Amazon said to launch Pantry to take on Costco, Sam's

I love Costco not just because of their good prices but also because they have a reputation for paying and treating their employees reasonably well. Amazon does not share this reputation (at least for their warehouse workers).

Despite not really needing very many bulk family sized items, my wife and I like shopping at Costco. You get hands on the items and can inspect them, and generally the quality of what Costco sells is well selected and very high (even if it's not fashionable). e.g. grab a random bottle of wine out of their wine section and you can guarantee it'll be pretty drinkable, even the $6 bottles. Their customer service and no questions return policy has more than paid for the very reasonable membership cost ($55 a year, which you'll probably just save on toilet paper purchases alone). But selection is slim and often hit and miss as favorite items rotate in and out of the stores.

Compare to Amazon, which sells multiple versions of the same SKUs from slightly different retailers (with slightly different shipping methods), and then hundreds of slightly different items all with a wide variance in quality and you spend hours reading reviews and comparison shopping. It's "ok" to do from home, but I frankly have better things to do with my time most of the time. However, for those really hard to find items, or ones that Costco simply doesn't carry, it's totally worth to shop at Amazon.

Every time Amazon rolls one of these services out that is supposed to make it hard on the brick-and-mortar competition, Amazon's fulfillment centers are mentioned, which also have to be brick and mortar.

I believe Walmart/Sam's Club, Costco, and Target have a decided advantage on the real estate/fulfillment center side. Every store can be a "fulfillment center". The trick for these guys is going to be not waiting until the foot traffic dries up before they attack Amazon directly. And of course they already are to some extent, but if you read these articles about Amazon that seem to appear every week, the perception seems to be that the old players have no chance at competing.

A huge caveat for Amazon is they still don't make a profit. Whether that's by choice, I'm not really sure.

I'd love to see Costco have to compete with Amazon for my bulk household purchases, but I'm curious how this "set sized box" scheme will work. Part of the magic of Prime is not ("add-ons" aside) worrying about clustering your orders: Search, confirm price is reasonable, click, and it shows up two days later. Trying to fill a limited box sounds like it could end up as a fiddly value-maximizing game.

Unless they start selling buck and a half hot dogs and pop, I'll stick with Costco.

This model is similar to that of alice.com, which just folded. I liked them because they shipped "normal" size products (not the mega-bulk sizes Amazon ships now via S&S) -- but you needed six products together to ship.

"Warehouse club members tend to be higher income households with kids — the type of shoppers that have huge lifetime value to retailers."

Assuming that this is true, I think this is a brilliant, long-tail, idea from Amazon. If the kids get accustomed to seeing Amazon boxes full of stuff arrive every week, when they move out on their own they probably will also buy from Amazon. Similar to computer manufacturers (e.g. Apple, Microsoft) giving educational discounts to schools/students. It's hard to know if this implementation will work but I would start worrying if I were Costco/Sam's. Amazon has shown that they do find innovative approaches to markets. If this approach doesn't work they'll come out that will later on.

That is an interesting concept, but I am really wishing someone like amazon could provide a group buying plan. (Th following is likely poorly articulated):

I find that there is lots of waste in my buying habits for a couple reasons; I typically only need half or so of the buy able serving size of many things, but would prefer the prices of bulk items.

An interesting model would be to allow several people, ideally geographically close to one another, but not necessarily friends with eachother, to build a communal list of standard/often purchased items.

When some threshold is met, the items are purchased and divided among the buyers.

The items would need to be divisible easily by the number of buyers...

A service like this should also focus on minimalist packaging.

Set the fee at stepped level, $25 $50 $75 $100 -- and I just have a running list of items I use regularly. When enough people need the same things and my buy threshold is met, the box ships, I am billed and the counter restarts until the next month/interval.

There should be a simple way to report how quickly you consume an item and the system would determine the larger average consumption rates over time and make suggestions on how often items should be added.

It's hard for amazon to compete with costco. Their return policy is second to none. When a manufacturer refuses to honor their own warranty, this service is priceless.

There's already something similar on the market called http://www.boxed.com/. Pretty sure they use Amazon fulfillment centers to carry it out.

I have a hard time understanding why people enjoy shopping at costco. I have had a membership there in the past and did not like it. Its always lined up so you can't just pick up one or two things (I am sure this is by design), its very difficult to find items with no signs so you are forced to walk around the whole store (Again, im sure this is by design).

The amount of extra time it takes for my wife and I to buy groceries there easily costs more then any potential savings. I suspect it adds over an hour to our trip rather then buying from our local grocer. This doesn't even factor in the stress of driving there, finding parking etc. I think I will continue to walk to the closest store and pay a little more at the checkout.

"Amazon Food Pantry" just doesn't have a good ring.