Amazon's Same-Day Delivery Push

Looks like once Amazon realized that they’d eventually have to pay sales tax in all the states, they decided they might as well just go to all those states.

Looks like bad news for the local retailer. Maybe we’ll get less big-box stores out of this?

Damn, classic case of be careful what you wish for, you might just get it.

This explains why Amazon is so happy to cut deals left and right now to pay taxes. Before it fought each battle to the bitter end.

Even with taxes, Amazon can destroy most retailers on price, simply thanks to the fact that it has a fraction of the overhead. It doesn’t have to pay rent on a ton of stores and pay a ton of retail employees. They just open up a few big warehouses and staff them with those fancy robots Amazon just bought. And it’s big enough it can demand lowest prices from suppliers.

What fancy robots? Do tell. Is there some sweet inventory processing robot they are pioneering?

http://dealbook.nytimes.com/2012/03/19/amazon-com-buys-kiva-systems-for-775-million/

Ok, that’s pretty awesome.

That is awesome.

I’m not afraid of monopolies, so I welcome our new robot powered Amazon overlords.

With their generous return policy, I don’t even worry about not having seen an item in person before buying anymore. If I don’t like what I get, I send it back.

I’m kind of wondering how long before Amazon gets some real competition. Obviously the business model works. This move has the potential to start seriously squeezing places like Meijer, Fred Meyer, and Wal-Mart. Will they shift to the same model? They all already have websites, and most have stuff like in-store pickup. Maybe they’ll just shut down some stores in favor of direct shipment from warehouses. They’ve already got the infrastructure of warehouses.

Oohhh, sneaky Amazon, I kinda love this.

It’s not easy. Amazon spent a lot of time and money building its infrastructure up. Remember all those early years when they were spending heavily (and reporting quarterly loses) in the effort to get big, fast? It’s hard to imagine any startup being able to do that now, especially in the face of Amazon, so we’re going to have it come down to the big boys (Costco, Wal-Mart).

Along with that it created a very popular brand that it supported with great customer service. There’s a lot of customer loyalty with Amazon. (There’s an amazing stat about Prime members I read last year. Something like after an Amazon customer signs up for Prime, their spending on Amazon skyrockets, and they almost never leave Prime.) Amazon also became the defacto go-to place for user reviews on products.

With that said, Amazon is vulnerable. Their P/E is just insane.

This, definitely. Once they locked us in with a year of free Prime for student, I’ve been buying everything I can on Amazon almost regardless of practicality. Got into wetshaving, which has a thriving “indie store” culture online (WestCoastShaving, WhippedDog, Ogallala, etc.), but I buy it all through Amazon and its associated dealers. Ditto for games, technology, books. Hell, even some groceries now. It’s absurd.

Yeah, the student cost for Prime is a sweet deal. I’m not sure I can justify $79 a year for the normal cost. It’s pretty easy to get free shipping without Prime if I’m buying from Amazon. The free streaming video isn’t enough and the Kindle Lending Library won’t even let me read a book on my PC with the Kindle app, so that’s a bust.

Now same day delivery if they can deliver me groceries would be compelling if the delivery was free via Prime. If I have to go pick it up myself I’d rather just go to the grocery store. But yeah, I want to BBQ some brats and have a beer and Amazon will deliver it to me by 5pm with free delivery? That would be compelling.

If I wasn’t splitting Prime with a friend, I’d likely not have it either.

Considering express shipping still costs $3.99 with Prime, I doubt you’ll get free same-day shipping if this were to happen though. I’d imagine it’d be in the $10 minimum range at least.

The disadvantages of course is that since same-day will be costly, the offset in usage not to mention cost in establishing highly localized distribution centers will make up for the tax issue. It’s an interesting gamble, though.

Amazon spent years and years building their infrastructure and were willing to go through long periods of red and bad stock prices to do it, and I’m happy to support them. I find nothing wrong with paying $79 a year for Prime, honestly. Did my spending habits go up? Yeah I think so. Do I find value in the service? Yes, pretty much. The mere fact that non-Amazon merchants can qualify for Prime service is a big plus as well.

— Alan

Honestly, the $4 next day is pretty insane as-is. I spent weeks researching mechanical keyboards before buying my Filco, and when I decided I wanted it, I wanted it bad. Ordered on my lunch break at like 2pm from work on a Tuesday. . . had it in my hands by 12 the next day o.O

Yeah, you’d probably spend >$4 in transportation just to get to the store. And certainly more than that if you factor in your time at all.

If you have same day delivery, the only downside to Amazon is that you can’t demo things. I’d be interesting if they set up a front to their warehouses with demo units set up for TVs and such - things that you often want to see in person before buying. Then order the one you want via your phone or kiosk and have a robot bring it out to you!

Or perhaps when the inevitable Best Buy bankruptcy occurs Amazon can scoop up their buildings and turn them into demo facilities. Which is really what Best Buy is becoming anyway.

They’ve been testing same day delivery in Seattle for a while, I think. Any Seattle folks here ever use it? Or their grocery service?

I paid for Prime by forgetting to cancel after the free trial. I noticed it as an $80 charge on my credit card. But it paid for itself in a few months so I’m not minding it at all.

My wife and I were talking about getting Prime this weekend. The $80/year sounded pretty steep considering – things that we get from Amazon don’t really need to get to us within days and I almost always choose the “super-saver” choice when I can (free shipping, but usually 5 to 10 day delivery times).

But doing a little research on our habits, it looks like we ordered about 30 separate times from Amazon in the last calendar year (not including digital stuff), and were only able to choose “super-saver” on about half of those. If we had Prime last year, we would have saved about $20, it looks like, AND gotten stuff much, much faster.

So I’ll be signing us up the next time I order something.

Keep in mind that (I am almost positive on this) the overlap between FSSS-eligible items and Prime-eligible items is almost 1:1. If you’re routinely ordering from 3rd party vendors who don’t employ Amazon fulfillment services, Prime won’t help.

On the other hand, if the only thing keeping you from getting FSSS is cost (not routinely hitting $25 per order), then Prime will present an amazing savings for you.

And as someone else mentioned, splitting it with a family memory or something might be somewhat unethical but is definitely awesome.

If they are still available, you can usually save some cash as well if you go with any of the pared down Prime offerings that cut out the free video streaming and such and only give you the upgraded 2day shipping. Usually intended for “students” or “care givers,” I think the annual cost is half of normal Prime or so.