21–30 of 119 posts
http://www.nytimes.com/2014/04/26/business/amazons-shrinking... I think a couple years ago they got tired of their stock tanking every time they reported a lower profit than previous quarters.
Wonder if they wouldn't be better off going private again
Summary: Because they're "proving" they can make a profit when they want to in preparation for spending a decade investing 100% of profits into building a world-wide logistics system. (I think it's an interesting theory, but the author provided little evidence.)
AWS, prime, and content have much higher margins than _objects_, so a small unexpected increase in sales creates a disproportionate amount of profit.
1) Shipping is the definition of a commoditized business. Unlike AWS, for example, they will not be pioneering a new business model or technology.
2) What they pay right now to FedEx, UPS, USPS, DHL, OnTrac, etc. should be very close to zero margin, given their position to negotiate those companies against each other in real time. Surely, the margin should be comparable to the cost of capital.
3) Amazon seems to represent less than 10% of packages in the US [1]. Given that they have to cover more or less the same area as other shipping companies have, they will not have the economies of scale of other firms, so their cost per shipment may end up higher.
https://www.quora.com/Shipping-What-percentage-of-UPS-shipme...
I find it very interesting to know what Amazon's competitive advantage would be from having their own logistics business. 1) Shipping is the definition of a commoditized business. Unlike AWS, for example, they will not be pioneering a new business model or technology. 2) What they pay right now to FedEx, UPS, USPS, DHL, OnTrac, etc. should be very close to zero margin, given their position to negotiate those companie…
I find it very interesting to know what Amazon's competitive advantage would be from having their own logistics business. 1) Shipping is the definition of a commoditized business. Unlike AWS, for example, they will not be pioneering a new business model or technology. 2) What they pay right now to FedEx, UPS, USPS, DHL, OnTrac, etc. should be very close to zero margin, given their position to negotiate those companie…
I'm guessing it's the one-hour-delivery thing - last year they started testing one hour delivery for popular products in a couple of pilot cities.[0]
Presumably they can't do one hour delivery with a traditional model of centralised-warehouse -> shipping company -> shipping company's regional hub -> customer; they need an Amazon warehouse near that city, with products dispatched from there to the customer directly, or it takes too much time. Building a warehouse and dispatch operation near every major city won't be cheap.
[0] http://www.bbc.co.uk/newsbeat/article/33332018/amazon-launch...
I find it very interesting to know what Amazon's competitive advantage would be from having their own logistics business. 1) Shipping is the definition of a commoditized business. Unlike AWS, for example, they will not be pioneering a new business model or technology. 2) What they pay right now to FedEx, UPS, USPS, DHL, OnTrac, etc. should be very close to zero margin, given their position to negotiate those companie…