Can Amazon Deliver?

[killbilly]

Amazon Web Services (the data side) is giving Microsoft and Rackspace a real run for their money. We're looking carefully at them for certain platform services - there's a heck of an offering and a lot of value there. I can see why they're growing.

 

[derg]

Shut your mouth...Santa is so real !1!!

"He comes down your fireplace!"

"I don't have a fireplace"

"He's got keys!"

"Some dude with magic flying reindeer has keys to my house? Please"

My pragmatic perspective began almost at birth. I was the kid thinking "huh, clever" instead of "WHOAAAAAH, it's MAGIC!" at magic shows.

 

[Cessnaflyer]

I propose that Amazon, as an electronic retailer, has chosen to use shipping in place of physical retail space (i.e...they very much have robbed occupancy to pay for shipping). Every retailer must have a distribution network... Amazon choses to own theirs, just as virtually all of the big retail chains in America do. There's no disputing that those costs are real. There's also an economy of scale to them that gives large retailers an advantage over small retailers. Sadly, Walmart didn't kill small-town America -the ability to create complex logistical systems using IT did.

Yes, Amazon has a distribution network that costs money to operate. Investors seem to think they're operating it pretty effectively. Over the last 5 years, their market valuation has gone up by about 4x. Also, as @Derg points out, they've been able to place a greater percentage of the shipping burden onto the purchaser. I see that trend continuing with nary a peep from consumers.


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To your point though, total shipping costs have risen while oil prices have slacked off. What will happen if oil gets above $100 a barrel? I believe Amazon can weather that storm better than Walmart just based on how their businesses are structured -Amazon is increasingly trying to be a content and cloud business.

Walmart has quite an amazing distribution system not reliant on shipping companies and I think they easily have amazon beat in that department. What I would think would work well would be to pick off shelves of stores for e commerece and be even that much closer to the customer.

 

[JOEFRIDAY2]

Walmart has over 3000 US distribution centers (AKA: WAL MART Stores) that they can pull and deliver (the same day) from if they ever decide they want to. That would put a hurting on Amazon.

 

[NickH]

Walmart has over 3000 US distribution centers (AKA: WAL MART Stores) that they can pull and deliver (the same day) from if they ever decide they want to. That would put a hurting on Amazon.

Walmart.com's ship to store is already a challenge...

 

[FlyingAccountant]

Walmart has over 3000 US distribution centers (AKA: WAL MART Stores) that they can pull and deliver (the same day) from if they ever decide they want to. That would put a hurting on Amazon.

It would also put a hurting on their own B&M stores.

 

[Cessnaflyer]

It would also put a hurting on their own B&M stores.

What's nice for the site to store is when people go in to pick up their items they usually purchase other things as well they might not have. The shipping from the store will hurt people coming in but it would be a heck of a lot better than everyone's default to Amazon.

 

[derg]

I might even get out of the Amazon game.

I loathe Wal Mart but love Amazon. But at the end of the day, every time I click on Amazon, I'm losing my "Shop Local" crusade.

 

[Adler]

I might even get out of the Amazon game.

I loathe Wal Mart but love Amazon. But at the end of the day, every time I click on Amazon, I'm losing my "Shop Local" crusade.

But Amazon is my local shop. No matter what hotel room I'm in, amazon.com is always close by.

 

[derg]

But Amazon is my local shop. No matter what hotel room I'm in, amazon.com is always close by.

And the 'tubes and the 'hubs. Yeah, I know. It's the red light district wherever you are!

 

[B767]

And the 'tubes and the 'hubs. Yeah, I know. It's the red light district wherever you are!

There's better ones out there that don't put a strain on the cheap hotel wifi as much as the 'hubs. Picture isn't as clear, but in the end, who really cares?

Wait, did I just put that on the interwebz?

 

[mshunter]

Walmart has over 3000 US distribution centers (AKA: WAL MART Stores) that they can pull and deliver (the same day) from if they ever decide they want to. That would put a hurting on Amazon.

But it doesn't. Because Walmart sucks at it. When I used to shop at Walmart, I had to have something"distributed" from another store, and it took almost three weeks. By then, I had found it somewhere else online(can't remember if it was Amazon), and had it two weeks earlier. Walmart also sells item's at a different price online than they do in stores. Pretty much 'eff Walmart.