
Amazon to shut down its Amazon Restaurants business in the U.S. - prostoalex
https://www.geekwire.com/2019/amazon-shut-amazon-restaurants-business-u-s/
======
pxtail
I'm amazed and amused reading some replies - it looks like some people would
love to live in a world where single corporation fulfills all their basic
needs:

* restaurants from amazon

* home real estate market[0]

* shopping from amazon

* entertainment from amazon

* alexa from amazon, listening all the time

* education (already some basic form of it exists - alexa is used to answer kids questions)

Although many important key services are still missing: healthcare,
insurances, banking.. etc.

edit: banking-related product already out [1]

[0]
[https://news.ycombinator.com/item?id=20152956](https://news.ycombinator.com/item?id=20152956)

[1] Banking - Amazon.com Credit Builder -
[https://news.ycombinator.com/item?id=20149304](https://news.ycombinator.com/item?id=20149304)

~~~
tfehring
I want _someone_ to come in and crush entrenched rent-seekers by building and
scaling better, cheaper products. There are only a handful of companies in
recent memory that have managed to do that - Walmart, Vanguard, Uber/Lyft, and
arguably Airbnb and Robinhood are the first few that come to mind - and I
can't think of any other than Amazon that have done it in multiple spaces (CPG
+ IaaS so far).

I'd prefer if different startups did it in each of those industries, but I can
live with Amazon taking over the world if it means that health care no longer
sucks and selling a home no longer costs 6% and kids in underfunded school
districts get their questions answered.

~~~
cannonedhamster
You can sell your home though various portals without having to ever speak to
a realtor. Walmart has innovated in a few different places but primarily
logistics. Disney is not just an animation hub, they work on robotics,
software, as well as psychology and other areas. I think it's easier to see
when your company isn't already a behemoth. Amazon arguably has done
innovation better than most, but a lot of that has been through investor money
other people wouldn't have access to. Established companies have to balance
the books and as they've shifted towards profitability and revenue innovation
has necessarily slowed.

I think you're already seeing many of your problems getting closer to
solutions. There is that natural tension though between capitalism and it's
tendency towards monopoly and the government's responsibility to ensure that
the market stays healthy and competitive.

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ronnier
Sad to see it go. I was on the original Amazon Local team for about two years,
that ultimately turned into restaurants. A lot of my growth came from the
people on amazon local, really solid people and good people, the product just
had trouble catching on. That’s amazon, they’ll give just about everything a
solid try and do their best knowing it may not work out.

~~~
Maven911
Are you able to discuss some of the lessons learnt, like generically without
going into too much private detail

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Animats
Amazon had a restaurant business?

The funny thing is, Amazon probably could do a good delivery restaurant
business. There are already many "delivery only restaurants"[1] Uber Eats
encourages others to start them. But Amazon, unlike Uber, is capable of
building physical infrastructure. The future of this is "food fulfillment
centers", large warehouse spaces which house various specialty kitchens.
Common functions, such as shipping, cleaning, equipment maintenance, and order
handling are shared. Surprising that Amazon didn't go that way.

[1] [https://ny.eater.com/2016/9/26/12717518/delivery-only-
restau...](https://ny.eater.com/2016/9/26/12717518/delivery-only-restaurants-
nyc)

~~~
devit
That sounds overdue.

Restaurant food is massively overpriced compared to raw materials (despite
basic dishes like pasta and sous vide steak taking basically no time and
effort to prepare), and mass producing it along with mass delivery using vans
might fix that.

~~~
tnolet
A price of an item is rarely if ever based on its raw material cost. With
restaurant food even more. You pay for location, rent, heating, staffing etc
etc etc

~~~
ravenstine
More importantly, the price of an item comes down to how much people are
_willing to pay for it_. Price does have to cover overhead(unless you're
WeWork and care more about revenue than profit), but a comparable competing
product can have the same overhead and charge way more if its audience is
willing to pay more or it.

------
civility
I wonder if Amazon would ever dive into the home real estate market. With
modern day search, realtors provide very little value above doing the paper
work, and that seems very automatable. There's just no reason to pay 6% of
every house sale to middle men, but that's the way it currently works. A large
company like Amazon or Google could make a ton of money at a much lower rate.
I think this makes a lot more sense than going into the restaurant delivery
business.

~~~
prostoalex
It's expensive to have boots on the ground in every zip code. RedFin hires
their own agents full time. OpenListings and Zillow refer online buyers to
their affiliated agents who cut them a deal on commission in exchange for
leads. You can always list a place with photos and all on Zillow or CraigsList
and mention that seller will not pay an agent's commission. End of the day
there's a "For Sale by Owner" sign for those driving or walking by.

But considering that in the US it's the seller who pays both agents, there are
no immediate savings for potential buyers, and some, being new to the home-
buying process in general or new to that zip code, would prefer some hand-
holding and chit-chatting provided by their agent at no cost to them.

Among some not so obvious valuable tidbits that the buyer's agent can provide:

* general _feel_ about the neighborhood, whether it's on the rise or in decline

* previous scandals and issues, like contaminated water, city attempting to pass an additional levy or tax, house being on the airport path, etc.

* potential future improvements, like a light rail station planned nearby

* referrals to various local professionals, like inspectors, surveyors, painters, or movers

* any other new developments in town or neighborhoods that the buyer might not have considered, especially when shopping remotely

