and weight but I needed the former and remembered the latter when I was about to click on the Order button. Both were free but the disc arrived the next day while the pellets took five days.
I was just as happy they did not stuff the disc case into the same carton as the pellets.