Why Amazon is eating the world
techcrunch.com
techcrunch.com
This is incredible. Walmart has free two-day shipping on orders over $35 right now, with no membership required, and yet people are still writing articles like this asking, "will it be possible for Walmart to get 2 day shipping within the next couple years?"
Because of the problems with third party sellers (combining different sellers into the same product page, comingling, fake reviews, etc.) it's getting harder and harder to buy stuff on Amazon, plus you need a prime membership to get fast free shipping. I've also had tons of problems with Amazon deliveries since they switched to their own logistics company. In comparison, Walmart is looking better and better by the day.
This isn't some day in the future, it's now. I'm seriously considering cancelling prime and just using walmart when I need 2 day delivery.
Complain. Call Amazon customer service and let them know what you think. This benefits you in the short term (they'll pay you for your trouble) and the long term (enough complaints, even Amazon will respond).
Hint: the answer is no.
Heres another example(s):
http://www.orensmoneysaver.com/2016/03/amazon-and-mysterious...
>I sent in 14 [items]. 14 were received, 1 was lost and 1 was found. How many should have? 14. How many does Amazon say I should have? 11. How many units do I actually have? 9.
I stopped selling expensive items on Amazon. Every single time I listed one I got 10+ messages a day from scammers. I reported all of them to Amazon but their report button seems to go to /dev/null. They just don't care enough to filter out the obvious scammers. I then got my seller account dinged for marking too many messages "no response needed." So I got dinged for not replying to scammers.
Here's another take on some of the unresolved problems with scammers on Amazon and why it's not taking action
https://www.forbes.com/sites/wadeshepard/2017/01/12/why-amaz...
[1] https://www.inc.com/sonya-mann/amazon-counterfeits-no-starch... and https://www.inc.com/sonya-mann/amazon-fraud-scam-sellers.htm...
When they used DHL in the US, I complained about how bad DHL was for a few reasons. I was told that they would log my complaint, but there was nothing they would do until enough complaints had been logged.
A few months later, Amazon no longer used DHL. (At least in my area.)
So it does matter if you complain about their systems.
If you can't communicate your product well enough to the customer then the product effectively doesn't exist as far as that customer is concerned. This is why sales and marketing are really important to a startup.
Maybe the problem with Walmart is they have a toxic brand for a certain market segment. Even with free same-day in-store pickup, I would still use Amazon's two-day shipping in order to avoid going into my local Walmart.
https://www.walmart.com/cp/free-shipping/1088989
There's also ShopRunner that comes free if you have an American Express card. You can use ShopRunner at a bunch of places like NewEgg, Drugstore.com, PetsMart, and more. Free two day shipping.
I currently live in a small mid-Atlantic town, and shop at Walmart for groceries because the nearest Target is 30 minutes away. Sure, there's some annoying customers sometimes with monster trucks or T-shirts with guns on them, but I don't feel like I'm going to be mugged. When I lived in northern New Jersey, that's exactly how I felt, so I didn't go to Walmart if I could help it. (But the nearby Target was great, so that's where I shopped for that kind of stuff.)
I remember Amazon's policy, like millions of others, because of a little shot of dopamine in my 20s. Amazon was the first to do it; we all discovered it and it seemed like a bit of the future.
I've used Wal-mart shipping, but couldn't tell you what the policy is, because it didn't strike me as new or unusual when I ran across it. I'm not sure you can communicate out of that hole in my cohort.
(Now, you might change my behavior if you convince me that Wal-Mart is better about weeding out counterfeits; that's new information).
I wonder if I can order a Bagster on Amazon? Ayup!
> I'm just as guilty as anyone
> trying to get better
> trying
Do as I say not as I do?
Nothing? Lots of things I buy make me happier.
The stuff I buy that doesn't make me happy is often stuff that I need anyway (like dog food and toilet paper).
Maybe it's just me but I can't imagine getting a shot of dopamine from paying money to shop. $80 is pretty pricey at that.
I either upgrade to 2 day if I need it earlier and if I don't I'll use the saver shipping and get it in a week.
Do you not understand the appeal of any membership service? Costco is the same idea, for example. Or gym memberships, etc.
Remember that way back when it was business as usual to pay $10+ for shipping if you bought online. This meant that if you bought online more than 4 times throughout the course of an entire year, you were ahead. It also allowed you to buy at any time without worrying about the minimum purchase total, increasing buying frequency.
As a student, I could take a $40 cab ride, or spend all day Saturday on train schlepping a shower curtain from Bed Bath, music from Best Buy, and a cheap dorm fridge from Wal-Mart. Or I could order it from Amazon at competitive prices, and it showed up on my door step in two days. Amazon was the equivalent of finding entire extra days in your schedule.
(Note, Prime came later. The original magic was two-days, $25 minimum, no membership.)
This sounds like the way we talk about other nations developing nuclear weapons.
Even used products aren't cheaper on Amazon. Ebay's usually cheaper (and, these days, maybe more trustworthy) and for books in particular both Abebooks and Alibris are usually cheaper, even with shipping, and sometimes way cheaper—which is weird, since Abebooks is owned by Amazon. Blindly using Amazon is a great way to be ripped-off. One cannot trust their prices or products, at all. Even non-tech-savvy relatives are starting to catch on that whole categories of products ought not be purchased on Amazon, ever.
My goto is http://camelcamelcamel.com
So I bought it from Amazon.
On the other hand, sometimes that $7 Amazon item would be a $3 item at CVS or some other store and you really are paying the full cost of shipping, it's just hidden from you.
Has there been a quantitative change, too?
Meh. Amazon does that to me (yes I have Prime) ~1/4 of the time too, and I don't live in the sticks. They also don't use any of their weird non-FedEx/UPS/USPS handlers here. "2 day shipping" becomes 4-5 business days. At least if Wal-Mart does it I haven't paid a membership fee for the privilege.
