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Day Two to One Day (stratechery.com)
166 points by kaboro 27 days ago | hide | past | web | favorite | 67 comments

Anazon is better than ever for brand name, known buys. Eg I recently ordered a UHD bluray movie, took about 15 seconds end to end and arrived in a day.

They are terrible for everything else. Eg I bought a reading light.

Which was a 10 minute sorting excersise trying to figure out which of a dozen nearly identical products was the least likely to burn down my house. Then trying to uncover which had real reviews and not switched etc. I hit the roulette wheel and ultimately got a unit that arrived DOA.

My trust in the last two years has deteriorated massively in their platform, as a consumer I am absolutely suseptable to a “quality first” disruptor.

And amazon is obviously jam packed with smart people, so what am I missing about their apparent lack of focus or execution on this commonly lamented problem?

The thing that "sucks" in Amazon's marketplace - is having US entrepneurs , buying some Chinese crap, doing some marketing and playing some tricks(SEO, fake reviews, etc) and over-charging on products.

In theory, with the right tools competition could sort that out.

But this theory doesn't work, not in Amazon, and not in many other online marketplaces.

So the solution is: exclusive brands, controlled by Amazon.

Amazon works hard on scaling that strategy.

And once Amazon is deeply invested in that strategy, a low-quality marketplace seems like a good thing.

And even for brand name items, you still have counterfeit worries (IE, many people refuse to buy flash storage at all from Amazon now), due to counterfeits from intermingling of "sold by amazon" and "shipped by amazon" items.

I'm not sure if the situation has changed, but it used to be that co-mingling was exclusively an aspect/option of FBA (Fulfillment by Amazon). They did not co-mingle their own inventory, so you could still be somewhat confident in purchasing products with Amazon as the seller of record, i.e. "Sold by Amazon".

I can't find anything to confirm or deny if this is still the case, but I haven't had any issues personally when sticking with products where Amazon is the seller of record. Although I have noticed the pricing and shipping time tend to be less competitive (I presumed because they don't access co-mingled inventory that's at a closer fulfillment center).

Amazon does co-mingle their own stock with marketplace stock, although exactly how often and for what items they do so is unknown. The board game industry has been hit hard by counterfeits (it's really not that hard to print a game), and there are many reports of people ordering games sold-and-shipped-by-amazon, and getting a counterfeit:



That's frustrating. It was the last remaining hope I had for Amazon purchases.

Yeah, it is. Thinking about it a little more, it possible that the counterfeits in this case are entering the flow at the distributor level, not at the amazon level, but we can't really tell from our perch at the consumer level.

I totally agree - we built https://indieshops.co/ in order to solve for the "quality first" alternative you mentioned.

We found that the majority of online shopping today consisted of 1) buying basics (read: cheap mass products) on Amazon or 2) getting advertised brands to you on Instagram/Fb/Google and hoping the one you like finds you. We hope that Indieshops provides an alternative where you can discover high quality brands.

Nice! Any plans for other markets (and filtering for them)? I gather it's all 'made with love in the USA' currently.

And how big is too big to be called 'indie'? If you take it quite literally it disallows having two shop fronts, but then to disallow that and allow online-only international-shipping... Just curious how you draw a line.

Thanks for the feedback! We're not deliberately making it US-only (in fact we have a few Canadian and Euro companies) but agree that navigating by market (or delivers-to) would be very useful!

We too are wrestling with that question, what should be the threshold for an "indie" company? We don't want to limit it so much that it's not useful for day-to-day shopping (ie too niche/etsy-ish), but haven't been too prescriptive yet about how big is too big. Hopefully users like you could help us define it!

Just shared this with my group looking for Amazon alternatives as well. Awesome.


> And amazon is obviously jam packed with smart people, so what am I missing about their apparent lack of focus or execution on this commonly lamented problem?

I wonder this too. How does this problem track with other problems they're trying to solve, though? Is it commonly lamented just on Hacker News, or are they getting direct feedback from customers? Are their returns skyrocketing? I suspect it's more subtle and longtime power purchasers are starting to buy less and less, like me.

More and more people will start drawing lines like you just did, and I have done. Poop bags for my dog? Definitely Amazon -- it took me 15 seconds end to end on their website, on my phone [!] and were here the next day. No way for electronics, vitamins, or anything that will actually go into my or my family's body (or my dog's body, for that matter).

