
Why Amazon is eating the world - Doubleguitars
https://techcrunch.com/2017/05/14/why-amazon-is-eating-the-world/
======
resoluteteeth
> The truth is that each of these is feasible for a large competitor to
> replicate and it’s reasonable to think that Walmart could build or acquire
> these capabilities within the next few years. The key component to
> profitable 2-day (or 1-hour) delivery is the customer’s proximity to a
> distribution center.

This is incredible. Walmart has free two-day shipping on orders over $35
_right now_ , with _no membership required_ , and yet people are still writing
articles like this asking, "will it be possible for Walmart to get 2 day
shipping within the next couple years?"

Because of the problems with third party sellers (combining different sellers
into the same product page, comingling, fake reviews, etc.) it's getting
harder and harder to buy stuff on Amazon, plus you need a prime membership to
get fast free shipping. I've also had tons of problems with Amazon deliveries
since they switched to their own logistics company. In comparison, Walmart is
looking better and better by the day.

This isn't some day in the future, it's now. I'm seriously considering
cancelling prime and just using walmart when I need 2 day delivery.

~~~
zkanter
You missed the whole point of my post. I said specifically said Amazon's moats
have nothing to do with things like 2-day shipping, which are easily copied.
The FBA program, as one example, allows _any Amazon seller to ship product to
Amazon 's warehouse, and then have that product be eligible for 2-day (or
faster) shipping_ \- with zero effort (and unbeatable fulfillment fees).
_That_ program - and the dozens of others like it - will be extraordinarily
difficult to copy.

~~~
leggomylibro
Exactly - and while that low barrier of entry gives Amazon a significant
problem with fraudulent items and listings of dubious quality, it also adds a
ton of breadth to the marketplace and makes something that actually lives up
to the phrase, "The Everything Store."

As an example, I found myself in the market for a laser cutter recently.
Consumer entries start in the low/mid 4-figures, and Glowforge doesn't appear
to be right around the corner. So I figure, the best bang-for-your-buck option
is to buy a cheap Chinese model and swap out the cruddy bits.

Now where am I going to get a cheap Chinese laser cutter, a nice open-source
CNC controller board, and if things go hooey-shaped, a more robust power
supply, ventilation, and/or cooling system? Walmart?

No, the alternatives to something like that are more along the lines of ebay.
The turnaround time would be significant, and I'd still have to vet all of the
listings I consider to hopefully avoid fakes. Ditto for AliExpress, and double
for TaoBao. Amazon offers prime shipping on most of those items, though, and
they have a decent returns policy to boot. The breadth of their catalog is
nothing to sneeze at.

~~~
grogenaut
I would love some links on where you're doing your research on laser cutters.
My wife recently suggested I buy one which is like, oh god how did this
happen, I must make this happen as fast as possible before this opportunity
goes away!

~~~
leggomylibro
I kind of just googled around for information; there isn't a whole lot of
well-collated stuff, so I definitely could have missed a better option, but it
looks like if you're not going to shell out for a very expensive
commercial/industrial unit or wait <undefined> months for Glowforge, you're
probably looking at a K40. There's a pretty good wiki for it on the
lasercutting subreddit:
[https://www.reddit.com/r/lasercutting/wiki/k40](https://www.reddit.com/r/lasercutting/wiki/k40)

You'll quickly notice that it's not a terribly good laser cutter, although it
does come with the 40W necessary to be one and can be upgraded further. There
are a variety of upgrades you'll want, but if your budget is $1K, the laser
cutter itself will cost you less than half of that; they run $400-450 on ebay.

So if this were a Top Gear challenge, you're sitting pretty to improve your
cheap lemon with your remaining cash:

* The default controller only works with Windows and the software it comes with is likely pirated. If you're used to working with 3D printers, get a RAMPS board and put Marlin or something on it. There are a few guides for going from there to more open control software, or even running off of an SD card with no PC.

* Ventilation. Apparently the stock fan doesn't fit that well, and there's no system to blow debris off of the bed when a cut is in progress. That could be a fire hazard and/or bio hazard since the dust from stuff like acrylic is not good for you.

* Cooling. It's water-cooled, with a small aquarium pump that you stick in a bucket of water. It looks like that's probably fine if you aren't going to run the laser constantly, but you could always get something with more flow.

* Some users say that you should ground the metal housing manually with a thick strand of wire. That's a mildly worrying piece of advice.

