

How Amazon.com is thriving in a horrendous retail climate - dominik
http://www.slate.com/id/2210620/

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nlanier
Amazon anecdote: I bought a very expensive Canon 70-200mm lens for my camera
on a Thursday afternoon. I had the lens shipped overnight so that I could use
it for a weightlifting meet to be held that Sunday. Unfortunately, amazon.com
informed me, the item did not ship until Friday, which meant I would not get
my product until Monday - This, for obvious reasons, was unacceptable.

So I emailed amazon. Twenty minutes later I got a CALL from Executive Customer
Relations and they spoke in great detail about how they would ASSURE me I
would get my product with Saturday delivery. They canceled the existing order
mid-shipment and sent out another one with Saturday delivery AND killed the
exuberant shipping charge. I got my product in time to use that Sunday and I
was a happy camper.

That, my friends, is how you kick ass at business.

~~~
electromagnetic
Agreed, I'm always amazed that I order something _knowing_ it's going to take
time. I ordered a couple of books, one of which was out of stock and was
estimated to arrive in 1-2 weeks, so I was like sure whatever I'll just take
the free delivery. I got a dispatch order at 8am the next morning and it
arrived by the friday, it took a total of 4 days. This has happened to me
multiple times and simply amazes me.

~~~
nlanier
Absolutely. I mean, I was blown away. Blown away. They even called me the week
after to make sure everything was OK and to ask how the photo taking went. You
expect that sort of personalization and care from a smaller company but it
TRULY is something when you see it from one with a $30 Bil market cap.

I haven't done business online with anyone else since (on big ticket items)
and probably never will.

------
mdasen
Businesses thrive like Amazon by being efficient and well polished. Amazon is
able to handle exceptions well because they do such a polished job of the
majority of orders. When exceptions are such a minority, it's easy to give
them the time and attention that they deserve. When exceptions are always
popping up, you can't afford the labor to deal with them in a way that makes
customers happy. When exceptions aren't usual, their added cost doesn't make
that much of a difference to your bottom line.

Amazon automates their system well and runs a tight ship where most orders go
through with no hassle, no interference, etc. That makes it easy for them to
spend a little more on certain cases to make customers happy.

Part of it is just that other retailers aren't so efficient. If you're hiring
store staff, most of the day people are in work and they have little to do.
Even during busy times, they won't be able to move merchandise like Amazon
where it can be made more assembly-line oriented.

So, Amazon is able to give people the experience that they want because all
the easy things take no time for them.

~~~
DaniFong
There's part of that, sure. But they don't have to care that much. It means a
lot that they still do.

------
dominik
An excerpt illustrating the value of _underpromise, overdeliver_ :

"For a store that aims to give you a bargain, it also excels at customer
service. Here's something that happens often: I'll buy an item on Monday
afternoon and be told to expect it to arrive Wednesday. Then, sometime
Tuesday, the UPS guy rings my door—amazingly, Amazon has moved the product
from its shipping center in Nevada to my apartment in San Francisco in less
than a day, for no extra charge."

Imagine what the author would have written had Amazon said the package would
arrive Tuesday but the packaged didn't show up until Wednesday.

~~~
patio11
I once worked for the mail order arm of an office supply store which you all
know. We have the same distribution-centers-across-country-situated-for-
maximum-deliverability system that Amazon does.

All the company literature says something to the effect of "Order by 3 PM EST
and your item will be shipped to you in two business days!"

This is, not to put to fine a point on it, a lie. 97% of orders put in by 5 PM
EST will arrive the next business day. We expect that. We're '($# fanatical
about achieving it -- if that number slipped to 95% heads would roll at
several places in the company. But we never, ever tell customers that. Why?
Because if we told them that we'd be pissing off 3% of our customers for
forever. As it is we please 97% for forever. Much better deal!

This lie has some interesting consequences when a customer calls to expedite
an order. (For example, "Oh crikey, I was supposed to have this order in days
ago but I forgot, if it isn't here by Thursday I'll lose my job -- what can
you do for me?") Our line representatives -- that was little $10 an hour me --
are given, have, and use the authority to upgrade customers' shipping at our
discretion. So I could look at the big blinking count-down clock to 5:00 PM,
note that there were 6 hours left to the cutoff, and say "Oh, no problem ma'am
-- this will be there tomorrow". But that would spill the beans! So instead
I'd say "I tell you what I'm going to do ma'am, I'll upgrade you to our
fastest available shipping through FedEx at no extra charge." And then proceed
to cost the company about a day's worth of my salary, just to avoid losing
face in front of someone who I'm busy wowing the daylights out of.

I cost the company substantially more in "accommodations" than I did in salary
for at least some of my tenure there. The computer flagged me for it twice. My
line manager came to me and said "Hey Patrick, the computer has flagged you
for being overly generous. Anything you want to tell me?" and said "I felt
that accommodation was necessary knock the socks off of [customer name]" and
my boss said "Right answer! Carry on."

Which is how you get a 99.X% customer satisfaction metric for the quite
pedestrian business of selling paper and pens out of a catalog. (Quite
profitably, I might add.)

I'll take the liberty of keeping the company anonymous and slightly altering
the above internal metrics. They always treated me well and that buys a lot of
loyalty. So if you need to buy your office staples, well, you'll just have to
find your own preferred service provider.