I recently finished Brad Stone's The Everything Store, written in 2013. In the last chapter, brands complained about Amazon pricing below the their Minimum Advertised Price (MAP), to the detriment of physical sellers. Stone used the German knife company Wüsthof as an example. Wüsthof at one point around 2010 stopped supplying Amazon, but its products were still sold by third parties. Looking at Amazon now, there are at least 100 in-house Wüsthof products being sold by Amazon at prices that seem lower than the mid-hundred dollar price ranges cited in The Everything Store.

Does anyone know what happened generally to Amazon's relationship with brands over the past six years? Presumably over this time, Amazon has only gained in bargaining power over brands at the expense of physical locations, in accordance with Ben Thompson's Aggregation Theory. As an outsider, it seemed like Amazon and brand buyers have done well at the expense of brands and retail stores.

> And amazon is obviously jam packed with smart people, so what am I missing

How many of them work on the (loss-making) shop app though?

I'm honestly curious, because presumably it's supposed to eventually come out insanely profitable and awesome, but the UX sucks, has done for years, and rarely changes.

I assume (but may well be completely wrong) that most engineers at Amazon work on keeping AWS's managed offerings up with the hype train (only one needs to be lasting mega usage to make it all worthwhile), and a whole load of SRE and performance work (I wouldn't like to guess how small a fractional optimisation to EC2 would result in an $X saving across the whole fleet!).

Does it even have to be a disruptor? Can't people just figure out how to put a better storefront on Amazon's backend and just filter out the garbage?

Amazon has an API but it is severely rate-limited and has had some functionality cut to prevent such a thing.

So why can't there be a service that runs for each user with his own API key?

what am I missing about their apparent lack of focus or execution on this commonly lamented problem?

Until it affects Amazon's stock price, it's not a problem.

what am I missing about their apparent lack of focus

I'd guess it is not that they don't know or they can't fix it, it is that they just don't care. Considering the resources at their disposal, they can fix this problem easily. It is probably not (yet) a problem big enough to hurt them financially, so they don't put any effort into it. Every decision is probably purely driven by financial motive.

As you get bigger, the people organization becomes more complex. Changing the simplest of things become a complex song and dance of internal political posturing and maneuvering. Then changing people's mindsets and attitudes become even more difficult as people above them fear they will kill the golden goose if they try to change the mechanisms of how people work. This is a problem as old as time itself. This is why smaller startups disrupt bigger companies.

What is political about banning products that are counterfeit, dangerous, obviously poor quality etc? And fake reviews too. This is something that requires no discussion or thought, isn't it?

I don't think it's necessarily an easy problem to fix. They have one of the world's largest logistics systems built around letting anyone use it to sell or buy, all while keeping one product page per unique item being exchanged. How do they easily filter out bad actors from such a massive system?

There is so much about Amazon that is clearly in the 'Day 2' territory. I am not as swayed by one day shipping as the author is. Yes, its a big challenge and yes it makes things even more likely that Amazon will hurt brick and mortar stores (as an experiment look at the commercial retail space in your town and see how many 'things' retailers there are. Not as many as there were, and in some places entire city blocks have given way to 'services' retailers (salons and restaurants)

Amazon continues to struggle with counterfeits in their inventory. They continue to struggle with market vendors who give shoddy service. They continue to struggle with customer perception when something is "sold by amazon" and then ships from Malaysia by boat. They continue to have failures in even their 2 day "prime" when the two days only starts when the item ships, and it can take a week for an item to go from "ordered" to "shipped". And as they crack down on both buyer and seller fraud, it gets harder for legitimate customers to make a return claim.

All in all I am pretty bearish on them.

>> All in all I am pretty bearish on them.

Who will "kill" them ? What will the e-commerce market look like in 10 years - and could that be without Amazon as a major competitor ?

That is a good question, back when I was younger the question was "Could anyone kill Sears and Roebuck?" for much the same reasons. Using the history of Sears, and how they lost their lock on retail America, if Amazon dies the same way it will because there will be other choices that are give customers something that they want while Amazon fails to change (aka Day 2 type behavior).