So it sounds a little hair-raising, but all in all it seems like a manageable
risk, and the price is right.

~~~
grogenaut
Thanks!

------
cs702
TL;DR: The OP says Amazon's key advantage over all competitors is that the
company's internal operations -- from server provisioning to database storage
to inventory management to fulfillment to call-centers -- are also sold to
external users as services, forced by competition to remain highly competitive
on quality, features, and cost efficiency. No other company has made its
entire infrastructure available to the world as competitive services in the
same way.

It's a compelling point.

~~~
fragmede
It's compelling, but the switching costs away from AWS are quite high, aka
good ole' vendor lock-in. I'd love some new EC2 instance types that don't
force me to use EBS for root, but the switching cost away from EC2 is so high
that, _sigh_ , whatever.

If there were a drop in replacement for EC2 that didn't force me to use EBS
for root, I'd switch in a heartbeat, but because of vendor lock-in, EC2
doesn't _have_ to compete on quality, features, nor cost. It's simply because
switching is (currently) too expensive. This is a feature that I, a customer,
wants; the reason I want this is besides the point. To borrow from the auto
industry, you can have use root, as long as it's EBS.

Pretending Amazon doesn't use vendor lock-in to it's own advantage like every
other company, and thinking that it really competes on quality, features and
cost ignores the huge inertia of saying on what works.

Private, back-room, "don't tell anyone else I gave you that good of a
price"-type enterprise sales tactics for "at-scale" pricing don't engender
trust either. Great for business; not for encouraging competition.

~~~
dflock
It's only lock-in of you've tied yourself to AWS only features. If you just
use EC2 as VMs, then switching is pretty easy.

~~~
solatic
Yeah but few people do that because building massive infrastructure on top of
EC2 instead of using Amazon's managed alternatives is a great way to lose
money, not just on the AWS bill itself but also on needless additional work
for your architects.

Defeating vendor lock-in requires the development of sound cloud-resource
primitives, and probably some regulation on part of government to not pay
egress costs when switching to a competitor (since the high cost of moving
your data to another cloud is anti-competitive). But nobody has come up with
decent primitives because, you know, if AmaGooSoft don't need multi-cloud
architectures for high availability, then why do you think you do? And
government won't step in because none of the regulators understand how any of
this works.

------
creepydata
>The level of discipline required to operate a multi-tenant, externally facing
service like FBA yields tremendous benefit to the Amazon’s internal operation
— this isn’t some hacked-together, homegrown tool that is hard-coded to
Amazon’s own needs and thus nearly impossible to improve.

Did this guy just say FBA is impossible to improve? Is this a comedy piece?
FBA is garbage, we (third party sellers, at least me) only sell on FBA because
that's where the customers are. FBA is like an abusive boyfriend you can't get
away from. Sure, Amazon will reimburse you when they lose your inventory
(which they will do, very often) but you have to watch your inventory like a
hawk because they won't tell you your inventory is lost. That's assuming your
shipments even make it into your inventory in the first place after arriving
at the wearhouse. Ive heard of big time FBA sellers having to hire someone to
do nothing but resolve inventory discrepancies full time. Seller support
barely speaks English (unless you can get a supervisor, which I was able to do
once by making enough of a stink) and doesn't understand what your problem is.
Of course they take 3 full days to not resolve your issue. No legitimate
seller commingles inventory anymore because then Amazon will send out
counterfeits to your customers. It absolutely WILL happen to you at some time
if you are commingling for enough time, no exceptions. Then you have to hope
Amazon doesn't kick you off their platform for their own incompetence.

~~~
graeme
The quote said "this isn't some....impossible to improve"

They're saying FBA is possible to improve. You missed the isn't.

~~~
i_cant_speel
This is correct. But in his defense, it was poorly worded.