"Sorry it didn't work out, here's a coffee!"
I mean, by what standard of "business practice" is this "horrible?" Keep in mind we're in an era of exploding conventions.
AFAIK in Berlin there are multiple choices available. It seems that almost every discount brand and Kaufland have delivery service. As my German is pretty weak I can't find a comparison between them. I think that probably Lidl and Kaufland should have the widest assortment.
Could anyone tell me their opinion about all these?
EDIT: I found a comparison: http://www.bild.de/ratgeber/leben-und-wissen-verbraucherport...
Having a competent PR department matters a LOT in business.
Amazon don't currently do this where I am; if they did I'd use it a lot more.
I'm amazed more couriers don't offer the same service, because it is really good.
Honestly, many people don't care exactly when their parcels arrive -- they can order it to work, or their concierge/front desk can hold it, or it can be left at their door/porch. And if you care about this sort of thing, it may be just as economical to move into "luxury" apartments that provide this sort of perk as it is to pay for something like BufferBox that provides a proxy of it.
Come now; choosing where to live is a complex balance of pros and cons for most people, I can't imagine many having this anywhere near their list of priorities.
i buy a TV at a random retailer. the tv breaks. i need to take the TV there, they send it to the manufacturer for repairs, 6 weeks later i maybe get my tv back.
a tv ordered at amazon breaks, they collect it, bring a replacement and deal with the problem themselves.
for me, and a lot of other people, amazon has quit competing on price. we buy there for the convenience, not because its "cheap".
shopping at amazon is seamless. even when you order something and then dont want it. i dont have to accept the package and then send it back, i just tell the postal person that i dont want it, they return it, amazon accepts that as a return and ships the money back without asking questions. not probing questions. they just dont ask. they do the thing i expect them to do without even bothering me with an email. it doesnt bother me at all. thats whats so good about it.
i get that thats first world problems. but hackernews IS about spoiled software engineers being spoiled.
amazon has this weird concierge service built in. it just works for me.
What sort of concierge service is Amazon providing you?
True, but I see that as a strike against Amazon. I was really pissed off recently when I found Amazon were selling the DVD/BD of a popular recent movie as a Prime exclusive; non-Prime customers can't buy it from them at all, unless they want to roll the dice on that wretched hive of scum and piracy which is the Amazon thirdparty market.
If Prime becomes effectively unavoidable, and Amazon's sticker prices get to amortize the Prime fee as "discounts", then they no longer have much of an incentive to compete on true price. As a customer, that's not even a tiny bit compelling.
Doesn't Amazon use shared inventory between first party and fulfilled-by-Amazon third party sellers, so that the first party market is potentially as much a hive of scum and piracy as the third party market. I'm quite sure that's been raised as an issue many times with regard to counterfeits.
For a good example of this, look up reviews on CR2032 coin cell batteries sometime. In a nutshell, regardless of which brand you pick or who you buy from on Amazon, it seems you're very likely to get re-packaged and possibly counterfeit goods.
Look at the do a search for amazon comingling and look at the FBA forums
In recent years I've found myself swinging back towards buying things in brick-and-mortar shops, mostly because the delivery experience can be so horrible. Maybe things are better in the US, but in the UK getting things delivered is non-trivial when you work during the day, and even if you're at home, it's very common for UK postmen to not bother even bringing your parcel with them; they just leave a "while you were out" card forcing you to arrange redelivery. Delivery woes of various kinds have been a staple of /r/britishproblems since the start.
Just as much, my own experience of Walmart's brick and mortar stores has been stuff of such low quality that it's effectively expensive even at their low prices - a place only those who are desperate would shop at.
And that's thing. Walmart has a huge PR hurdle to overcome because it's Walmart. Sure it has a huge base of customers but it also has a huge base of un-customers, of people would never, never touch the place.
So here, it's a lot more than whether they have X feature.
The "without worry" part is maybe being optimistic. There have been a couple of previous hacker news discussions on the problem of counterfeit goods being sold by Amazon. The problem here is that if there are counterfeit goods being sold by a 3rd party, you might get them even if the product listing your ordered from says that it is sold and shipped by Amazon. Amazon co-mingles goods from Amazon and third party sellers unless the third party seller explicitly opts out of it (which costs more money for them and someone selling counterfeit goods has every incentive to co-mingle their goods with others). I don't think I have run into counterfeit goods, but others claim to have:
Part of this also is that Amazon has very generous return policies. I feel pretty sure that if whatever I buy is generally bad, I can return it. In fact, I have a highly neurotic friend who returns thing constantly to Amazon and is generally able to do so.
As to counterfeits. for the consumer, this only matters if the quality is unacceptable (which reviews and returns take care of - at for me). For copyright holders, it's problem but that's what courts are made for.
That is the problem here with Amazon. With comingling of products, it doesn't really matter what the reviews say since even if it says sold and shipped by Amazon it could be from a shady 3rd party merchant with counterfeit goods. A counterfeit battery will hopefilly just have a shorter life than expected, but if it something you consume, it could be worse and you may or may not be able to tell if it is fake. I like the convenience and selection of Amazon, (and have been a customer since they started) but until they stop this comingling, I feel I have to be a little more careful what I buy from them.
Thus, if I were in Walmart's position, I would be spinning out separate companies potentially rather than even doing M&A to try to capture the market because I'm not sure if jet.com is really going to undo the damage.
About a decade ago when I was at HP one of the senior executives in the personal computing group was talking about how he demoed a touchscreen computer and people were pretty impressed and asking when it's going to be out and he was disappointed that nobody knew that HP had already released it. Combined with a completely unfocused company direction, anemic marketing budget, and continued obsession with trying to squeeze more money out of legacy markets (like most traditional enterprises TBQH) HP's reputation as a low end commodity OEM with mediocre software in the consumer verticals has been quite solidly imprinted and little will change that perception without clear, obvious direction change to consumers. And few businesses (and more accurately, their board of directors) have the guts to do that.
