
Amazon Bought Me for $100 a Year - charlieegan3
http://www.travisllado.com/2016/01/amazoncom-bought-me-for-100year.html
======
ktamura
Amazon Prime is successful for the same reason Uber or Lyft are: instant
gratification relative to alternatives.

My mother, who lives in remote mountains in Japan, is a die-hard Amazon Prime
fan. Why? Because it manages to deliver any item to her place across many
SKUs. It's more convenient -and often faster- for her to order something on
Amazon than to drive 30 minutes to shop at the closest electronics shop. I've
been amazed with how good Amazon's logistics is even in rural Japan.

The elusive "aha" moment is actually not that complicated in theory: just
provide value faster than alternatives while ensuring quality. In Uber/Lyft's
case, it's a safe ride from A to Z arriving in a few minutes. In Amazon
Prime's case, it's any merchandise on your doorstep. In AWS's case, it's
computing resources at your fingertips in minutes.

It's easier said than done =)

~~~
chinathrow
The trick with Prime however is, that you pay a 100 bucks a year and then feel
the urge to get something back in return - ie faster shipping against non-
Prime customers, etc.

Clever, Amazon, clever.

~~~
douche
On the other hand, it doesn't take long to recoup that $100 worth of free,
2-day shipping, compared to the exorbitant rates that you used to have to pay
for similar service from other retailers, or even $8-10 shipping and handling
for standard shipping that catalogs used to charge.

~~~
wskinner
Assuming that you would have paid $8-$10 for that level of shipping before. If
you're like me, you never would have paid extra for 2-day shipping, but when
it's framed in the language of "free", everything changes.

~~~
smoyer
I had two kids in college when we first bought Prime and it paid for itself in
one semester due to textbook shipment costs. Buying textbooks via Amazon was
often half the price of the local university bookstores (whether affiliated
with the campus or not).

~~~
mikeash
Couldn't you have had those books shipped for free anyway, just slower?

The way I buy online, Prime doesn't save me any money. I always go for the
free shipping. Without Prime, I wait longer. Prime only saves money if you
routinely pay for faster shipping, and do a lot of people really do that?

~~~
goldenkey
Amazon is not as cheap as the culture makes it out to be. Most of the time its
actually a ripoff compared to other online shopping when you factor in promo
codes or deals.

Walmart.com offers free shipping for orders over $45. Target.com offers free
shipping also. And if you are ordering dog/cat food or some niche thing,
ordering from Chewy.com or computer parts from Newegg, etc.. will net you
better prices.

I'm not sure if its Amazon who's canvasing online forums or the myth just
continues to get perpetuated by less than savvy shoppers. But Amazon is hardly
cheap unless you really do need the 2-day shipping. Which most of the time,
people don't mind waiting 3-5 days to save 10-20%.

~~~
dxhdr
Disagree, most of the time it's actually the exact same price as any online
site. Go comparison shop RAM or harddrives on Amazon and Newegg. Newegg may
have a larger selection but all of the major name-brand items are the same
price on both sites. If some sponges are $1 cheaper on Walmart.com, who cares.
I'm not going to waste 10 minutes comparison shopping for sponges; Amazon is
free to make its margins there if it'd like.

Here's an example -- I found a Kingston SSD drive on Newegg that has a Limited
Time Offer "See price in cart" gimmick discount. It's $1.10 more expensive on
Amazon. I found another Newegg limited time discount Samsung SSD drive that's
actually $0.76 cheaper on Amazon. You are not going to be saving 10-20% by
waiting 3-5 days.

Juggling logins and shopping carts across a half dozen different websites
isn't convenient. Coupon hunting isn't convenient. Amazon Prime is all about
convenience and it delivers.

~~~
goldenkey
Actually, common household goods are going to amount to more than luxury items
or electronics in terms of cost per year.

So your 10 minute comparison shopping for sponges is moot.

Google Shopping makes it easy to do comparison shopping. And yet Amazon
doesn't want to be on Google Shopping -- I wonder why...

Juggling logins and shopping carts? Heh. Nice fallacious argument.

------
natch
It's funny math if he thinks Amazon is buying him for $100, when he's the one
supplying the $100.

And before anyone comes back about how he's getting a savings compared to what
he would be paying, he's confused somewhere, because the number he cited was
$300, not $100, and that's only because he doesn't opt for the sometimes
slower (but usually way faster than promised) free shipping, which is
available to all, Prime or not.

I buy a huge amount of stuff on Amazon. No prime needed, no extra Prime fees
spent.

What if I need something fast? I'll pay $20 for one-time 1-day shipping, not
$100 for a year of 2-day shipping that I don't need. $20 versus $100, in all
my years of using Amazon, have never spent the $20 once, so I've saved a few
hundred dollars so far.

