How to Beat Amazon
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- Blatant fake thumbdrives - this entire section is thumb drive scammers using the hack that makes a drive appear larger in system info https://www.amazon.com/s/s/ref=sr_nr_p_n_size_browse-bin_8?f...
- $23 knock-off magsafes rife with fake reviews, that break/fry in days - https://www.amazon.com/s/ref=nb_sb_ss_i_1_7?url=search-alias...
- The level of chaos in shopping categories effectively prevents you from doing things like sorting by price or reviews.
In my experience, Amazon is always happy to refund on these things and chalk it up as cost of scaling, but when does it start to become too much, similar to what happened to ebay?
They are doing their best to crank down on this by increasing the quality of listings and enforcing more stringent requirements for selling products of certain brands. They also introduced additional costs and barriers for creating multiple thousands of poor quality listings rather than a few quality ones.
The fake electronics products are hurting us as well, because customers have become increasingly wary and return-happy, since they expect the quality of product to be low and returns to be friction-free, regardless of other factors.
The chaos within categories is the biggest obstacle - it is nearly impossible to solve, simply because they are HUGE and removing bad listings is an almost manual process. It has to be and Amazon certainly can't take the leap of simply starting to remove 3rd party seller listings without angering them and making them quit.
Most of the time you will get someone from a call center in India, who is very good at telling you that what you need can't be done 5 different ways.
I would imagine that once you get to a certain level of revenue, you can request to have a rep and will get more personal attention to your issues. I have no idea what the bar is, but probably at least $5 million of yearly revenue - which means Amazon makes $750,000 from you in fees.
And not nitpicking. I've had to explain these things to non technical leaders many times when they make on-premisis vs cloud comparisons.
Please let me know if there's some material that calls a hyperthread a core. On our main product detail page for EC2 instances here: https://aws.amazon.com/ec2/instance-types/ look for the text "Each vCPU is a hyperthread of an Intel Xeon core except for T2."
See also the "virtual core" information page here: https://aws.amazon.com/ec2/virtualcores/ and you will see that for most instances the core count is 1/2 of the total number of vCPUs.
Direct connect pricing for egress traffic ("Data Transfer Out") is here: https://aws.amazon.com/directconnect/pricing/. Please let me know if there is some other traffic classification that is not metered and billed as you'd expect.
As I'm sure you're aware, comparing on-premises vs. cloud is a multidimensional problem. Customer resource to help with TCO calculations and comparisons can be found here: https://aws.amazon.com/tco-calculator/. Even for a component of overall cost like network transit, not all products are created equally so a simple price comparison may not capture the whole picture.
People are constantly confused about this. It's not just me. There's very little common terminology across leaders in this space. Think VMware, Digital Ocean, Bluemix, Tier 1 cloud providers, in house data centers, etc. Some talk real cores, others talk hyperthreads. Business and non techie IT people do their own math without knowing the 2X difference.
If you put (hyperthreads) next to "vcpus", when appropriate, it would be more clear.
"Direct connect pricing for egress traffic ("Data Transfer Out") is here"
Attend an AWS sales meeting with a F500 company. It's never mentioned, even when talking about obvious problem areas...like moving a data warehouse to AWS, while leaving the ETL and analytic tools on premisis. People like me are left holding the bad news bag.
AWS sales people talk up the "all in" business case where all your stuff is in the cloud. They are suspiciously quiet about the transition period where the 10 to 100x market bandwidth pricing of AWS kills you. That's especially frustrating for AWS direct connect where your global network adds no value. In my mind, AWS direct connect should be competitive with market rates for bandwidth. I understand the premium for general internet connectivity because your global presence and investments add value. For direct connect, it's just plain old gouging. You're penalizing me for not going all-in on day one, which would be risky and stupid.
Unless your answer is "yes", it's nitpicking.
You can broaden the scope of anything and say that some specific criticism is now nitpicking.
Edit: A little off topic, but Amazon has failed in unrelated spaces before. Fire phone was a good example. Amazon is giant for sure, but they aren't infallible.
And the fact that they have failed in some verticals and succeeded in others only strengthens my original point: success/failure in one space has very little bearing on another.
I've used Amazon Fresh a few times and I've never received "fake salmon".
http://abcnews.go.com/US/fake-fish-experts-mislabeling-seafo...