------
kmf5547
I had a half hour debate in my head on this topic the other day; this is a
great post thank you! I work at Walmart HQ and I think people underestimate
their size and don't always consider what position that puts them in. They are
investing heavily in private brands from grocery to apparel which will drive
margins up continually over the next decades. I have heard that they are
investing in some pretty crazy stuff to enhance the in store experience such
as VR. We are actively cutting billions of dollars of inventory (I work in the
supply chain) They are really taking a look at internal operations and
reworking the organization the perform at a higher level. I don't know much
about Amazon operations but I have a friend who is a vendor and he said they
are a bad business partner while Walmart is a great business partner. Anything
Amazon does with pricing Walmart is doing the same thing and we can push lower
and that will not change for a decade. I don't think one or the other will
"win" although most other retailers will die out. Amazon will get a big piece
of the pie in the future but Walmart will never die, people love low prices
(Walmart is synonymous with this) and customer service is going to be top
notch at Walmart in 5 years as we invest in training, stores and wages.

~~~
_rpd
> as we invest in training, stores and wages

... as we raise our costs to service the dwindling market of "people without a
computer and stable home address."

It is astonishing that Walmart HQ still thinks that the internet is a fad. No
person with a viable alternative desires to visit a physical Walmart store. It
takes time, requires overcoming a variety of frustrations like traffic,
parking, bewildering store layouts, and then you never know if the item you
want will actually be present at the location. Compare clicking a button and
having the item delivered to your door.

> Walmart will never die

The truth is that Walmart is already dead. They are too far behind to ever
catch up, and it is clear that "HQ" thinks that bolting an "e-commerce
solution" on to their existing systems will keep them competitive, when in
fact the entire organization has to be rebuilt from the ground up to even have
a chance. That isn't going to happen. Walmart will soon be joining Sears and
Blockbuster.

~~~
kmf5547
No one thinks the internet is a fad at HQ and you have no basis for that. We
just bought a 3 billion dollar online retailer and put their CEO in charge of
Walmart.com and online strategy is a part of every weekly buyer meeting in the
company. No time in the near future will people not shop in person, the online
market is under 10% and people like to shop in person. Product prices will not
rise with internal labor costs; our product flow is currently not optimized
which adds a lot of labor that you do not see. As that changes those labor
will shoft to the store floor and create a better customer experience. Combine
that with procate brands (higher margin) and your overall margin will continue
to drop. If you think someone is far behind in any online business you are
underestimating how quickly those things can turn around in a massive company
with tens of thousands of people working on the problem.

~~~
_rpd
> the online market is under 10% and people like to shop in person

No, they really don't ...

Consumers Are Now Doing Most of Their Shopping Online, June 8, 2016.

[http://fortune.com/2016/06/08/online-shopping-
increases/](http://fortune.com/2016/06/08/online-shopping-increases/)

> you are underestimating how quickly those things can turn around in a
> massive company with tens of thousands of people working on the problem

I know exactly how an aging, entrenched bureaucracy rewarded for in store
sales will react to a new online bolt-on that will "steal" their sales.
Ongoing sabotage that cripples the upstart. Very few companies can make
transitions like this where a new part of the company must cannibalize the
old. Walmart has shown no evidence of even recognizing the kind of
transformation they need to make.

~~~
danderino
This article says nothing to that regard.

>The survey, now in its fifth year, polled more than 5,000 consumers who make
at least two online purchases in a three-month period. According to results,
shoppers now make 51% of their purchases online, compared to 48% in 2015 and
47% in 2014.

1\. They're only polling people who make online purchases.

2\. Not sure how the 51% figure is computed.

------
kevin_b_er
It is getting increasingly hard to use amazon. The risk of getting bogus goods
is getting higher and higher.

Even when your order is "shipped and sold" by Amazon it can still be bogus
because amazon mixes the 3rd party seller parts into the pool.

I got shipped a clearly inferior 3rd party generic version of what I ordered.
Amazon took it back, but support could not guarantee I'd receive what was
presented on the website. I ended up buying it for slightly more from a brick
& mortar just to guarantee I at least got something branded correctly.

This is only going to get worse until Amazon is no different from ebay for
garbage. With my recent experience, "shipped and sold by Amazon" is a
meaningless distinguishing marker now if 3rd party sellers are involved in
selling the product.

~~~
and0
I feel like Amazon has gotten harder to browse, lately.

I'm moving and need to buy things to replace what I used to share with
roommates in the kitchen (various utensils and tools). It's become extremely
difficult to answer a simple question like "what's the best cooking utensil
set?", due to shitty third party products, unclear descriptions, incredibly
polarized reviews, and sponsored items taking the "top" listings.

I needed maybe 5 different products, which I reflexively assumed would take
maybe 15 minutes of clicking around, but instead it took almost 90.
Ironically, I would have been better served popping over to the Target around
the corner, where at least I can see the size / quality of what I'm buying.

~~~
creepydata
>I feel like Amazon has gotten harder to browse, lately.