Nah, that's limited to upper middle class millennial who can afford to "buy local" and buy fair-trade coffee. If you walk into any Walmart in the country you'll see a lot of millennials shopping there because it's cheaper (and in a lot of places its essentially the only store in town).
The PR stuff still stands, the swipe at millennials is as unrepresentative as you said it was.
Because Amazon's is called Prime and is described as "free shipping". You can tell your friends about it!
"Oh man, have you heard of Prime? You have to get it. It's free shipping on everything!"
Wal-mart's doesn't have a name and is described as "two-day shipping included if your order is over $35."
There's no equivalent quote because I'd probably never mention that to a friend.
>This is incredible. Walmart has free two-day shipping on orders over $35 right now, with no membership required, and yet..
I think the key word in the original article is "profitable", not just 2-day delivery.
> So let’s imagine Costco is selling a pack of 10 bags of Doritos for $10 — or $1 per bag. Amazon’s algorithm notes that one bag is $1 at Costco and, in turn, lowers the price on Amazon of a single bag of Doritos to $1.
> That is a great deal for customers — something that is likely driving the decision at Amazon, where an obsession with customer value dominates its strategy.
> But now, Amazon is selling individual items at Costco prices while not getting the same wholesale price that Costco enjoys. In short, it’s going to be really hard for Amazon to turn a profit on those goods.
[1] https://www.recode.net/2017/3/30/14831602/amazon-walmart-cpg...
So, I better really want whatever that thing is, in order to put up with the current insanity of dealing with them.
And you nailed it, it's becoming impossible to actually shop on amazon. It's filled with products that keyword stuff titles, are blatant knockoffs, etc.
The other thing is, can Walmart do same-day delivery?
Since shipping is the main cost driver here, Amazon is unlikely to offer you such an advantageous a-la carte deal.
I think setting up the infrastructure for 2-Day shipping is harder than the merchant backend for supplying you with items to ship. Of course, Walmart already has 2-Day shipping on selected partner reseller accounts via the marketplace, so I'm not sure why you think they don't already have an FBA equivalent -- they're just smarter than Amazon about brand protection.
Which is what Amazon has blundered on, badly: they've created a lot of "Day 2" features that are clearly anti-consumer and it's tarnishing their brand, even as many of their metrics look good. Further, they've taken on a lot of the same anti-employee and anti-small-merchant measures that people dislike Walmart for.
That behavior loses them their real moats: customer trust and behavior distinguishers. If Amazon is just a Walmart with the reputation of AliExpress, why wouldn't I just buy off WalMart's website?
Can you clarify what this means / give some examples of what you're referring to? I'm not sure what would a consumer-facing day 2 feature would be other than returns or shipment tracking, which I think they handle well--but I also just learned the term after looking it up upon reading your comment. :-)
Returns and shipping aren't "Day 2" features necessarily -- they can be part of a "Day 1" company.
Rather, my complaint is that Amazon has created programs like Fulfilled-by-Amazon (FBA) and Featured-Merchant-Algorithm (FMA) that are poorly implemented and anti-consumer:
1. Co-mingled inventories are a fundamentally anti-consumer feature, because they violate consumer control and mean that bad actors can impact the experience of buying from good actors, which undermines consumer trust. The only purpose it serves is simplifying the logistical problem for Amazon. The reason Amazon thinks this is a good idea is because they have converted to data-as-proxy thinking, where they no longer holistically understand consumer needs, they only optimize proxy values like delivery speed. The whole feature reeks of abandonment of Amazon's leadership principles [1] in order to optimize performance metrics. That's "Day 2" thinking in a nutshell.
2. The FMA is similarly problematic because of the fact it essentially hides a vital decision about purchasing from the consumer, and forces buying on Amazon to feel adversarial -- I have to doublecheck that Amazon isn't sending my business to a fraudster and they make it hard for me to control that, except for a small box I have to check every time. Here, Amazon failed to advance the market with new and innovative consumer tools that would allow customers to help police the market (eg, by crowdsourcing an optional fraudster blacklist). That kind of "Well, the data tells the whole story, let's just optimize our metrics" with opaque algorithms is a very "Day 2" way of doing business -- a failure to innovate is stagnation.
I could go on about these for a while, but the entire design of the Amazon marketplace is a stagnant mess -- it's no longer innovative, and their reliance on optimization to metrics has allowed people to game them, turning it into a quagmire of people trying to cheat the system (counterfeit, bought reviews, etc).
Amazon is devolving into a mess of their own making, by operating in a "Day 2" paradigm, rather than innovating solutions to hard problems.
[0] https://www.sec.gov/Archives/edgar/data/1018724/000119312517...
Amazon didn't invent the 3rd party warehouse idea. They were just the first 3p marketplace to offer it as an added value service.
For comparison, your average Wal-Mart distribution center has ~100k SKUs and one 'user' (Wal-Mart).
> For comparison, your average Wal-Mart distribution center has ~100k SKUs and one 'user' (Wal-Mart)
You seem to be deliberately comparing apples and oranges here.
You claim Amazon has 42 million Prime-eligible SKU's, and them compare that to how many SKU's exist in an average Walmart warehouse... forgetting that Prime-eligible SKU's don't all reside in Amazon warehouses... a 3rd party seller can warehouse that inventory on their own.
You also don't state how many warehouses Amazon has, nor the average number of SKU's in their warehouses, nor how many warehouses Walmart has, nor account for Walmart stores that serve dual purpose as warehouses. That makes your comparison useless, really.
At a point, it becomes sub-optimal to store more SKU's in a single warehouse, so they open a new distribution center and shuffle products around based on expected demand in the region (closer warehouse to the customer means faster delivery at less expense).