~~~
civility
> But considering that in the US it's the seller who pays both agents, there
> are no immediate savings for potential buyers [...]

This is all part of the scam, and I'm surprised more people can't see through
it. Five people walk into a room at closing. There are two agents, a title
agent, the seller, and the buyer. Only the buyer brings any money - so it's
pretty clear who is paying.

Put it another way - if the seller goes with a lower percentage agent, then
the buyer keeps more of the offer price, and should therefore accept a
slightly lower offer. This saves the buyer money too.

> Among some not so obvious valuable tidbits that the buyer's agent can
> provide: [...]

And you think that's worth 6% of a house that costs hundreds of thousands of
dollars? I think that's insane.

This all sounds like a pitch from a realtor.

~~~
prostoalex
Fair enough. Those commissions do compress as the house prices climb into 7-
or 8-digit ranges, and there are always discount agents. The one in my area
buys billboards that promise selling the house for 3% flat.

I was hoping perhaps someone from the industry could comment on why those
agents haven't overtaken the market by storm.

------
craz8
For the last few weeks they’ve been hitting me with exactly the same offers as
Bite Squad - including free delivery for both last month AND this.

Despite the convenience of purchasing with Amazon, it’s just an expensive way
to buy food!

At least they never just threw it over the gate like tonight’s Amazon
delivery!

------
dewitt
I'm not surprised. Amazon's entire MO is a relentless focus on the customer.
They do that by methodically optimizing and controlling every aspect of the
supply chain right up to the moment the product is handed off to the customer.
And they get better at it every day.

Restaurant delivery breaks that model. There is too much variability. Too much
can go wrong outside their control, and they don't have enough leverage to
change it.

If they can't win (even at zero margin) and can't make customers consistently
happy, why be in it at all?

~~~
sametmax
Mac donald's seems to do exactly that.

~~~
csallen
McDonald's delivers?

~~~
alaskamiller
McDonalds been delivering in Asia for years. They deliver in USA with
UberEats. Taco Bell partnered with GrubHub and Wendy's partnered with
DoorDash. The future's already here.

------
icelancer
Ah, this is too bad. We used it at home occasionally. Everything we've used
has either gone out of business, cut ingredients to an embarrassing portions,
or raised prices way too high (probably to where they need to be to be
sustainable).

It's not a viable business, I think. Not without some big leaps forward.

------
r32a_
Amazon has heavily invested in Deliveroo. Will probably buy them out
eventually

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tracer4201
Disclaimer: Amazon investor

I’m glad. I didn’t see this going anywhere. I’ve tried the service several
times when I was living in Seattle. Pretty much every option had terrible
ratings and everything I tried was generally a bad experience. Delivery was
always on time, but paying $15-25+ per person for a soggy, wet meal just
wasn’t worth it. We ordered a pizza one time arrived completely cold with
soggy crust.

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imgabe
Not surprising. I got a number of promotions for this but every time I went to
see what restaurants were available it was just fast food. Nothing that wasn't
already available from Uber eats or Caviar.

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Nasrudith
This seems to be a trend with big tech companies - they try to get into a new
domain under their name and then when it succeeds half-heartedly kill it off.

It looks very dysfunctional and inefficient even from a venture capital
"recycle it and risk it for another moonshot again" perspective and makes it
look like they have lost their ability to innovate entirely once they start
posting positive income to justify their stock cost. I am not sure if it is as
dysfunctional as it looks or I am missing something.

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bredren
This biz unit kept spamming me. I had to complain multiple times to Amazon
about their dumb emails. Sorry but good riddance.

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dawnerd
Shame, they were the best restaurant delivery service I've used.

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NotPaidToPost
The market is already crowded with Uber Eats, Deliveroo, etc.

All of the incumbents are bleeding money.

Amazon decided to invest in Deliveroo not to miss the boat but it seems
sensible not to pursue their own platform.

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John_Michael
This is bad news, it was one of the best food delivery services in the U.S

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ryanmercer
I've been an Amazon customer (via my parents) since late 1995 or early 1996,
this is the first I've heard of a restaurant branch.