Amazon has a "problem" with private labels. It's so so so easy for Joe Blow in
Kansas to create a private label product and get it shipped directly to
Amazon's wearhouses. So Amazon is overrun by them, which makes it difficult to
find anything in the mess. On top of that, since most listings are created by
third party sellers, listings vary in quality and can be very inaccurate. All
this makes it close to impossible to compare items. Top it off with Amazon's
sorting feature being entirely broken, it can really be a mess to try to
browse. eBay actually offers a better UI in that regard.

It was pretty short sighted on Amazon's part to let this happen, IMO.

Amazon actually CAN improve in this regard, all they have to do is require
third party sellers to complete the listing and also have a human review the
listing for quality and accuracy. Just that small step would improve the
customer experience drastically.

With all that I don't really understand why people still use Amazon anymore
other than out of habit.

~~~
willis77
Sort by rating you say? Sure, here's 3 pages of sketchy, out of production,
third-party seller items with one 5-star review, followed by the 4.97 star
item with 3,880 reviews that you actually should buy. Enjoy!

~~~
scarhill
If only they'd bring back sort by _number_ of ratings...

------
fauigerzigerk
This extent of euphoria would make me nervous if I were an Amazon shareholder.

Yes Amazon is a great company and productizing all these different parts is an
excellent idea. I agree that it is their most important moat.

But Amazon is astonishingly mediocre at one key task: Helping customers find,
select and configure what they want.

Amazon is not a good fashion retailer. Amazon is not a good electronics
retailer. Too much information is missing or incorrect, the product range
isn't nearly big enough, configuration options are almost non-existent and
there is zero innovation on the presentation side.

In other words, Amazon is not a good specialty store. It's actually a pretty
bland supermarket when it could be so much more.

~~~
thinkling
I was surprised that they killed off Endless[1], the dedicated shoe shopping
site, rather than turning it into a subsite or skin on Amazon; I was expecting
Amazon to create more category-specific UI, but very little of that has
happened. Maybe the categories are too hard to define? Maybe it gets too hard
to move the underlying platform forward when you've got 20 forks of the UI to
maintain?

[1] Though it makes sense after the acquisition of Zappos that they didn't
want to have 3 shoe stores. Or does it? You'd think running a separately
branded web front-end would be cheap.

------
ThePhysicist
From my experience, Amazon's quality of execution and resulting customer
experience is just so much better than that of (most of) their competitors.
Most people therefore tend to gravitate towards them over time as they have
negative experiences with other companies. Personally I don't like the fact
that Amazon is evading taxes here in Germany so I often try to order things
(personally and for my business) on other websites, but honestly there are
very few suppliers that can match the price and speed of Amazon. From my
personal estimate, about 50 % of the orders I placed with other suppliers
didn't arrive on time / as promised due to various reasons: Sometimes people
would put the wrong address on the package, sometimes they would just forget
to ship the item on time, sometimes their inventory management system would
mark an item as available when it was already sold out, sometimes the payment
wasn't correctly processed.

After wasting several hours of my time dealing with the (often unresponsive)
customer support of these suppliers I tend to order most things on Amazon even
if the price is slightly higher, as I know that the delivery speed and
customer support will be outstanding.

~~~
tonyedgecombe
I've been a customer since 1998, it was excellent for most of that period but
has been slipping over the last couple of years. It's now become the last
resort for me even if it means paying a bit more elsewhere.

------
blacksmythe
Amazon used to be a very dependable market for quality goods, but you can no
longer depend on getting a quality product.

I find Costco on-line to be a very credible Amazon alternative. Costco now
fills the niche that Amazon did 2 years ago.

~~~
bduerst
I agree, reading the reviews on Amazon is like trying to divine tea leaves
sometimes. I feel like they're going the way of eBay in terms of quality
expectations.

------
wojt_eu
The main point is that Amazon's advantage is exposing divisions to external
competition. Without it "internal supplier gets complacent with a captive,
internal customer."

However later paragraph says:

> The key advantage that Amazon has over any other enterprise service provider
> – from UPS and FedEx to Rackspace – is that they are forced to use their own
> services. UPS is a step removed from backlash due to lost/destroyed
> packages, shipping delays, terrible software, and poor holiday capacity
> planning. Angry customers blame the retailer, and the retailer screams at
> UPS in turn. When Amazon is the service provider, they’re permanently
> dogfooding. There is nowhere for poor performance to hide.

Doesn't it contradict earlier point?

~~~
goblin89
On one hand, as Amazon opens up the pieces that comprise its architecture,
they begin to compete for external customers. On the other hand, Amazon itself
keeps using its own solutions.

