#amazon

Greg Bensinger:

Amazon said it is considering a more than 50% increase in the U.S. to its popular “Prime” two-day membership program to help cover increased shipping and fuel costs.

The change – of between $20 and $40 annually – would be the first in the nine-year history of the Prime program. Amazon has brought in millions of higher-spending customers through the program, which promises unlimited shipping on many items, as well as video streaming for U.S. customers.

I would have absolutely no problem paying this — that’s how much of a steal Amazon Prime is right now. And it seems like a lot of folks I follow on Twitter feel the same way.

Anonymous asked:

Amazon tried their own delivery service once. It was called Tote, and it was only available in Seattle.

A few people wrote to me about this (due to this post), I actually was not aware of it — yet, sure enough.

I do wonder if this isn’t like a Webvan situation though. You could argue that Webvan was a good idea, it was just poor execution and perhaps before its time. Now Amazon (and others) are tackling the same thing — and Amazon happens to be doing it with many former key Webvan people.

In this light, it’s not hard to envision a word where AmazonTote gets resurrected…

Laura Stevens, Serena Ng, and Shelly Banjo:

The shipping delays at UPS sparked outrage among people who had bought gifts from Amazon.com Inc., Kohl’s Corp. and other online retailers in the days and weeks before Christmas. Many had been swayed by guarantees from the retailers that their packages would be delivered by the holiday.

The official Amazon statement on the matter is interesting:

Amazon fulfillment centers processed and tendered customer orders to delivery carriers on time for holiday delivery. We are reviewing the performance of the delivery carriers.

While the drone initiative gets all the buzz, you have to wonder how long it is until Amazon starts handling more traditional shipping on its own? With fuck-ups like this one, they almost literally can’t afford not to.

Doesn’t seem like they could afford to buy either UPS (market cap near $100B) or FedEx (market cap near $50B), but maybe that’s what AmazonFresh is all about, long term.

Speaking of Amazon, here’s Jason Del Ray on some insane numbers the company is projected to see from Kindle owners:

Based on its research and analysis, CIRP estimates that Kindle owners spend $1,233 per year on Amazon compared to $790 per year for Amazon shoppers who don’t own one of the company’s e-readers or tablets. Kindle owners aren’t necessarily buying more at a shot, but are buying more frequently.

“Another way to look at Kindle Fire and Kindle e-Reader is as a portal to Amazon.com,” CIRP’s Mike Levin said in a statement. “Kindle Fire provides access to everything Amazon sells, while Kindle e-Reader has become the way that Amazon customers buy books, Amazon’s original product line.”

On the surface, at least, one could make the argument then that Amazon could potentially drop prices on the devices to get them into the hands of more people, since they become more valuable customers. But, drop prices too far and you may attract a different set of customers that may cause that spending disparity to shrink.

This, in a nutshell, is why I think it’s probably smart to think of any phone Amazon does as more of a “Amazon Prime Phone” and less of a “Kindle Phone” (even if it’s called something more along those lines). It’s sole purpose may be to supercharge Amazon sales (both digital and physical)

Alistair Barr on the impending launch of “Pantry”, a new project by Amazon to take on bulk players like Costco and Sam’s Club:

The service will be targeted at existing members of Amazon’s Prime shipping program. It will launch with about 2,000 products typically found in the center of grocery stores, such as cleaning supplies, kitchen paper rolls, canned goods like pet food, dry grocery items like cereal and some beverages.

Amazon will let Prime shoppers put as many of these items into a set sized box, up to a specific weight limit. If the products fit and they don’t exceed the maximum weight, Amazon will ship the box for a small fee.

The only thing surprising here is that Amazon didn’t move into this space sooner. This could, quite literally, be huge.

Jason Feifer:

Chaim, it turned out, was Chaim Pikarski, an Orthodox Jewish man with a wispy red beard who seemed amused at my attempt to understand his business. He also knew his Hipe speaker would appeal to me, because that insight—knowing what people are searching for on Amazon—is at the core of what he does. He has an entire team of people who read reviews on Amazon, looking for moments when people say, “I wish this speaker were rechargeable.” Pikarski then makes a rechargeable version. Hipe exists, in essence, because enough people think like me. It’s a profitable trick: C&A Marketing does “in the nine figures” in sales every year, Pikarski says, and grows at about 30% annually.

Market-research-via-Amazon-customer-comments-as-a-business. Fascinating.

Eugene Wei:

One popular thesis among Amazon profitability skeptics is that Amazon can’t “flip a switch” and become profitable. The most common guess as to how Amazon flips the switch is that it will wait until it is the last retailer standing and then raise prices across the board, so Amazon skeptics argue against that narrative possibility.

But “flipping a switch” is the wrong analogy because Amazon’s core business model does generate a profit with most every transaction at its current price level. The reason it isn’t showing a profit is because it’s undertaken a massive investment to support an even larger sales base. How does Amazon turn a profit? Not by flipping a switch but by waiting, once again, until its transaction volume grows and income exceeds its fixed cost base again. It can choose to reach that point faster or slower depending on how quickly it continues to grow its fixed cost base, but a simple way to accelerate that would be to stop investing in so many new fulfillment centers. 

Right. It’s actually more like “not flipping a switch”.

John Biggs on the new Kindle Fire HDX:

Amazon has also added Mayday, a 24/7 customer support solution that allows you to ping Amazon support people. The service is ingenious. Remote support folks appear in a little video window and can annotate your screen with arrows and even touch UI items. You can mute them so they can’t hear your discussion and block them from seeing your screen if something… untoward appears. It is a free solution to family tech-support problems, and as long as you’re online you can access the service at any time. It is, in a word, amazing.

Just to echo my comments last night, this sounds great for “normals” — it’s a remote, 24/7 Genius Bar. But I find it very hard to believe that something like this can scale. While it’s true that Amazon already has a robust customer support system, I assume these… let’s call them Fire OS Geniuses… are likely going to have to be a cut above typical support (in expertise, demeanor, and presumably pay).

And they’re just one button touch away. What if Amazon sells millions of Kindle Fire HDXs? Are they ready to have hundreds of thousands — or millions — of people clicking that button at any minute? Is there a notion of “Mayday Holding”? 

Of course, Amazon has thought about all this already. And if anyone can scale such a service, it’s them. I do wonder if this just means they don’t anticipate selling that maybe HDXs, at least at first. For now, I’ll chalk it up to Jeff Bezos’ latest brilliant chess move.

J.J. McCorvey:

So is Amazon Freight Services Bezos’s next mission? When I ask, the laugh lines vanish from his face as if someone flipped a switch on his back. He contends that same-day delivery is too expensive outside of urban markets and that it only makes sense for Amazon to deliver its own products within the Fresh program. In China, he explains, Amazon does in fact deliver products via many couriers and bicycle messengers. “But in a country like the United States,” he says, “we have such a sophisticated last-mile delivery system that it makes more sense for Amazon to use that system to reach its customers in a rapid and accurate way.” When I ask whether he would consider, say, buying UPS, with its 90,000 trucks—or even more radically, purchasing the foundering USPS, with its 213,000 vehicles running daily through America’s cities and towns—Bezos scoffs. But he won’t precisely say no.