I'm not trying to be rude, but I think you have a misunderstanding of how third-party Prime eligibility works.
Virtually all Prime-eligible SKUs reside in Amazon's warehouse. That's how the FBA program works. There is a very new initiative called Seller-Fulfilled Prime (where the inventory resides in the seller's warehouse), but this is an extremely small percentage of the 42m SKUs.
I work for a distributor and e-commerce retailer... we've been involved heavily with Amazon (both AFN and MFN) for about 7 years... I'm intimately familiar with how Amazon, Prime, FBA, et al work. Of course it's impossible to know everything about what Amazon does... but I am in the trenches, so to speak.
> There is a very new initiative called Seller-Fulfilled Prime
That's not new... it's been around for years. Big retailers have been doing it for a long time, as they already have their own fulfillment network (see my original post regarding companies that do nothing except fulfillment). It was invite only for quite some time... perhaps that's why you thought it's new.
Another thing you're not accounting for, is of the claimed 42 million SKU's in the Prime program... the overwhelming majority do not sell. This became such a problem, Amazon had to start charging for "dead stock" to motivate sellers to remove dead inventory or not send "slow-movers" in the first place.
You also didn't account for Walmart's drop-ship vendor program. Walmart will take an order, and you drop-ship it on their behalf (Walmart being your customer, not the individual making the purchase). Walmart doesn't need to store all the items in their warehouses...
Amazon has a similar program, but instead of you drop-shipping the items, they buy them from you up front and you ship the inventory to Amazon.
All this doesn't say Amazon's warehouse logistics aren't impressive... because they are... but the FBA mechanism is not something special, and it certainly can be replicated fairly easy (and already has been for the most part). What is unique is the fanfare Amazon receives for every new warehouse that's opened... most companies just open new warehouses as business-as-usual sort of things... no articles are written about those things.
I don't think they're suggesting that Walmart will inevitably overtake Amazon in e-commerce any day now.
If it were that easy Walmart would already have it. FBA has been around for a decade. Walmart still doesn't have anything that comes even close to it, despite having an incredible dev team (Walmart Labs) a ton of money AND the distribution network to make it very feasible.
As an example, I found myself in the market for a laser cutter recently. Consumer entries start in the low/mid 4-figures, and Glowforge doesn't appear to be right around the corner. So I figure, the best bang-for-your-buck option is to buy a cheap Chinese model and swap out the cruddy bits.
Now where am I going to get a cheap Chinese laser cutter, a nice open-source CNC controller board, and if things go hooey-shaped, a more robust power supply, ventilation, and/or cooling system? Walmart?
No, the alternatives to something like that are more along the lines of ebay. The turnaround time would be significant, and I'd still have to vet all of the listings I consider to hopefully avoid fakes. Ditto for AliExpress, and double for TaoBao. Amazon offers prime shipping on most of those items, though, and they have a decent returns policy to boot. The breadth of their catalog is nothing to sneeze at.
Seems like Walmart should consider buying eBay if they ever want to compete.
You'll quickly notice that it's not a terribly good laser cutter, although it does come with the 40W necessary to be one and can be upgraded further. There are a variety of upgrades you'll want, but if your budget is $1K, the laser cutter itself will cost you less than half of that; they run $400-450 on ebay.
So if this were a Top Gear challenge, you're sitting pretty to improve your cheap lemon with your remaining cash:
* The default controller only works with Windows and the software it comes with is likely pirated. If you're used to working with 3D printers, get a RAMPS board and put Marlin or something on it. There are a few guides for going from there to more open control software, or even running off of an SD card with no PC.
* Ventilation. Apparently the stock fan doesn't fit that well, and there's no system to blow debris off of the bed when a cut is in progress. That could be a fire hazard and/or bio hazard since the dust from stuff like acrylic is not good for you.
* Cooling. It's water-cooled, with a small aquarium pump that you stick in a bucket of water. It looks like that's probably fine if you aren't going to run the laser constantly, but you could always get something with more flow.
* Some users say that you should ground the metal housing manually with a thick strand of wire. That's a mildly worrying piece of advice.
So it sounds a little hair-raising, but all in all it seems like a manageable risk, and the price is right.
In the end it didn't really help them when Amazon came along.
Same day delivery on TMall like buy in morning get in afternoon was available 6 years ago in China. Now you can fly oysters from New Zealand, cod from U.K. and delivered to your home in 24-48 hours in China also 5 years ago. Amazon still has miles to sprint before it reaches there.
I've cancelled my prime membership and use a variety of sites now, and I couldn't be happier.
If anyone can derail Amazon at what most people need, it's Walmart. Obviously, WalMart isn't a tech outfit like Amazon, but with a few choice acquisitions (e. g. Jet :), and ramp up time, they will certainly have Amazon wondering what hit them really soon... Walmart needs to do a better job of advertising their online offerings though.
Free shipping on orders over $35 is useless in the same way that I find Amazon Prime Pantry useless. If I am trying to buy something, I don't want to fish around finding something else to get my order up to the limit. It's a ton of friction -- "do I need to add a pack of socks to this order or should I just pay shipping" -- when with Amazon I just order that book I saw mentioned on Twitter and don't think about it.
I wonder how long it will take people to see this, but Amazon prime really isn't the proposition it once was. If you ask any Amazon employee they will tell you that you get free shows, music, books, etc. But I just want my orders to show up at my doorstep in two days. As you said, this is incredibly hard to do with Amazon prime in its current state.
It's a compelling point.
Amazon are ruthless entrepreneurs, making every deal they can. If someone else opened up their internal services, nothing special will happen.
Making your distrubutors fill your warehouses without paying them, since you have relabled the business relationship and adjusted the margins somewhat, and getting away with it because you more or less own the market - that's the sort of deals you need to make.