By the way, it’s not just that Amazon prevents its divisions from becoming
‘fat and inefficient’ by opening them up to external competition. Crucially,
thanks to commoditising early and getting tons of companies to use its
platform, Amazon can now see how others innovate on top of it (having low-
level access to consumption information) and quickly follow on anything new,
basically innovating but without risky R&D of their own[0].

[0] Simon Wardley wrote about Innovate—Leverage—Commoditise (ILC) approach
here: [http://blog.gardeviance.org/2014/03/understanding-
ecosystems...](http://blog.gardeviance.org/2014/03/understanding-ecosystems-
part-i-of-ii.html)

I’d also recommend his book ([https://medium.com/wardleymaps/on-being-
lost-2ef5f05eb1ec](https://medium.com/wardleymaps/on-being-lost-2ef5f05eb1ec))
and the intro to value-chain mapping ([http://blog.gardeviance.org/2015/02/an-
introduction-to-wardl...](http://blog.gardeviance.org/2015/02/an-introduction-
to-wardley-value-chain.html)). It’s not about Amazon per se, but it helped me
personally understand the strategy.

~~~
philjr
Thanks for these, something resonated with me reading his description. Any
other recommendations on the strategy side?

------
shahbaby
On a side note, a lot of local retail stores still don't take their online
presence seriously. For example, displaying things on their webpage which are
not in store. However, given how out of touch the retail industry is with the
tech world, this is not surprising.

------
fragmede
_> It’s impossible to imagine a future 10 years from now where a customer
comes up and says, ‘Jeff I love Amazon; I just wish the prices were a little
higher,’ [or] ‘I love Amazon; I just wish you’d deliver a little more
slowly.’_

No matter when Mr. Bezos said this, there's slowly growing awareness of the
mistreatment of workers, engendered by shockingly low prices, with Walmart the
posterchild for businesses being horrible within the confines of the law.
Things like scheduling workers for 39 hour work weeks to not qualify them for
health-care, or driving suppliers out of business because they can, all in the
name of "it's only business". On the other end is various ethical sourcing
standards like Fair Trade, which originated _long_ before Starbucks picked up
on it.

~~~
linkregister
And a surprising lack of awareness of poor conditions in Amazon warehouses,
e.g. lack of air conditioning in hot climates, strict security checks that
exceed 30-minute waits.

------
jtraffic
I appreciate the insight in this article, but I wish I could remove all of the
predictions. The insight (to me) is that it may be a good idea to take tools
your company uses and make them into products, for several reasons. That's
interesting and valuable to me to consider.

But there are also predictions: "Amazon’s lead will only grow over the coming
decade, and I don’t think there is much that any other retailer can do to stop
it."

The author is tunneling on one thing Amazon does. He will escape
accountability for his boldness because nobody will remember this article at
the end of "the coming decade." If he's right, he can drag it back out and say
he called it. Otherwise, no harm.

------
Touche
It's interesting to me how two of the biggest innovators today, Bezos and
Musk, have done so while defying conventional wisdom.

Conventional wisdom is to focus on your company's core product, don't
overreach. Amazon is succeeding by focusing on _everything_.

Conventional wisdom is that growth in technology is in cloud technologies.
Musk is succeeding by focusing on meatspace infrastructure.

~~~
SpoilerAlert
Amazon started with books, if I remember correctly.

Then they expanded which many businesses do.

Musk is a bit different.

~~~
Touche
Businesses expand, but not in the way the article describes. Most businesses
_pick_ segments to expand into, whereas Amazon expands into everything that
they touch.

------
empath75
I think one underappreciated advantage that amazon has, and that is probably
less savory:

Because so many competitors and potential competitors use AWS, they have many
opportunities to undercut their own customers and introduce competing products
with lower costs, because they're using their own services. They can simply
look at their fastest growing customers scope out their system architecture
and duplicate it.

Amazon Video vs Netflix being the prime example.

------
carsongross
Walmart needs to suck it up and rebrand its online store as a separate, more
updated identity.

My wife won't shop there "because Walmart". It isn't rational, but it's a
thing.