> A new report released this week says recent studies have found that seafood may be mislabeled as often as 25 percent to 70 percent of the time. According to Food and Drug Administration port inspections, a third of seafood sold in the U.S. is mislabeled as one type when it's actually something else, even something cheaper.
www.google.com/search?q=mislabeled+fish+uk
Here's one I tried with "wood" and I was able to sort by price with the drop down: https://www.amazon.com/s/?keywords=wood&sort=price-asc-rank
I stripped out a bunch of the tracking and referral stuff from the url but if you click that it will take you directly to sorted results. If you go to just https://www.amazon.com/s/?keywords=wood there is a drop down to sort by price and the results don't appear to be in any specific category.
e: I think I understand now, the drop down is there but you don't get search results if you select a price filter like you do with "Relevance".
That's not fair; from the first page, I would say at least the $1400 Kingston drive is genuine, and the 512mb drive that says not 512gb, and the PNY one. Just from a quick skim and double checking other sources for the first and last.
Many of them may be as you describe, though, especially the cheap ones.
So if there is no third-party FBA seller for a product you buy sold by Amazon, you are as safe as Amazon's first-party sourcing, otherwise it's the wild west.
I wonder how many people, even people who've shopped on Amazon for years, actually realize when they buy something direct from Amazon vs a third party.
The problem with commingling, though, goes beyond that: if there are any “Fulfilled by Amazon” vendors for the same product, buying a product “sold by Amazon” does not guarantee you that the actual product you receive was not sourced by a shady FBA vendor that does less to protect against counterfeits in its sourcing than Amazon does. So you can't trust Amazon—or an FBA vendor that is trustworthy on their own—if other vendors using FBA exist for the same product.
Going back to amazon, just take a look at the 'most wished for' in any category; then look at 'best sellers' for the same category and you'll see, in a lot of cases, cheap wins even when the average review is like 2.5 or, sometimes less.
Whatever else may be said about Bezos, he has the ability to think long-term, create new markets, and execute on his vision. He also has the trust of investors who still buy Amazon stock even though he pretty much reinvests all the profits. The combination of existing market dominance, excellent leadership, and ready access to vast amounts of capital is a very hard combination to beat.
But you see, that's the way the game is played. Why siphon down cash and get it double taxed to pay it out as dividends when investors can sell shares as the price rises.
This avoids corporate tax and income tax on dividends. You are effectively saving 40% or more by doing it this way.
Investors aren't holding out for the day there are finally profits. They are riding their tax preferred profits all the way to the sky as we speak.
Create an aspirational brand -> they have tons of in-house brands in many categories, from premium to budget. They're just not usually advertised as being owned by Amazon.
Build a community -> Lists, Vine, Reviews, their forums, probably a bunch of other things
Personalize your products -> Amazon Merch
Deploy an omnichannel strategy -> Retail stores, Treasure Truck, Amazon Go, Whole Foods, Prime Now, Flex, drones...
Go niche over mass -> Marketplace
Commit to values -> I think the last 20 years have shown that Amazon is pretty committed to investing in growth...
Commit to values -> I think the last 20 years have shown that Amazon is pretty committed to investing in growth...
In the article, "values" was alluding to something more altruistic or socially aspirational than growth, capitalism, etc. Amazon's image is pretty weak in this area. Especially around employee culture and truly putting the consumer first.
It depends on what you mean by "growth".
When you think of Amazon, you probably think of shopping. It’s the site that sells everything from books to phones to full-on vehicles. Accordingly, the company is the dominant player in e-commerce.
But as this chart from Statista shows, Amazon’s most well-known business isn’t its biggest driver of profits. That would be the company’s cloud computing unit, Amazon Web Services, which accounted for about 89% of Amazon’s $1 billion total operating profit this past quarter. That’s despite AWS accounting for just 10% of the company’s overall revenue during the same time frame.
http://www.businessinsider.com/amazon-web-services-cloud-onl...
I remember in collage taking business management, that Microsoft and other super giant tech companies have to get into new markets or use tech to lower the cost to customers to beat the competition. I was told Microsoft might buy out banks and get into lending, ECT.
Problem is a lot of nursing homes, hospitals etc don't have the budget to automate things or even have a modern computer and OS. If Amazon makes a deal they can run Android apps on Fire Tablets provided for free and have access to an AWS based database.
I am sure this won't be the last area they get into, but it will provide growth.
https://www.usatoday.com/story/money/2018/01/30/amazon-berks...
Edit: I found a link to cite
If you want to build something that beats Amazon, you need to identify what Amazon either won't or preferably can't do. Some plausible candidates:
1. Consistent prices
2. Customizable prices (ala jet)
3. Products or categories Amazon can't source (surprisingly many, there are a ton of popular items Amazon doesn't sell and a bit of sleuthing can find some of them). One subcategory of this is exclusives of existing brands and licenses, or patented products. Another, quite lucrative category is MLM stuff - it's tough to get them in bulk but the popular ones sell quite well by third parties on Amazon.