For example, if your chance of getting something counterfeit on Amazon was 50% and to return it would take several days. Then a new company that focused on only legitimate merchandise and easy returns would start eating away at Amazon's volume. Now that is just an example, not saying it is going to happen, but another closer to home experience was Fry's Electronics where more and more often they would take customer returns, shrink wrap them and stick them back on the shelf. I once bought a DVD drive there open the box to find it contained a CDROM that clearly someone had taken out of their computer and replaced with a DVD drive (same thing I was doing). When I went to take it back the store said "How do we know you aren't the one who swapped it?" It took about 40 minutes but we found the serial number on the box had been previously returned the week before. From that point on I made a point of opening the package at the store to insure I wasn't getting the odd second hand "re-gifted" product.

I am already unwilling to go to Amazon for products that are easily copied.

I'm not bearish on Amazon, but it seems realistic that someone could build an aggregator of Shopify (or other owner-operated storefronts) sites. For example, a Shopify aggregator/product search engine that had any kind of meaningful traction could try to build a checkout integration with merchants using Shopify payments and take a cut of revenue, or just sell ads the same way Amazon does.

Maybe this already exists to some extent, and I'm sure there's a lot I'm not considering, but I think it's exceedingly realistic to build a competitor to Amazon that focuses on addressing some core complaints of both sides of the marketplace: product quality, counterfeiting, and producer control.

Should caveat that I'm ignoring AWS entirely and am aware of the irony that there's a substantial chance an Amazon competitor would be built on top of Amazon's infra.

// product quality, counterfeiting, and producer control

Those all come from a single reason: commingling - mixing the same product but from different sellers, when fulling an order.

I could see shopify setting up a system of letting sellers buy a certain original product from a manufacturer - and sending it to some warehouse and selling it on their aggregated store.

Let's say this solves co-mingling.

Than it would a be a great time for Amazon to copy that.

And it would e quite easy for them.

> I could see shopify setting up a system of letting sellers buy a certain original product from a manufacturer - and sending it to some warehouse and selling it on their aggregated store.

Isn't this just dropshipping (already an extremely popular behavior on Shopify). The aggregator I'm describing is one where the aggregator is just solving product discovery, but limited to non-Amazon storefronts, ideally limited to the product's owner, even if white labeled (doesn't entirely solve the quality issue, but would help with explicit counterfeiting at least). A core part of the value prop would be that it gives you direct access to the seller (some of whom may explicitly not list on Amazon) without Amazon as an intermediary.

Google kind of does this, but one of the reasons people go to Amazon is they know the entire SERP will be products, so if they're ready to buy, it's often the fastest way to get to place where they can click "Buy". The aggregator I'm thinking of is really a more aggressively curated, non-Amazon version of this.

Product search is about more than "discovery". You need to categorize products to distinguish variations like size and color. That requires real human curators and a revenue stream to pay them.

Categorization is very possible without human curation, particularly if you're ingesting structured data (as would be likely in the case of a Shopify site aggregator/search engine). And the idea wouldn't be for this to be non-revenue generating, it would generate revenue via revshare on purchases or ads.

One-day shipping is definitely a logistical leap for mankind but I often wonder the environmental impact that is accrued in the pursuit of total convenience.

Also, their Prime branded delivery trucks are driven by gig workers, essentially making Prime the Uber of the delivery world.

I just wonder how sustainable it all is. What level of convenience will be demanded next and what cost will that pose to the environment and to the part-time or gig workers who keep it moving.

Back in 1994 I could order something out of a computer shopper magazine and have it at my house the next day using Airborne express, I was amazed at the time (it usually arrived before 10am) and still kind of am.

Yeah, it’s still a step backward from Cyberian Outpost. (Though Prime Now / same-day is a step up when available.)

I guess it might be a net good environmentally. Packaging is bad, but driving to the nearest store to get a single item could be worse. Convenient delivery will decrease the latter.

On the other hand, if I'm going to drive to the store, I'm likely to plan ahead a little and pick up a number of items in one trip, rather than ordering them one by one online. (Or even ordering them all at once through Amazon, but having them arrive in a dozen separate deliveries.)

I don't remember when I last drove to a store to get a single item. (I do occasionally walk or cycle down to the high street for an individual item such as milk, though it's more usually a handful of things.)

