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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.

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