Jump to content
Sign in to follow this  
  • entries
    68
  • comments
    776
  • views
    16,831

Amazon - From nothing to ubiquitous 

nevets88

7,633 views

I remember when Amazon just sold books, people thought it was a cute company, it's a giant now. A leviathan. It sells nearly everything, its cloud services has the tentacles of a thousand octopi, not everyone is aware just how huge AWS is. It makes TV shows and is getting into movies for goodness sake.

Lately, I've been doing lots of price comparisons and Amazon's everyday prices are just so competitive. If you have Prime, which is pretty much free shipping and reduced price next day shipping (I make generous use of Prime's video, music, library, cloud and photo storage services), it practically can't be beaten.  I try to support local stores, tried to buy a Dremel attachment for example - the experience was some stores didn't have it, if it did, 30-40% more than Amazon. I just had Amazon next day ship it to me as the overnight delivery step up charge was $0. Went to buy some windshield wipers at Pep Boys, looked at Amazon - it's half the price. How do you compete with this? While I find the money saved to be very copacetic, it just troubles me what they might be doing I don't know about to keep prices low and its effect on future commerce.
 



38 Comments


Recommended Comments



I remember looking at the prospectus for Amazon back in the 90's.  I remember saying to my CFO for a NYSE publicly traded company, "if they're showing only losses for their 5 year projection, how could anyone invest in them"?  He agreed.

Doh!

Regarding low prices.

We had a long time sporting goods chain announce they were closing last week, Sports Chalet.  Kmart/Sears just announced they are closing 78 stores.

It used to be the big box stores were wiping out small business.  Now, Amazon is going to start wiping out the big box stores.  The next 10 years is going to be interesting.

Meanwhile with the increase in the minimum wage in Calif. in addition to rents, how can brick and mortar stores compete?  A small business can't keep their employees fully productive during their work day given the lower volumes and sometimes empty or nearly empty stores.  Amazon not only has much lower rent as a % of revenue but can keep their employees fully productive 24/7, i.e. much lower payroll as a % of revenue.

Share this comment


Link to comment

I never buy anything from amazon; if I can get it local I do.  If I can't get it local (or order it from a local store), I find some other online retailer to buy it from.  That usually means waiting longer and paying more.  I think it's important to keep money local, both to help local business people and to retain some local character/flavor.  For example, we have a great table-top game store in Ithaca called The Enchanted Badger.  I could get anything they sold (and more) from Amazon, BUT Amazon doesn't host weekly game nights or provide a bookshelf full of games that you can try before you buy.  We also have a great, local bookshop that barely stays open.  Again, great character, nice staff to talk about books with, and it's locally owned.

Also, I hear (from a reliable source) that working for Amazon is complete s**t.

Share this comment


Link to comment
16 hours ago, No Mulligans said:

I remember looking at the prospectus for Amazon back in the 90's.  I remember saying to my CFO for a NYSE publicly traded company, "if they're showing only losses for their 5 year projection, how could anyone invest in them"?  He agreed.

Doh!

Regarding low prices.

We had a long time sporting goods chain announce they were closing last week, Sports Chalet.  Kmart/Sears just announced they are closing 78 stores.

It used to be the big box stores were wiping out small business.  Now, Amazon is going to start wiping out the big box stores.  The next 10 years is going to be interesting.

Meanwhile with the increase in the minimum wage in Calif. in addition to rents, how can brick and mortar stores compete?  A small business can't keep their employees fully productive during their work day given the lower volumes and sometimes empty or nearly empty stores.  Amazon not only has much lower rent as a % of revenue but can keep their employees fully productive 24/7, i.e. much lower payroll as a % of revenue.

With regards to e-commerce, I'm guessing as long as it's able to keep shipping costs minimal, it maintains its price advantage. Its profit margins have historically been in the low single digits (and in the red not uncommon) vs Apple (granted, different markets), around 35-40% in recent years. Everyone argues that Bezos is building market share and dominance. When is the tipping point when that dominance turns into profits? What changes as it grows bigger and bigger will it have on B&M and the way we shop? I look ahead with trepidation as I continue to buy from Amazon with hesitancy. If its drones block my OTA signal as I watch The Masters, I'm boycotting Amazon! Speaking of big, somebody, please, stop Comcast. Another scary company.