If there were a drop in replacement for EC2 that didn't force me to use EBS for root, I'd switch in a heartbeat, but because of vendor lock-in, EC2 doesn't have to compete on quality, features, nor cost. It's simply because switching is (currently) too expensive. This is a feature that I, a customer, wants; the reason I want this is besides the point. To borrow from the auto industry, you can have use root, as long as it's EBS.
Pretending Amazon doesn't use vendor lock-in to it's own advantage like every other company, and thinking that it really competes on quality, features and cost ignores the huge inertia of saying on what works.
Private, back-room, "don't tell anyone else I gave you that good of a price"-type enterprise sales tactics for "at-scale" pricing don't engender trust either. Great for business; not for encouraging competition.
Defeating vendor lock-in requires the development of sound cloud-resource primitives, and probably some regulation on part of government to not pay egress costs when switching to a competitor (since the high cost of moving your data to another cloud is anti-competitive). But nobody has come up with decent primitives because, you know, if AmaGooSoft don't need multi-cloud architectures for high availability, then why do you think you do? And government won't step in because none of the regulators understand how any of this works.
verticalization is tantalizing for the promise that you can (1) capture existing value surplus (profit) and (2) consolidate services to reduce costs further. this gives you more operational margin to work with.
but as the author says, often stagnation and complacency swallow those savings over time. so then, rather than a value chain service being locked into a single customer, amazon makes internal services compete externally, and prove their value financially as well as operationally. not only that, but those services must keep pace with industry innovations to remain competitive over time.
this reminds me of the case of the chinese refrigerator company haier remaking itself into a global consumer electronics brand in part by implementing an internal market value chain mechanism to ensure a similar competitive instinct. each step in the value chain (down to the person) was evaluated for the value they produced and rewarded accordingly.
people derive more satisfaction and work harder in a more competitive environment, although you can go overboard and end up creating a cut-throat one instead. as always, balance is key.
https://plus.google.com/+RipRowan/posts/eVeouesvaVX
People still haven't gotten the message?
(edit: oops, it's even linked in the post)
Did this guy just say FBA is impossible to improve? Is this a comedy piece? FBA is garbage, we (third party sellers, at least me) only sell on FBA because that's where the customers are. FBA is like an abusive boyfriend you can't get away from. Sure, Amazon will reimburse you when they lose your inventory (which they will do, very often) but you have to watch your inventory like a hawk because they won't tell you your inventory is lost. That's assuming your shipments even make it into your inventory in the first place after arriving at the wearhouse. Ive heard of big time FBA sellers having to hire someone to do nothing but resolve inventory discrepancies full time. Seller support barely speaks English (unless you can get a supervisor, which I was able to do once by making enough of a stink) and doesn't understand what your problem is. Of course they take 3 full days to not resolve your issue. No legitimate seller commingles inventory anymore because then Amazon will send out counterfeits to your customers. It absolutely WILL happen to you at some time if you are commingling for enough time, no exceptions. Then you have to hope Amazon doesn't kick you off their platform for their own incompetence.
They're saying FBA is possible to improve. You missed the isn't.
Maybe VR can enhance shopping experience. Sounds like basic research though, so not a competitive advantage yet.
Looking at internal organization is great, but again not a competitive advantage. Every org should be reviewing internal structures and efficiencies.
Your friend likes Walmart better than Amazon. I'm sure for valid reasons. But it's a third hand anecdote at this point without any details.
"Anything Amazon does Walmart does the same thing" seems disingenous. Their cost structures are different. The customers are dofferent. There be different strategies in pricing. Some will be copied, but Walmart can't copy Amazon's pricing models wholesale.
"Customer service is going to be...in 5 years"... Maybe. Maybe not. Why hasn't it happened yet? What has changed? Will this new directive overtake whatever cultural forces led customer service to be what it is now?
I'd be interested to see some analysis that goes deeper.
... as we raise our costs to service the dwindling market of "people without a computer and stable home address."
It is astonishing that Walmart HQ still thinks that the internet is a fad. No person with a viable alternative desires to visit a physical Walmart store. It takes time, requires overcoming a variety of frustrations like traffic, parking, bewildering store layouts, and then you never know if the item you want will actually be present at the location. Compare clicking a button and having the item delivered to your door.
> Walmart will never die
The truth is that Walmart is already dead. They are too far behind to ever catch up, and it is clear that "HQ" thinks that bolting an "e-commerce solution" on to their existing systems will keep them competitive, when in fact the entire organization has to be rebuilt from the ground up to even have a chance. That isn't going to happen. Walmart will soon be joining Sears and Blockbuster.
No, they really don't ...
Consumers Are Now Doing Most of Their Shopping Online, June 8, 2016.
http://fortune.com/2016/06/08/online-shopping-increases/
> you are underestimating how quickly those things can turn around in a massive company with tens of thousands of people working on the problem
I know exactly how an aging, entrenched bureaucracy rewarded for in store sales will react to a new online bolt-on that will "steal" their sales. Ongoing sabotage that cripples the upstart. Very few companies can make transitions like this where a new part of the company must cannibalize the old. Walmart has shown no evidence of even recognizing the kind of transformation they need to make.
>The survey, now in its fifth year, polled more than 5,000 consumers who make at least two online purchases in a three-month period. According to results, shoppers now make 51% of their purchases online, compared to 48% in 2015 and 47% in 2014.
1. They're only polling people who make online purchases.
2. Not sure how the 51% figure is computed.
You likely haven't been to too many Walmarts, especially in rural areas without a real Main Street / town square. People congregate there and eat at the food court or just hang out. Being able to get an item immediately instead of waiting two days is convenient. Most people don't buy a specialty item, they buy conventional merchandise that is more or less guaranteed to be in stock. Many communities have Walmart as their exclusive grocery store.
The complaint about traffic and parking (Walmarts have ample parking in all but the more urban locations!) shows that your perspective is that of a large city with ample public transit, not the more representative American locale. There's no Walmart in Manhattan, but there are two just over the bridge in Jersey. Most Americans live in a semi-urban, suburban, or rural place.