Lesson here maybe is that pretty charts can obscure the underlying reality,
when basic assumptions about who is paying who get flipped.

~~~
djhworld
> It's funny math if he thinks Amazon is buying him for $100, when he's the
> one supplying the $100.

I think he means they've bought his loyalty. Or the 'prime' factor clouds
purchasing decisions in favour of Amazon as the convenience and breadth of
products is enough to make them the default choice.

I've been a Prime member for a few years now and I certainly do notice myself
thinking Amazon first, anything else second.

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ac29
The thing I never understood about Prime is that unless you are extremely
impatient, prime buys you nothing [1]. I'm not impatient (2 business days vs 5
is rarely a problem), but even if I had paid for 2 day shipping on every
Amazon order I made last year, it would have cost less than the cost of a
Prime Subscription.

The real insidious thing is what the OP pointed out -- in an attempt to
justify their $100 subscription, people end up spending more than they
otherwise would.

[1] I'm not counting the Prime Video service/etc, which may have value to
people.

~~~
cj
If you're ordering a new pair of fancy headphones, you can probably wait an
extra few days without Prime.

But if you're about to run out of toilet paper, soap, deodorant, dish
detergent, printer paper, etc... sometimes you just can't wait 5 days :)

~~~
mikeash
Sounds like a failure of planning. Those thing don't disappear suddenly. (I
know, a lot of people suck at this, and it's good for them to have options.)

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columbo
When I signed for prime 3-4 years ago there was also a lot online retailers
jerking around on shipping prices. "Oh that CD is $0.01 but it is $11.99
shipping, so if you don't like it then you'll be refunded the purchase price."
Shipping prices in general seemed to be where quite a bit of profit was being
made.

I don't know if that is still the case but it was a major reason for me to
move to prime back then.

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chippy
Spending $3000 and saving $300 on delivery is not saving money.

It's spending $3000.

You are $3000 less well off.

This is such a basic concept many will violently oppose the idea with
rationale such as "well I was going to spend it anyhow" or "Well, those
headphones were on the list" or "These CDs were necessary spends and I would
have bought them regardless of the saving".

~~~
mikeash
You have a good point but I think you're reaching too far with it. They're not
$3,000 less well off, because the value of the purchases is more than the
value of the money. (From the buyer's point of view, which is all that matters
here.)

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mark_l_watson
I feel a little guilty every time I buy on Amazon.

I feel good about supporting local businesses in the small town I live in:
single Mom who cuts my hair, the couple who run the neighborhood gym, local
farmers markets, etc. It is incredibly important to support one's own
community and even though people do have jobs supporting Amazon purchases, it
does not feel the same to me.

------
seansmccullough
I think the main reason Prime is successful is because it's so convenient. I
live in Seattle, and running errands is really time consuming, so it's a lot
easier to buy items on Amazon if I don't need them today.

------
dano
Question: As Amazon continues to refine and optimize its logistics will the
delta in delivery time between prime and non-prime remain valued as it is
today?

My thought is that the hyper competitive retail marketplace will demand
continued optimization in pick-pack-ship and delivery. Amazon will need to add
other value to the $100 Prime subscription for it to remain differentiated.

------
musesum
Am planning to do the opposite; I just cancelled my prime membership. I was an
early customer as a friend was the first employee.

Recently I bought an item for double the retail price. The seller lied about
the price. I wasn't able to leave a review.

So, am opting for more friction to compensate for less trust.

~~~
DannyBee
"Recently I bought an item for double the retail price. The seller lied about
the price. I wasn't able to leave a review. "

Return it? I've bought items >$3000 from third party sellers on amazon, had
price or other issues, and returned them, with no problem. The one time there
was an issue, amazon stepped in and took care of it.

"So, am opting for more friction to compensate for less trust. "

What do you hope to find elsewhere? In particular, it sounds like you bought
from a third party seller on amazon, yet you seem to expect a different
experience from those same type of third party sellers elsewhere?

...

~~~
musesum
I didn't buy the item. It was an Apple Watch charger that Apple lists for $29
and the vendor has a "list price" $59. In the past, I have read reviews which
mention that an item is being sold for a lot more than SRP. So, I thought to
do the same. But, I guess that is no longer allowed. So, I can't trust Amazon
reviews anymore. This was a week after spending double for something else. So,
time to experiment with another vendor.

EDIT (More to your point.)

>> it sounds like you bought from a third party seller on amazon, yet you seem
to expect a different experience from those same type of third party sellers
elsewhere?

Buying directly from Apple was cheaper than Amazon. Until last week, I would
have gone to Amazon first, read the reviews second, and then order. Kinda sad;
breaking a decade old habit.