Share this comment


Link to comment

Big box stores, Amazon included are scary.   They can buy in bulk and lower their prices which can lead to mom and pop stores closing.   Look at the downtown districts in quite a few small cities.   When Walmart, Home Depot or Lowe's move in, the local hardware stores struggle to survive.   

I buy local to support the community unless they aren't close to being competitive.   If they are within 20%, I'll support local businesses.      That being said, I'm looking at a slope range finder either a Bushnell or Leupold.   The local golf stores aren't with $75 of online prices.

Can you imagine, large scale, if all of the small businesses were replaced buy the big box stores or eCommerce?   

Share this comment


Link to comment

So again, this time needed some plumbing parts, went to local plumbing supply stores, none of them had the required parts, go to Amazon, found them, $8 shipping next day, two days is free, but needed them ASAP. Should have just gone straight to Amazon. 

Share this comment


Link to comment

BE VERY AFRAID

Quote

Like a lot of other people, he wanted to know what was going on. “Are you aiming to take over that last mile?” Mossberg asked.

Bezos shook his head. He said Amazon was creating a delivery network that added to—and didn’t replace—those of FedEx, UPS, and the U.S. Postal Service. “It’s not that we are trying to take over,” he said.

“You’re not trying to put FedEx out of business?” Mossberg prodded him.

“No,” Bezos said.

“Or get better prices from them?”

“No, in fact what we want …” Then Bezos paused for a moment and smiled. “Well, we’d always like better prices,” he said. “Yeah, feel free.” The audience laughed, and Bezos completed his thought: “We will take all the capacity that the U.S. Postal Service can give us and that UPS can give us and we still need to supplement it. So we’re not cutting back. We’re growing our business with UPS. We’re growing our business with the U.S. Postal Service.”

Quote

Last September, Amazon introduced an on-demand delivery program called Amazon Flex. With Flex, people with transportation and some time on their hands log in to an app, indicate their availability, and then pick up and deliver Prime Now packages, much as Uber drivers do with people. Amazon Flex deliveries come in handy when there’s an unexpected surge in Prime Now orders, such as before a blizzard on the East Coast when the entire island of Manhattan is stocking up on canned soup. In the early hours of July 31, it was Flex couriers who transported copies of Harry Potter and the Cursed Child to Prime Now customers.

http://www.bloomberg.com/features/2016-amazon-delivery/

Share this comment


Link to comment

It's tough to go local because there isn't really any local places that sell stuff I need in terms of household goods. 

We use to go to a local grocery store, but their quality has suffered a ton. 

Typically the only local places I go to are restaurants. 

Share this comment


Link to comment

Amazon Go. No checkout at the supermarket. Just walk out you get charged. Mixed feelings about this.

Quote

 Instead, customers scan their phone on a kiosk as they walk in, and Amazon automatically determines what items customers take from the shelves. After leaving the store, Amazon charges their account for the items and sends a receipt.

http://www.wsj.com/articles/amazon-grocery-store-concept-to-open-in-seattle-in-early-2017-1480959119

 

Share this comment


Link to comment
On 12/22/2016 at 3:31 PM, nevets88 said:

Amazon trying to co-opt the brick and mortar checkout process?

 

I was just about to comment on how I only shop for groceries now and get all my other goods from amazon. Guess that might not last as long as I thought.

Share this comment


Link to comment

Gotcha! Have been buying cat food from Amazon for awhile, didn't do the Dash/kitchen counter renewal thing because reports of price manipulation lock in. Noticed the monthly cost of cat food went up 17%, didn't think cheaper prices were out there, but guess what, found another vendor with the original Amazon pricing, free shipping and got an extra 15% off . SUCK IT AMAZON. :-D:-O

Share this comment


Link to comment

Amazon was one of the first real retailers on the Internet. They are one of the few 'first' that are still on the net. Their huge success is that they are continually transforming themselves. No company I know of does it better than they have. Prime is a good deal with the video as a bonus. I shop there a lot because I live in a small town and the stores don't usually carry full limes of merchandise. For example our local Dick's Sporting Goods store carries Nike but NOT flyknit. Scottsdale is the closest I can get them (100 miles). They cal it one of their 'small' stores.