------
Whippet
My Anecdotal experience:

I need a new iPod cable and as I was at my local shopping center, I decided to
check at Circuit City. I expected the price to be ~$10.00 but the prices was
$24.99

I checked with amazon when I got home. I was able to buy a 3 pack, regular
cable, car charger cable and 110v outlet cable for $8.00 including shipping.

It's not a mystery why retailers are suffering when you see price gouging like
that.

------
rudyfink
I am amazed "tax free" isn't anywhere in that article. Being tax free and
having what is certainly a more affluent shopping base absolutely can't hurt
in tight economic times.

I will say Prime is simply amazing. Amazon with it and Amazon without it are
entirely different experience. With "super saver shipping" my entire order
would need to group and be ready, which literally took months on some
occasions. With Prime everything ships as soon as it is available and usually
within the same day.

~~~
Elepsis
Actually, at least for me, for a while now the super saver shipping hasn't had
the constraint of needing to group all your items. Indeed, they explicitly
warn you that your items may ship separately (at no extra charge).

------
lacker
Amazon anecdote from today:

I was at a bookstore and saw a Vernor Vinge book that I didn't have already.
Unfortunately it was $18 for the paperback. On my gphone I checked on Amazon
and found a used-but-mint-condition copy for $3, plus $4 shipping. So I just
ordered it from Amazon and left without buying anything.

I do feel bad for not helping out the bookstore, but it's hard to spend an
extra $11 for nothing.

~~~
gravitycop
_I do feel bad for not helping out the bookstore_

Why would one want to help out a bricks-and-mortar bookstore?

~~~
unalone
Because bookstores form communities around them? I went to a book discussion
club at Barnes & Noble for half a year when I was younger.

Or perhaps because the people who open non-chain bookstores are avid readers,
often obsessed with helping out a community, and they love what they do,
despite the fact that it's not exactly an easy business?

I know we're cool and new-wave but it's one thing to say Amazon's good. It's
another to question why somebody would want to help out a business model
that's _never_ been lucrative, whose practitioners more often than not do it
for the joy of helping people find a good read.

~~~
ijntybvrt
>Because bookstores form communities around them? The same Waterstones/B+N who
destroyed the small bookstores by voiding the net book price agreement are now
complaining that Amazon are undercutting them. And small bookstores by selling
used books on amazon are doing better than ever!

~~~
gravitycop
<http://news.ycombinator.com/formatdoc>

_Blank lines separate paragraphs._

------
Mistone
we launched our retail apparel site in October in the midst of the huge stock
market loss days. on a suggestion from my cofounder we started listing on
amazon in early December. Dec sales from amazon accounted for a 1/4 of sales,
and more then 3/4 in Jan, as sales dipped on our site.

we get tons of sales on amazon from places in the midwest where on our site we
get mostly right and left coast locations.

im actually lifting forecasts right now due to the strength of that channel.
additionally we are often the low price on amazon, and the item is marked up
from what is sells for on our site, so its not low margin dumping ground like
eBay. horray for amazon.

------
endtime
Here's a little story about Amazon's efficieny from another perspective.

When I applied to Microsoft for a summer internship, the process was: go to
info session, submit resume, wait a couple weeks, be asked to schedule an on-
campus interview, wait a few days, be invited up to Redmond, schedule flights,
fly up to Seattle. Pretty standard, but...

When I applied to Amazon, the process was: Go to career fair, hand them my
resume, have my resume looked at for ~20 seconds, be asked to write a C-string
function on the back, wait a few days, and be invited for a final round
interview on campus.

The point is that they cut out an enormous amount of overhead by recruiting
this way. They probably wouldn't get much information out of a typical first
round interview or phone screen that they didn't get by asking me to write
that function on my resume and keeping an eye on how long it took me. And
rather than fly people up to Seattle, they probably just fly 2-4 interviews
down here. Amazon strikes me as a very shrewd company in some ways.

------
truebosko
At the business I work at, we have been thriving as well. We're not anywhere
near as big as Amazon, infact we only have 5 employees (and one part time
accountant)

Yet, we've had our 3 best months in a row since November, and February is
shaping up to be pretty good

We sell outdoor and indoor recreation items, so no one needs them, but
everything is below retail. We also sell through about 5 different channels
(Our websites, Our small retail store, Pennysaver, Kijiji, eBay..)

We also make sure to ship everything same-day, answer every customer email
within 12 hours, and run a super tight ship when it comes to inventory counts
so we're not in a big mess.

Of course, I'm sure there is many guys like us but I thought it'd be ok to
share some good news from a small retail business :)

------
njharman
I really like Amazon as a company, I know their products, market and believe
AWS, Kindle are great growth areas. I really wanted to buy their stock but I
dollar cost avg my existing positions instead. AMZN has gone from ~$40 when I
was looking to over $60 today. nharman is a sad panda.

------
zach
People who live off the beaten path love Amazon, and especially Amazon Prime.
The big box retailers are still good for everyday stuff, but you really
appreciate the convenience, price and selection Amazon offers when you have
severely limited retail options.

------
omouse
Retail stores are basically warehouses. The consumer has to waste some time
looking through all the inventory and some of it may not be there, etc.

Amazon, on the other hand, hides its warehouses and gives you a clean
interface to the inventory.