Edit: to clarify, my wife won't shop on the walmart _website_. The physical
stores are a different topic.

~~~
ashark
Not going to their physical stores can be rational. The one nearest us is
sadness made manifest. All the workers and shoppers seem like they hate life.
Plus, no-one who shops there knows how to exist in a space with other people
without constantly being in the way. The place can be 1/2 as busy as Target,
and _feel_ twice as busy because no-one there knows how to walk properly, nor
do they seem aware there are other people in their world at all. Perhaps this
relates to the intense sadness they all project. They seem lost in a fog,
emphasis on _lost_.

The checkout lines are also usually 2-3x as long as Target, no matter how busy
or not-busy it is (they more aggressively cut employee hours to the bare
minimum required to function, I'd guess).

None of those apply online, though.

~~~
upvotinglurker
Interestingly, in my small midwestern US college town, I have the opposite
experience. The college-associated people who consider themselves
educated/intellectual/cultured gravitate toward grocery shopping at Kroger,
while the "townies" and not-particularly-academically-serious undergrads go to
Walmart. I choose Walmart because Kroger "feels" much more crowded and the
members of the crowd seem to exhibit much less situational awareness.

~~~
intopieces
This sounds like Bloomington, IN. Except that town's Wal Mart crowd is mostly
dictated by location. Kroger locations are walking distance and short bus
ride, Wal Mart is predtically out of town.

------
easyfrag
What I'd like to know is how Bezos convinced investors & shareholders to
accept those razor thin margins and profits for all those years. I get the
growth argument, but we're into 20 years since its IPO and it's only lately
that we're seeing profits.

~~~
_rpd
Formally declaring a profit just results in a higher tax bill. Better to
reinvest in R&D if you can keep the growth rate up. AMZN was < $40 in 2008,
now it is pushing $1000. That's why shareholders are happy to let Bezos keep
reinvesting.

------
tamersalama
How to solve the suckiness of Amazon Canada? Catch-all searches, missing
features and benefits, terrible inventory, high prices, exaggerated/fake
prices, etc...

------
mnm1
Outside of AWS, you're looking at inflated prices, sometimes 5-10x for normal
products, about half the inventory (if not more) filled with fake, low quality
garbage from China, Prime 2 day deliveries that often take much longer and
sometimes never arrive, and some of the worst (but also best, it's hit or
miss) customer service I've ever seen. Fulfilled by Amazon doesn't do shit to
address any of these problems. In fact, Amazon doesn't do shit to address any
of these problems. You'd think it'd at least address the fake/crap goods
problem. Nope. AWS itself seems to me to simply be an unfinished service that
people are willing to pay vast amount of sums for the privilege of complaining
about their AWS bill. Hell, it's so common, it's now happened twice in the
show Silicon Valley (same AWS joke, two times) and too many times to count at
every job I've ever been at that considered AWS. Outside of AWS, Amazon is not
only catchable, for most products, there are already better alternatives.

------
irq-1
Quality. I might be out of touch, but I think a coming consumer focus on
quality will change retail and manufacturing.

> because you can build a business strategy around the things that are stable
> in time. … [I]n our retail business, we know that customers want low prices,
> and I know that’s going to be true 10 years from now. They want fast
> delivery; they want vast selection. [-Bezos]

Quality is more important than price, delivery and selection for a large, and
increasing, number of goods. If you buy an air-conditioner or t-shirts you
want good quality, but only need _reasonable_ price, delivery and selection.

> Amazon will only be brought down by ... a paradigm shift in how we consume
> physical products

Buying clubs that focus on Quality are the future. Consumers will be freed of
toothpaste brands and marketing, and instead get a cheap, effective, quality
toothpaste selected by their buying club. And the club will focus on
protecting the customer and auditing the manufacturer, rather than enabling
marketing and an irrational focus on price.

Amazon won't be able to compete because it works against every system they've
built. Instead of a variety of manufacturers, brands and sellers, buying
groups will go down the path of vertical integration: work closer with
manufacturers ignoring brands and marketing, buying manufacturers to reduce
costs, internalizing fulfillment, etc...

If the buying clubs are merely brand selectors, or discount clubs, or product
reviewers, they can be easily integrated into Amazon systems. But if buying
clubs are focused on the best product for their members, Amazon and Wall-mart
(and everyone else) will have to change their business.

Wall-mart optimized for price, Amazon optimized for price, delivery and
selection, but optimizing for quality is the future. (Or I'm out of touch :)

~~~
swalsh
"Buying clubs that focus on Quality are the future"

To a degree I agree with you, but buying clubs are not great either. For
instance I tried out "Harrys Razors", but I only shave once a week. A blade
lasts a while for me. So even with the "lowest frequency" option, I ended up
drowning in razor blades.

I also tried one of the clothing clubs, because I hate cloth shopping. I ended
up getting a lot of stuff I Hated.

I like the idea, but there's something to be said for "buying what you need
when you need it".