Read a piece recently on how Uber is primarily used by people who are a) fairly well off and b) have access to transit or other options to get to work

This argument you make reminds me of that. Most people taking advantage of Amazon One-Day delivery are in urban centres, and most of them are likely doing OK, and most of them can likely walk or take public transit to get what they need

Except that's the last mile, and I think a small proportion of the total carbon footprint.

I think the question of whether same-day delivery is good or bad boils down to whether the goods are able to be trucked across the country in an efficient manner. If the company has switched to many more smaller trucks, which may be less than completely full, then it's a negative.

Has anyone seen data on this?

I recently starting making an effort to purchase things like paper towels, Advil, toothpaste, etc from Target (in person) instead of buying from Amazon to reduce the amount of packaging I have to recycle and throw away.

I still feel like it's a net benefit, but that's purely a _feeling_.

If Amazon owns the truck, it's not the Uber of anything. They're truck drivers.

My wonder is how large a company can get before the founder can no longer force strong culture.

The decision to favor their own products over others seems like a short-sighted goal to help an exec get a bonus rather than help their customers

I am wondering how they can handle short-sighted, highly-motivated individuals self-dealing rather than looking out for the company and its stated culture.

Probably something around Dunbar's number ("proposed to lie between 100 and 250, with a commonly used value of 150") [0]. I imagine it's not simply the size of the company but how quickly it grew to that size, too.

[0]: https://en.wikipedia.org/wiki/Dunbar%27s_number

Keynes said it best. In the long run, we're all dead. Jobs died and his culture is already ebbing.

As Ben said...revenue has not showed up. I really wonder if going from 2 days to 1 day is as valuable to consumers, and as impactful on revenue, to going from say 1 week to 2 days.

We might not see revenue increase for years, and revenue is going to become more expensive.

However, if AMZ continue to invest in difficult logistical challenges, the small marginal gains in shipping time might suddenly add up to a leap: i'm imagining going from next day to a few hours.

edit: syntax, grammar

Going from 2 days to 1 day has always felt more like a luxury to me – and one I am willing to pay for when needed. For 95% of the purchases I make 2 day shipping is more than quick enough.

fwiw: Many of us dinosaurs remember when you ordered things on Amazon, and it took a week and cost shipping. Prime, and 2-day shipping, felt like a luxury you don't need. (And many of us thought long and hard if we should spend, and then it turned out to be really convenient...)

And those of us from the Triassic period even remember the days before Amazon, where you went to a bookstore, and you hoped they had a book that you needed, and if not, oh well, we can get it in 4-6 weeks. And then Amazon popped up, and you could just order online, and it felt like a luxury to have things in a week, and then we paid for it. We didn't need those books within a week, mind. It was the Triassic, we moved slowly, and 4-6 weeks for a rare book seemed just fine. (Because, amongst other things, it gave you an excuse to spend the next 4-6 weeks browsing what other books the store had ;)

I'm fairly certain the same will happen to 1-day. It'll feel like a luxury. It'll turn out to be convenient. It'll take a year or so, and then we'll all happily pay for it.

> And those of us from the Triassic period even remember the days before Amazon, where you went to a bookstore, and you hoped they had a book that you needed, and if not, oh well, we can get it in 4-6 weeks.

And that's if you knew it existed. If you were looking for an esoteric subject it was not trivial to discover what books on the topic were in print.

"Whaddya mean 'we', paleface?"

I'm a happy non-Prime Amazon customer. I buy plenty of things from them, and I basically never need anything faster than their free shipping (which I'm pretty sure they deliberately slow down, holding back dispatching in order to incentivize customers to get Prime). I could easily afford a Prime subscription, but I don't see how it's more worth the money than a hundred other things I could drop ~£100/year on.

Are there really so few other people who feel that way?

I dropped Prime a few years ago for all the reasons that have been hashed over many times. I've reduced my Amazon purchases drastically and not having Prime helps.

As far as the deliberate slow down is concerned, I'm positive that they are doing that because they tell me. About half my orders from them come 1 or 2 day shipping after a 5 day delay from the time I submit the order. I get an email telling me that the item has shipped and will arrive tomorrow or the next day. Then the transaction hits my credit card. It's super annoying and I'm sure they want it that way.

