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Exactly this - I will often go check up Amazon before I go grocery shopping, because I am a Prime member. Shipping is fast and free. In our area, we sometimes have the option for same day shipping, and products ordered in the morning arrive later that evening. Often, two day shipping results in next-day arrivals.

While Amazon isn't something I'd think of for groceries (we don't have "Fresh" in the area), there are things that it works well for -- deodorant, dog foods, that sort of thing, and where ordinarily, shipping costs would keep me from buying things online, Amazon has made that barrier go away entirely.

Now I prefer to shop on Amazon wherever I can. Even if the only advantage is one less bag I have to haul from the car to the house, that's often worth it enough for me to buy on Amazon vs. brick and mortar. I won't pay more to shop on Amazon, but for things that are same cost or cheaper, it's usually the way I go, if only to justify my Prime membership.

I'm also a Prime member but the main reason I go with them is to reduce risk. It reduces the risk that I will by a faulty product due to the reviews and return policy and it reduces the risk that I will drive to a store and be unable to buy what I originally came for which may necessitate another trip.

I also use Amazon for "groceries" just not fresh ones. In the past I've bought snacks, ramen, and peanuts from them.

That opens up a whole other can of worms though. How is Amazon making money overnighting me deodorant for cheaper than what I can buy at Safeway? I know there is an argument about all the other higher-margin items I buy from prime, but seemingly 95% of my prime purchases are for items where I would be surprised if their margin exceeded the cost of expedited shipping.

Presumably they have good knowledge of the distribution of consumer behavior and have figured out how to make money in aggregate, despite the presence of people like me. I agree with Manjoo though, at times it's hard to believe.

How is Amazon making money overnighting me deodorant for cheaper than what I can buy at Safeway

Your local safeway had to have that deodorant shipped at some point, too.

Then they had a shop clerk unbox it, put a label on it, place it on a shelf, eventually drag it over a scanner and (in america) put it in a nice brown paper bag for you.

The brown paper bag, the scanner, the shelf, the label, the clerk, and no least the brick & mortar store surrounding all that costs Safeway significant amounts of money - in addition to the truck that initially shipped the deodorant.

Amazon pays only the truck.

Also, your local Safeway has to eat a lot more money stocking products that never get sold than Amazon does.

1) Amazon is good at anticipating demand, so they can make sure some deodorant is always at a fulfillment center near you.

2) Overnight shipping is cheap if the distance is short, because then it's really just "shipping a short distance, which happens to be during the night".

3) You still have to pay shipping at Safeway, and you also have to pay for Safeway's smaller economy-of-scale inventory system.

4) Amazon wants you to love shopping with them, and they play the long game. They'll take a loss on deodorant to win a customer.

I saw Jared Spool give a really great talk (http://www.slideshare.net/jmspool/revealing-design-treasures...) about Amazon once, but this slide specifically addresses what you're talking about: http://i.imgur.com/ZQpWe.png

Also, I accidentally learned that pressing ~ twice while focused on a SlideShare presentation gives you their dev log. http://i.imgur.com/e2rBO.png

The thing is, most of the time, it isn't overnighted. It's a couple of days before you get your deodorant unless you pay $4 per item. For that expensive gadget you need tomorrow or the day after, it's worth it, not so for your deodorant.

There are great reasons to have Prime like carrying in less groceries, but it's irrational to buy at Amazon to justify your Prime membership because doing so doesn't provide you any additional benefit.

The Prime membership is sunk cost, no doubt.

But once you've paid it, any given purchase is "should I drive down to the store to get it, Amazon it for 'free', or pay some other retailer for online shipping?". And at that point, the Amazon choice wins more often than not.

And while amazon does incorporate the price of 'free' shipping into their base (I often see, ON AMAZON, the same item from a non-prime-eligible vendor for $4 less than prime elligible), I know that when I order something with prime shipping, it gets there within 2 days at most, and has a hassle free return policy.

So really, the $80 serves too reasons: To defray some of amazon's costs, and to weed out serious buyers from non serious buyers -- they'll lose money on "free shipping" for people who only buy 5 items a year, so they pick a price point which is a no-brainer for anyone whom won't be a losing customer for them.

Yes, it does. The added discounts, added features (free video streaming, free MP3s from time to time, free 2-day shipping, occasional free ebooks), and convenience more than make up for the membership cost.

It's irrational not to use Amazon when you're a Prime member.

Sure, those are all reasons when considering my next purchase I should buy from amazon. But I shouldn't think to myself "I spent $80 on amazon prime, I should get my money's worth"

I know these comments sound dickish, but I really believe that making a habit out of avoiding the sunk cost fallacy is helpful

Well, for the most part, my expenditure on Prime is usually justified within weeks after I renew it. I work from home, in the suburbs, and do quite a bit of my shopping online.

I have, within the past month or so, bought inner tubes for my bike, other bicycle accessories for the new bike I just bought (pump, water cage, water bottle, wedge pack), a pair of boots, a new Aeropress, one paperback (for the daugher) and a smattering of Kindle books.

I don't shop just to justify the sunk cost, but it should probably go without saying that while some (or none) of those purchases may not have been the very best price I could have found them for, they were all priced reasonably, and I suspect, well below what I would have found them for at the nearby brick and mortars, without having had to leave the house for it.

That said, ignoring the 'sunk cost fallacy', as the chances of finding 'better-than-Amazon' prices locally are slim to none, I am an idiot if I don't buy from Amazon wherever it makes sense to. Obviously, packs of deodorant and shampoo are borderline, but free shipping on a lawn mower that's half the cost of Home Depot? Ideal use of Prime membership. Not exercising it means paying more, and going through considerably greater effort to do so (lugging the box around, borrowing an appropriate vehicle to carry a lawn mower, etc.)

Not sure why you're getting downvoted, as from a purely economic standpoint that is exactly right. I think the point other people are trying to make is that given you have already subscribed to Prime, things you would already have purchased are now available for less via Amazon.

Like for many other things, people who bought a prime account will probably rationalize to themselves that they made the right decision.

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