~~~
astrange
Harry's likes to try to upsell you on new products, but due to their niche it
isn't actually possible to create new products. So they've ceaselessly sent me
newsletters for years with nothing but new colors of the same handle.

I gave up and grew a beard.

------
losteverything
<It seems obvious to me that Amazon will move into small-parcel shipping
(UPS/FedEx/USPS) within the next five years.

I wish the author expanded on this.

Some are afraid president trump may EO the postal service in some unheard of
way...which favors businesses that rely on last mile delivery

I wonder if the author was referring to delivery franchising?

~~~
msielski
Half of my Amazon packages are now delivered by an Amazon van or by some guy's
personal vehicle with an Amazon magnet on it. I believe they're a mix of the
Flex[1] program the author referred to and private companies Amazon is
contracting[2]. Not a stretch to see them adding pickup as a service and
competing directly with USPS, UPS, FedEx etc. See also the companies they're
acquiring in this area[3].

[1] [https://flex.amazon.com/](https://flex.amazon.com/)

[2] [https://logistics.amazon.com/](https://logistics.amazon.com/)

[3] [http://www.seattletimes.com/business/amazon/amazons-
delivery...](http://www.seattletimes.com/business/amazon/amazons-delivery-
ambitions-take-on-industry-giants/)

~~~
dkrich
I for a time worked for the USPS- what lots of people don't seem to realize is
that pickups and last mile deliveries are precisely the businesses that UPS
and FedEx want no part of. They are extraordinarily complex in most areas and
very expensive. The money is in flying and trucking the packages across the
country. They actually pay USPS to do it for them in a lot of places because
it's cheaper than doing it themselves.

After all the USPS has been in that business for 200 years and not too many
people are bullish on them. Why would Amazon getting into that business be
good for them?

------
guelo
Maybe it's because of "the free market improves everything" that Amazon
started offering their own fake review service, fake branded products and
cheap knockoffs. After all, fraudulent marketing is indeed one of the services
provided by the infallible free market.

~~~
fivestar
Not sure why you're taking digs at the free market since let's face it,
Communism couldn't even reliably feed people or produce one right shoe and one
left shoe on any regular basis.

------
Tloewald
The interesting thing about Amazon's horizontal service architecture is that
it should be easy to break up if it starts using its monopoly power to charge
rents. Given that its market cap seems predicated on future rents, there may
be a reckoning.

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HugThem
The article claims that the base of Amazons success is their approach to make
internal services compete externally. I think this is just an implementation
detail.

The broader concept is their willingness and ability to keep improving the
user experience. And that is something they have in common with many market
leaders.

You could as well look at Google, Booking.com or Facebook. They did not win by
inventing their niche. They won by creating a better user experience. Compared
to them, their competitors user experience was and is atrocious. They built a
company culture of high standards and putting the user first early on. And
since it worked, they kept it that way.

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baahh3333
When the author says "world" , I hope he means just the US. I don't think
Amazon has any influence outside the "US world".

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buzzybee
I gave up on Amazon the other day. What did it? The "accidental" signup for
Prime. They have a multi-year track record of doing this to people, some of
whom can't afford it. I rarely need to get anything from them. So I cancelled
both Prime and my account. They are clearly uninterested in keeping up service
quality these days.

------
jumpkickhit
I've come across Amazon doing surge pricing before.

A pair of earbud headphones came up in an article praising them at their price
point, so myself and a bunch of other people decided to buy them. They were
$35. Amazon had it for sale through a bunch of resellers, and themselves for
that price.

You couldn't order any of it though, it would error out and say it wasn't
available right now.

I tried ebay, and got almost the exact same message from ebay on everyone
selling those earbuds.

I ended up ordering it off of a 3rd site, which was already sold out, but
honored the price.

In a few days, Amazon let it's sellers sell the item again, but around 2-3
times the original price.

It's interesting how they and Ebay blocked the sale of a suddenly 'hot' item
like that, to price gouge everyone who had decided to purchase them.

------
NicoJuicy
Amazon is taking over the world either by AWS or by their stock investors.

In my intimate circle, nobody talks about Amazon and more about a local
competitor. I'm not sure if it can be generalised ( Belgium). It could be that
we just aren't interesting for Amazon ofc

------
jack9
> I do think Amazon’s culture is incredible and Bezos is the most impressive
> CEO out there

 _chuckle_ Very very few people who work at (or have worked at Amazon) think
this. Having worked with Amazon since 1999, I have never been impressed by
their technology or leadership. They have been very lucky and had to pivot.
AWS allowed them to build their online marketshare, not some CEO direction.
i.e. [take chances in entering new markets, fail a lot] is not a particularly
insightful strategy. Many companies do it when they have the capital.

------
otabdeveloper1
> Why Amazon is eating the world

For a very tiny and solipsistic definition of "world", yes.

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enugu
Is there scope for a more open distributed app or service(which wont make much
money for itself, but more broadly available like craigslist) to coordinate
local sellers, rating services, insurance, delivery companies which any one
can opt into? Customers see all available local options for products and
sellers. A seller doesnt just have rating but can also optionally be backed up
by another company who ensures against product failure.

Amazon, for business reasons, wont commoditize some core functions, which the
above website can.

Analogy would be to locked in social network vs email as an open protocol.

------
princetontiger
If amazon gets too large, the government would step in...

Also, humans are pretty smart. A year ago, people were super negative on
Walmart. Target will be able to compete, and so will many others.