The goal(at some point) is to order something on a whim, at work, and have it waiting for you as you get home.

Or order something at night, and have it waiting for you when you wake up.

Is this luxury ? sure.

But they also give you a certain feeling of power.people crave power.

And less uncertainty, on those 2 days of waiting. And people dislike uncertainty.

And with delivery robots on the way - the price difference between 1-day and 2-day might be pretty small.

Luxuries have a way of becoming the norm. iPhone was a luxury, where Ballmer infamously laughed at its sky high price. [1]

1 day seems unnecessary sometimes, but more often it is fighting back trips to local retail for me. I.e. Terro Ant Bait with the recent change in weather in Portland.

[1] https://youtu.be/eywi0h_Y5_U

I see it as a moat for their core e-commerce business. Competitors will be forced to offer a similar experience and will likely burn a ton of capital to set that up. So not a revenue play in the near term, but it's something that keeps competitors out.

I like the article, but I think a missing piece of this is that when a company becomes a big enough conglomerate, parts can be in day 2 while other parts are at day 1. Amazon isn't raising money from investors anymore, it's taking profits on parts of the business and using it to expand in other places, and Bezos himself is famous for saying a profit margin is an opportunity for disruption.

That being said, in many ways the point of business is to end up a day 2 company. VCs invest so they can cash out in the IPO, IPO investors buy so they can sell to other investors, those investors sell to others, and so on. It sounds like the last guy is left holding the bag, but in fact, the people at the end can make a fortune, even as the company is fading away, if the company is distributing profits through dividends and buybacks. If a company dies before it gets to that end phase though, the whole thing will have just been a wealth transfer from later investors to the early ones.

> Amazon allegedly spent “years” deciding whether or not to do this, which is definitely not “high-velocity decision making”.

To be fair, the reality could be closer to "we decided not to do this at high velocity numerous times over the years"

TIL one-day (or, even same-day) amazon shipping isn't a thing outside of the UK?

It's not one-day for all of the UK either. ;)

Saying that as I lived in a ~reasonably remote part Cornwall at the time Amazon launched 1-day shipping in the UK. Bought stuff from them literally every day for a few months.

At first stuff really would turn up in 1 day, and it was awesome. However, after a while I guess they figured out it was costing them a fortune in delivery costs. So the 1-day thing silently became "2 day".

As in, when not logged in it, items would be shown as "Receive it by (say) Wed xx" on a Tuesday. After logging in and purchasing, the expected date would then become Thursday. Yes, even with Prime 1-day. ;)


For me it's a moot point anyway, as after some bad customer service experiences - dishonesty on Amazons part - I don't really buy anything through Amazon any more.

Only in major city's metro areas in the USA.

One day in (most of) Japan.

The final line really stuck out to me: "antitrust actions are a trailing indicator of a company that has peaked, not a causal force of decline"

What is the impact to the environment? I imagine speeding up the delivery leaves little room for delivery optimization.

1 day/same day shipping can be very useful a sometimes, but having it by default seems wastful.

The one-day shipping seems like an overreach to me, like Apple obsessing on making its laptops thinner when they are plenty thin enough. But I guess I'm not the target customer?

I wonder if the increased “harvesting” has to do with Bezos getting older.

Jeff Bezos does not have integrity. We know this because of the way he treated Mackenzie Bezos.

Now, we just have to see how far his lack of integrity will go in his business operation.

Tell us more about the in-depth and personal knowledge you have about the former Bezos marriage. Were you present for their marriage counseling? Their intimate disagreements? Tell us about how they interacted on a personal level and what their dynamic was together.

Marriages are complicated. What we see in public is very limited and far from the truth. Being the richest dude in the world means everything goes through a PR filter. Suggesting you know anything at all about their marriage is idiotic.

I say this as someone with no love for Bezos or Amazon. The assumption that you know something because you've read tabloids is a big reason the world is fucked right now

That's fair. I don't know what happened. But I assume he cheated on his wife. I consider that not having integrity.

If I'm wrong and he didn't cheat on his wife, then I stand corrected.

I disagree with your last statement. The problems with the world are because fewer people have integrity than because more people are believing tabloids.

He seemingly did have intimate relations with people other than his wife but there's a very wide spectrum of marriages out there.

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