Even when your order is "shipped and sold" by Amazon it can still be bogus because amazon mixes the 3rd party seller parts into the pool.
I got shipped a clearly inferior 3rd party generic version of what I ordered. Amazon took it back, but support could not guarantee I'd receive what was presented on the website. I ended up buying it for slightly more from a brick & mortar just to guarantee I at least got something branded correctly.
This is only going to get worse until Amazon is no different from ebay for garbage. With my recent experience, "shipped and sold by Amazon" is a meaningless distinguishing marker now if 3rd party sellers are involved in selling the product.
I'm moving and need to buy things to replace what I used to share with roommates in the kitchen (various utensils and tools). It's become extremely difficult to answer a simple question like "what's the best cooking utensil set?", due to shitty third party products, unclear descriptions, incredibly polarized reviews, and sponsored items taking the "top" listings.
I needed maybe 5 different products, which I reflexively assumed would take maybe 15 minutes of clicking around, but instead it took almost 90. Ironically, I would have been better served popping over to the Target around the corner, where at least I can see the size / quality of what I'm buying.
Amazon has a "problem" with private labels. It's so so so easy for Joe Blow in Kansas to create a private label product and get it shipped directly to Amazon's wearhouses. So Amazon is overrun by them, which makes it difficult to find anything in the mess. On top of that, since most listings are created by third party sellers, listings vary in quality and can be very inaccurate. All this makes it close to impossible to compare items. Top it off with Amazon's sorting feature being entirely broken, it can really be a mess to try to browse. eBay actually offers a better UI in that regard.
It was pretty short sighted on Amazon's part to let this happen, IMO.
Amazon actually CAN improve in this regard, all they have to do is require third party sellers to complete the listing and also have a human review the listing for quality and accuracy. Just that small step would improve the customer experience drastically.
With all that I don't really understand why people still use Amazon anymore other than out of habit.
Yes Amazon is a great company and productizing all these different parts is an excellent idea. I agree that it is their most important moat.
But Amazon is astonishingly mediocre at one key task: Helping customers find, select and configure what they want.
Amazon is not a good fashion retailer. Amazon is not a good electronics retailer. Too much information is missing or incorrect, the product range isn't nearly big enough, configuration options are almost non-existent and there is zero innovation on the presentation side.
In other words, Amazon is not a good specialty store. It's actually a pretty bland supermarket when it could be so much more.
[1] Though it makes sense after the acquisition of Zappos that they didn't want to have 3 shoe stores. Or does it? You'd think running a separately branded web front-end would be cheap.
After wasting several hours of my time dealing with the (often unresponsive) customer support of these suppliers I tend to order most things on Amazon even if the price is slightly higher, as I know that the delivery speed and customer support will be outstanding.
I find Costco on-line to be a very credible Amazon alternative. Costco now fills the niche that Amazon did 2 years ago.
However later paragraph says:
> The key advantage that Amazon has over any other enterprise service provider – from UPS and FedEx to Rackspace – is that they are forced to use their own services. UPS is a step removed from backlash due to lost/destroyed packages, shipping delays, terrible software, and poor holiday capacity planning. Angry customers blame the retailer, and the retailer screams at UPS in turn. When Amazon is the service provider, they’re permanently dogfooding. There is nowhere for poor performance to hide.
Doesn't it contradict earlier point?
What he's saying is that all services Amazon provides are going to have both internal and external customers. Both will drive the service to be better, and never get complacent.
External customers will signal that the product sucks by not being customers of it. Internal customer will force the product to be reliable because if it isn't your director will hear about the costs of it not being so.
Bias: 5 years at Amazon. May someday go back if the startup I joined falls.
By the way, it’s not just that Amazon prevents its divisions from becoming ‘fat and inefficient’ by opening them up to external competition. Crucially, thanks to commoditising early and getting tons of companies to use its platform, Amazon can now see how others innovate on top of it (having low-level access to consumption information) and quickly follow on anything new, basically innovating but without risky R&D of their own[0].
[0] Simon Wardley wrote about Innovate—Leverage—Commoditise (ILC) approach here: http://blog.gardeviance.org/2014/03/understanding-ecosystems...
I’d also recommend his book (https://medium.com/wardleymaps/on-being-lost-2ef5f05eb1ec) and the intro to value-chain mapping (http://blog.gardeviance.org/2015/02/an-introduction-to-wardl...). It’s not about Amazon per se, but it helped me personally understand the strategy.
By having two customers for a service, at least one of those external to the organisation, competitiveness is kept in focus.
With purely internal processes: Your time sheet software is probably terrible, but have you ever mentioned it to the people writing it?
On the other hand customers will have a very loud voice if the delivery is to late, and you have process setup to listen to them.
No matter when Mr. Bezos said this, there's slowly growing awareness of the mistreatment of workers, engendered by shockingly low prices, with Walmart the posterchild for businesses being horrible within the confines of the law. Things like scheduling workers for 39 hour work weeks to not qualify them for health-care, or driving suppliers out of business because they can, all in the name of "it's only business". On the other end is various ethical sourcing standards like Fair Trade, which originated long before Starbucks picked up on it.
But there are also predictions: "Amazon’s lead will only grow over the coming decade, and I don’t think there is much that any other retailer can do to stop it."
The author is tunneling on one thing Amazon does. He will escape accountability for his boldness because nobody will remember this article at the end of "the coming decade." If he's right, he can drag it back out and say he called it. Otherwise, no harm.
Conventional wisdom is to focus on your company's core product, don't overreach. Amazon is succeeding by focusing on everything.
Conventional wisdom is that growth in technology is in cloud technologies. Musk is succeeding by focusing on meatspace infrastructure.
Then they expanded which many businesses do.