~~~
fivestar
I don't see the US Govt. doing much trust busting or paving the way for
competition at all. Just look at the sad state of US braodband--established
companies have lobbied for deals that keep competition in check, the bar for
entry high, and favorable taxes for all but the middle class.

------
Markoff
TLDR: world=US

could author of headline be more self-centered? you know 95% of people on this
planet don't live in US and most of them don't care about Amazon?

~~~
HugThem
I'm in Europe and I buy over 90% of my stuff from Amazon.

Where are you and from which online retailers do you buy?

~~~
Markoff
europe, i buy nothing from amazon, everything I checked there cost there more
than in local chains/supermarkets/eshops, so I don't really understand hype
about it, same goes for illegal uber drivers which cost more than licensed
taxi ordered through taxi aggregator app

same goes for china where pretty much nobody use amazon with their 90s website
design

~~~
tibiapejagala
Seconding this. I have never bought anything from Amazon. People here don't
even consider it when making a choice. They just buy from allegro (our local
eBay) and from thousands of on-line stores.

I don't know if Amazon has some cheap delivery here in Poland or do they ship
everything from abroad.

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skdotdan
What if Walmart offered same-day-delivery using their existing physical shops
as logistics centers? Actually, the fact that Walmart do NOT sell third-party
items in their website can make they service better (less crowded, more
focused, more quality).

OT: why Walmart don't expand to Europe and other regions?

~~~
Markoff
what could they offer in Europe compared to Lidl or Tesco? heck I've been
there few times in China and it was maybe the worst chain i experienced, even
almost any Chinese chain had better variety of products and better prices,
even Carrefour was one level higher

------
marcamillion
I see in a lot of threads that people talk about "many companies that do
third-party fulfillment". As someone actively in the market for such services,
can anyone provide some links to a few services please.

I know about the YC Company - Ship Bob.

What are some alternatives?

Thanks!

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11thEarlOfMar
"By carving out an operational piece of the company as a platform, they could
future-proof the company against inefficiency and technological stagnation."

This sums it up for me. The computing platform is the foundation of Amazon's
survival. Get that right and then make it unassailable, and world domination
is inevitable. In some ways, Microsoft used the same approach by separating
the operating system from applications and letting each application compete on
it's own. They quickly found ways to team those applications for advantage.

Amazon has the computing platform dominance, the consumer behavior data at
massive scale, the delivery platform (they're buying ships?), ... they're not
just after Retail, but anything that touches customer experience. FedEx is in
the cross-hairs...

------
norea-armozel
What concerns me regarding Amazon becoming a retail monopoly is what happens
when Amazon can't sustain itself with respect to persistent economic
downturns? Like just one bad year I suspect could wipe them out if they're not
careful. So putting all our eggs in one basket isn't good in my opinion. I'd
rather have a dozen smaller retailers which half could go down in flames than
one huge one which causes a long term disruption if it files for bankruptcy.

------
diefunction
At least in China, Amazon has no ways to win.

------
mustaflex
Amazon is eating the world because I'am 2m tall with 48 size feet(eu, 13 us)
and I didn't (couldn't) buy a single pair of shoes in a physical shop for 10
years now. Let the world burn and amazon eat it when it's medium rare.