4. Trends. A small business can typically react quicker to trends. Lots of small sellers made money on fidget spinner well before big retailers did.
5. Sell to b&m, still 90% of retail. The vast majority of Amazon PL is not in stores.
Another thing would be to identify Amazon's profit centers and compete there. They make a ton of money on some items, they lose a ton of money on others. You can profitably compete with the high margin items.
This is where niche websites really come into their element. JetPens comes to mind as a very good example. They sell high end pens (fountain pens etc). Their categorisation is spot on, since all they sell is pens, so I can browse their range of pens and accessories easily. They also have a really good blog and guides to help drive sales. Their price point is ideal for a blog-driven marketing/sales model. After reading a blog article or a guide, I'd happily shell out $25 to try something new, which is conveniently linked to from the blog post.
https://canopy.co/explore/popular https://thieve.co/
Actually really interesting potential from a biz perspective - nice lifestyle biz if you do it right. Depending on how many purchases you drive you can earn between 4-8.5% of the purchase price.
Also, for Amazon Video, instantwatcher.com, but not sure how they monetize. Way easier on a PC to navigate Amazon Video Prime and Netflix than on their native sites. Amazon still leaves a lot to be desired though.
Objectively Amazon has never had much of a personality brand-wise, and anything you can do to exploit that weakness will help you win customers.
Podcasters seem to be a lot more discerning about which products they will advertise.
On the other side of the coin,since most ads for podcast include some type of offer code, you can measure which podcasts are affective at driving sales.
Creating an online shop is dead simple. Search is solved.
If only Prime existed as a SaaS service. Shyp seems to be attempting to do it.
Just don't buy it on Amazon.
Oh, this I disagree with. (Bias note, I work for Amazon but state only my own opinions).
Amazon has the Leadership Principles. Google them to see what they are. You may not agree with them, but these values are religion inside the company. It's becoming less so lately (to the detriment of the company, in my view) but they're still values that Amazon is and should be known for their obsession with.
But when it comes to overall innovation I'd argue that Amazon is significantly out-innovating Facebook, Apple, and Google, each of which seem afraid to take any big risks or make any obvious long-term bets.
I think markets will catch up with this reality at some point. I reorganized my tech stock portfolio to reflect this view yesterday.
Start a business, run it on AWS, do well, they have all your systems metadata and using that can replicate your business. Rinse, repeat. Then there's Lambda and Greengrass... ha
We're the Eloi, AWS are the Morlocks.
You can't beat the Morlocks with a 'community' play, and the only way 'going niche' will help you is that you'll be too small to pay attention to.
[Edit]
To make my comment less negative...
To beat Amazon you need to get ahead of them on a game they don't already own (or have the capacity to catch up on) and establish yourself as the dominant market in that space. E.g. there's an interesting company in London calle Synthace for example who are building a compiler for pharmacueticals. You write code that defines a manufacturing process and it makes the drugs for you. If they can provide commoditised pharma-as-a-service and evolve a healthy enough ecosystem to build up some value, Amazon will find it hard to replicate and either try to acquire or hunt elsewhere.
Yeah it's a bleak view. It's not going to change either because China's ascendance will mean Amazon is the US's strongest buffer against Alibaba, so unlikely to get broken up even it achieves monopoly position.
My first thought is this is a very big claim. It sounds like they are “stealing”. They ask what customers want and then build new services based on customers’ reqursts and what could win more customers. Sure they know what their customers do when the customers interact with an account mamager, but we can say the same about every business out there then.
Also, AWS is only part of what makes Amazon profitable. Amazon is interested in making itself indispensable, by connecting dots, from online shopping to healthcare to home automation.
http://ShopIn.com is working to move buyer personas out of data silos by decentralize purchasing history onto a federated blockchain.
Decentralizing purchasing data should let individual brands compete more equally.
It's an ambitious project but should it take off it will provide real world data to make smaller brands more competitive.
Also when you say data is completely owned by thr user, how are you able to recommend? How do you help your engine to improved? In the end you do need the data. Spotify trains their customer dataset annoymously, which most companies do when they are doing training. So I don’t how this project is any more putting user in control. It’s very vague to me - are you suggesting privacy is honored? That’s what “user is in control” means - I can either share or not share, but what value do you get then?