Also when I pay sales tax it's only the State tax, not the city or county so it's less taxes. :-)

Share this comment


Link to comment
10 minutes ago, parman said:

Prime is a good deal with the video as a bonus.

I kinda wish I could get the old Prime back - just the free two-day shipping, please, at a lower cost.

Share this comment


Link to comment

My wife and I have Prime and we love it. The video is at minimum equal to Netflix. I have found Amazon's customer service is exceptional. 

My brother lives in Seattle and they are all scared of Amazon up there. In my heart I also want to support local shops, but it's hard to justify a 30% markup for bad service and limited selection. For what it's worth, I buy very little golf stuff on Amazon. 

Something I've always found a little bid creepy about Amazon is how the prices fluctuate on the day to day - up 2% one day, down 3% the next - and so on. They know exactly what we are adding and taking off our wish lists.. 

Share this comment


Link to comment
8 minutes ago, Kalnoky said:

My wife and I have Prime and we love it. The video is at minimum equal to Netflix. I have found Amazon's customer service is exceptional. 

My brother lives in Seattle and they are all scared of Amazon up there. In my heart I also want to support local shops, but it's hard to justify a 30% markup for bad service and limited selection. For what it's worth, I buy very little golf stuff on Amazon. 

Something I've always found a little bid creepy about Amazon is how the prices fluctuate on the day to day - up 2% one day, down 3% the next - and so on. They know exactly what we are adding and taking off our wish lists.. 

I think there were reports it adjusted pricing based on what machine you're using - Mac vs PC and they charged Mac users more.  

Share this comment


Link to comment

I don't see the worry in them buying Whole Foods.  But then again, I don't go to Whole Foods either.  

I love the commercials for Amazon that Larry Miller does.  "You can get anything you want, anything at all, except an actual Amazon.  But you can get a poster of Lynda Carter."

Share this comment


Link to comment

So Whole Foods just verifies Ben Thompson's quote - something like, "Amazon's goal is to take a cut of the ECONOMY." As I've said before, this company is scary.

Quote

I said at the beginning that Mackey mis-understood Amazon’s goals, strategies, and tactics, and while that is true, the bigger error was in misunderstanding Amazon itself: unlike Whole Foods Amazon has no desire to be a grocer, and contrary to conventional wisdom the company is not even a retailer. At its core Amazon is a services provider enabled — and protected — by scale.

Indeed, to the extent Waterloo is a valid analogy, Amazon is much more akin to the British Empire, and there is now one less obstacle to sitting astride all aspects of the economy.

https://stratechery.com/2017/amazons-new-customer/

Quote

Jeff Bezos's big bet is that he can make buying from Amazon so effortless that we won't notice the company's creeping grip on commerce and its underlying infrastructure, and that we won't notice what that dominance costs us.

https://motherboard.vice.com/en_us/article/7xpgvx/amazons-is-trying-to-control-the-underlying-infrastructure-of-our-economy

 

Share this comment


Link to comment
1 hour ago, nevets88 said:

So Whole Foods just verifies Ben Thompson's quote - something like, "Amazon's goal is to take a cut of the ECONOMY." As I've said before, this company is scary.

https://stratechery.com/2017/amazons-new-customer/

https://motherboard.vice.com/en_us/article/7xpgvx/amazons-is-trying-to-control-the-underlying-infrastructure-of-our-economy

 

it is scary how big some of these corporations are getting. Amazon has their hand in everything. And behind it all, data on just about everyone. 

Share this comment


Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now


×

Important Information

Welcome to TST! Signing up is free, and you'll see fewer ads and can talk with fellow golf enthusiasts! By using TST, you agree to our Terms of Use, our Privacy Policy, and our Guidelines.

The popup will be closed in 10 seconds...