Musk is a bit different.
Because so many competitors and potential competitors use AWS, they have many opportunities to undercut their own customers and introduce competing products with lower costs, because they're using their own services. They can simply look at their fastest growing customers scope out their system architecture and duplicate it.
Amazon Video vs Netflix being the prime example.
My wife won't shop there "because Walmart". It isn't rational, but it's a thing.
Edit: to clarify, my wife won't shop on the walmart website. The physical stores are a different topic.
I would try it with some higher-end stuff first, relying on the same distribution system and then slowly moving the most popular online purchases over to it to ensure that the "walmart" feel is eliminated. I'd focus on a high end "organic produce" feel to the website.
Target did something similar with it's "Up&Up" store brand stuff, and they have done it with clothing lines as well.
The hard part is Walmart admitting to itself that it's image, particularly on the wealthy, online-shopping coasts, is not universally good, and slapping a wally-world star on things is going to drive a lot of good customers away.
The checkout lines are also usually 2-3x as long as Target, no matter how busy or not-busy it is (they more aggressively cut employee hours to the bare minimum required to function, I'd guess).
None of those apply online, though.
(which I understand means they aren't offering high enough pay and so on, but the staffing levels they maintain are an interaction of multiple factors, customer traffic, pricing expectations, etc., not just arbitrary cutting of hours)
Why isn't that rational? She must have a reason.
Just because you can quantify why you feel that way doesn't make it rational. I don't like spiders because they look scary. I've never been bitten by one or even threatened by one, but I still don't like them. That's an irrational fear, even though I can tell you exactly why I don't like them. If you don't like Walmart because of its customers or staff, refusing to shop online with them is irrational.
Yes, but why is the name association producing an aversion in this case?
If it's simply a matter of not wanting to support a company you find ethically dubious for example (which would perfectly describe Walmart), then it would be perfectly rational to want to avoid it and all its associated ventures.
Voting with your wallet and all that.
As the article stated, Amazon has become well known as being customer-centric almost to a fault. I am confident when ordering anything from Amazon because I know that returns are quick and painless.
Prime example: I ordered an expensive Toto toilet for my master bath remodel, and it arrived next-day for free. Even if the shipping cost was rolled into the price, I still paid $500 less than local suppliers. The contractor got the toilet fully installed the day of delivery and, during leak testing, we discovered a hairline crack in the one-piece ceramic tank. I contacted Amazon immediately and, the very next day, had a replacement Toto toilet on my doorstep and a UPS driver hauling the cracked toilet to his truck.
I can't see Walmart ever providing this type of customer support.
i'm the opposite at this point. the surge in counterfeit, or low quality chinese shit comingled with previously good listings on amazon, has pushed me to let my prime lapse after six years, and i simply don't trust amazon for things other than books at this point. maybe that's just me and the things i shop for (mostly <$50 purchases), but returning things through the mail is a fucking pain and a huge friction.
You could also read the reviews on listing for products such as the popular Yeti cooler mugs, and you'll find many people complaining about getting fakes (wrong color lid, etc.)
[1] https://www.bloomberg.com/news/articles/2016-10-20/apple-man...
*edited for minor typo
Here's one: http://a.co/iHNIttV
Some links in here: https://news.ycombinator.com/item?id=13924546
Pic used to sell fake Snuggie here: http://www.slate.com/articles/business/the_bills/2016/12/how...
Screenshot of knockoff diaper listing: http://jenniferlabit.com/2016/07/21/counterfeit-baby-product...
Knockoff phone case: https://learntogrowwealthonline.com/does-amazon-sell-fake-pr...
Examples of stolen art listings: https://www.fusionidol.com/pages/artists-unite-against-amazo... and http://theartofvikki.com/stolen/stolen.php
Fake chargers: https://www.dailydot.com/news/amazon-marketplace-conterfeit-...
Knockoff pillow case: https://www.geekwire.com/2015/amazon-to-face-trial-over-knoc...
This one is just amusing: https://the-digital-reader.com/2016/07/20/amazons-counterfei...
Mini PCs with pirated Windows license: https://www.howtogeek.com/267701/i-got-scammed-by-a-counterf...
Fake Apple chargers: http://www.iphoneincanada.ca/news/counterfeit-apple-adapters...
Fake Birkenstocks: http://www.cnbc.com/2016/07/08/amazons-chinese-counterfeit-p...
I don't think I've ever bought a counterfeit product on Amazon.
I looked through all your links, and most of the counterfeit items had less than 100 reviews and almost all couldn't even get a 3 star rating. It's pretty easy to tell that those items are counterfeit actually.
If your stuff is relatively small item things, you can use their locker system to return items. It's somewhat better than going thru the postal system or UPS or such, but you'd still have to physically go to one.
And you cant even trust books https://news.ycombinator.com/item?id=13924546
Speaking for Lowes and Home Depot -- Yes, because they view the human element of their labor as inputs in a function to get as much labor as humanly cheap as possible, circumventing as many laws as possible, to increase shareholder value and corporate bonuses. Basically they treat their people as a liability. (If I have one anecdote that basically sums up Lowe's C-levels: They treat technology and people as a cost. When we asked 49,000 dollars to upgrade a server room that was practically a fire hazard, we had to pull teeth. When it came time to spend 21 million dollars to upgrade their private jetliner so that it could make it to China in one trip, instead of having to stop and refuel, they approved the cost unanimously, almost without thought. Money that amounts to basically a drop in the bucket to make your job, a core function of our daily operations, much better? Nah. 21 million so we can fly to China faster every time the need arises to find more workers to exploit for cheap labor and then resell here in America for 90% markup? Heck yes.)
Finally, I can't speak for Target because I have no idea about them.
The common element here: People, and how you treat them.
> because you can build a business strategy around the things that are stable in time. … [I]n our retail business, we know that customers want low prices, and I know that’s going to be true 10 years from now. They want fast delivery; they want vast selection. [-Bezos]
Quality is more important than price, delivery and selection for a large, and increasing, number of goods. If you buy an air-conditioner or t-shirts you want good quality, but only need reasonable price, delivery and selection.
> Amazon will only be brought down by ... a paradigm shift in how we consume physical products
Buying clubs that focus on Quality are the future. Consumers will be freed of toothpaste brands and marketing, and instead get a cheap, effective, quality toothpaste selected by their buying club. And the club will focus on protecting the customer and auditing the manufacturer, rather than enabling marketing and an irrational focus on price.
Amazon won't be able to compete because it works against every system they've built. Instead of a variety of manufacturers, brands and sellers, buying groups will go down the path of vertical integration: work closer with manufacturers ignoring brands and marketing, buying manufacturers to reduce costs, internalizing fulfillment, etc...
If the buying clubs are merely brand selectors, or discount clubs, or product reviewers, they can be easily integrated into Amazon systems. But if buying clubs are focused on the best product for their members, Amazon and Wall-mart (and everyone else) will have to change their business.
Wall-mart optimized for price, Amazon optimized for price, delivery and selection, but optimizing for quality is the future. (Or I'm out of touch :)
To a degree I agree with you, but buying clubs are not great either. For instance I tried out "Harrys Razors", but I only shave once a week. A blade lasts a while for me. So even with the "lowest frequency" option, I ended up drowning in razor blades.
I also tried one of the clothing clubs, because I hate cloth shopping. I ended up getting a lot of stuff I Hated.
I like the idea, but there's something to be said for "buying what you need when you need it".
I gave up and grew a beard.
I wish the author expanded on this.
Some are afraid president trump may EO the postal service in some unheard of way...which favors businesses that rely on last mile delivery
I wonder if the author was referring to delivery franchising?
[2] https://logistics.amazon.com/
[3] http://www.seattletimes.com/business/amazon/amazons-delivery...
After all the USPS has been in that business for 200 years and not too many people are bullish on them. Why would Amazon getting into that business be good for them?
Wouldn't he have to get around this part in some manner (I may have misread your comment - particularly what you meant by "EO")?
He could possibly eliminate the monopoly the usps has on the mailbox and the monopoly on first class mail.
In reality nobody (the majority) don't need mail 6 out of 7 days. Not even 5... Or 4.. Informed delivery is telling people "i dont need to go to the mailbox today." so delivery frequency may be looked at again.
The broader concept is their willingness and ability to keep improving the user experience. And that is something they have in common with many market leaders.
You could as well look at Google, Booking.com or Facebook. They did not win by inventing their niche. They won by creating a better user experience. Compared to them, their competitors user experience was and is atrocious. They built a company culture of high standards and putting the user first early on. And since it worked, they kept it that way.
A pair of earbud headphones came up in an article praising them at their price point, so myself and a bunch of other people decided to buy them. They were $35. Amazon had it for sale through a bunch of resellers, and themselves for that price.
You couldn't order any of it though, it would error out and say it wasn't available right now.
I tried ebay, and got almost the exact same message from ebay on everyone selling those earbuds.
I ended up ordering it off of a 3rd site, which was already sold out, but honored the price.
In a few days, Amazon let it's sellers sell the item again, but around 2-3 times the original price.
It's interesting how they and Ebay blocked the sale of a suddenly 'hot' item like that, to price gouge everyone who had decided to purchase them.
In my intimate circle, nobody talks about Amazon and more about a local competitor. I'm not sure if it can be generalised ( Belgium). It could be that we just aren't interesting for Amazon ofc
chuckle Very very few people who work at (or have worked at Amazon) think this. Having worked with Amazon since 1999, I have never been impressed by their technology or leadership. They have been very lucky and had to pivot. AWS allowed them to build their online marketshare, not some CEO direction. i.e. [take chances in entering new markets, fail a lot] is not a particularly insightful strategy. Many companies do it when they have the capital.
For a very tiny and solipsistic definition of "world", yes.
Amazon, for business reasons, wont commoditize some core functions, which the above website can.
Analogy would be to locked in social network vs email as an open protocol.
Also, humans are pretty smart. A year ago, people were super negative on Walmart. Target will be able to compete, and so will many others.
could author of headline be more self-centered? you know 95% of people on this planet don't live in US and most of them don't care about Amazon?
Where are you and from which online retailers do you buy?
same goes for china where pretty much nobody use amazon with their 90s website design
I don't know if Amazon has some cheap delivery here in Poland or do they ship everything from abroad.
because when i checked tablets, mobiles and pretty much anything, everything was more expensive than in local eshops, if it's Chinese phone or some noname stuff then AliExpress is the king
Interestingly, in next few months if not days, there is going be a big consolidation (merger of flipkart and snapdeal, that is first and third) which is aggressively pushed by Softbank (investor in snapdeal).
As an aside, for a long time, local entities are asking for concessions against global players like Amazon and uber, but so far it has not gone anywhere. One of the reasons against this is most of the investor money in local entities is from abroad. Though it is true, flipkart truly pioneered online market (in India) and when it tasted success, amazon simply jumped in with its huge cash war chest. It will be interesting how Indian market will play out with respect to Amazon.
OT: why Walmart don't expand to Europe and other regions?
I know about the YC Company - Ship Bob.
What are some alternatives?
Thanks!
This sums it up for me. The computing platform is the foundation of Amazon's survival. Get that right and then make it unassailable, and world domination is inevitable. In some ways, Microsoft used the same approach by separating the operating system from applications and letting each application compete on it's own. They quickly found ways to team those applications for advantage.
Amazon has the computing platform dominance, the consumer behavior data at massive scale, the delivery platform (they're buying ships?), ... they're not just after Retail, but anything that touches customer experience. FedEx is in the cross-hairs...