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Please don't.
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Amazon’s Battle to Break into the Grocery Market
91–100 of 112 posts
Re: Amazon’s Battle to Break into the Grocery Market
#92Grocery net profits are 1.7%. http://www.fmi.org/research-resources/supermarket-facts Amazon barely makes money on retail operations. What is their rationalization in getting into this market?
I am really skeptical of this. Most retail stores sell at a 1.5X-2X markup from wholesale, and the big grocery chains around me have massive private label businesses. This statistic might be missing the extra profits they get from owning their own food brands as those might belong to separate companies?
Re: Amazon’s Battle to Break into the Grocery Market
#93Physical supermarkets can still be really terrible. It always seems to take me over an hour to do my grocery shopping. My idea to bring the industry into the 21st century would be take a similar route to Blue Apron et al, where all the ingredients are combined into a single package. The difference is that the work of preparation would be distributed to local restaurants looking to supplement their income, and people…
I've thought about this in similar ways. The reason I don't use Blue Apron is because it's pricey--$10/meal when you're cooking at home isn't very affordable unless you're a lot of disposable income. But I understand why it's expensive. Each box of ingredients must be shipped with multiple cooling packs to keep it from spoiling, and shipping to each individual's doorstep also adds costs. Imagine if grocery stores off…
i find it pricy too, I cant imagine what someone in a lower cost of living area(than sf, so everywhere) thinks of the price. Packaging waste is a big complaint my friends have, easier to swap out reusable packages if its at a store. And I have to go to the store anyway for perishables(eggs/milk/etc), so blue apron doesnt even save a trip to the store. id buy this too
Re: Amazon’s Battle to Break into the Grocery Market
#94Physical supermarkets can still be really terrible. It always seems to take me over an hour to do my grocery shopping. My idea to bring the industry into the 21st century would be take a similar route to Blue Apron et al, where all the ingredients are combined into a single package. The difference is that the work of preparation would be distributed to local restaurants looking to supplement their income, and people…
I've thought about this in similar ways. The reason I don't use Blue Apron is because it's pricey--$10/meal when you're cooking at home isn't very affordable unless you're a lot of disposable income. But I understand why it's expensive. Each box of ingredients must be shipped with multiple cooling packs to keep it from spoiling, and shipping to each individual's doorstep also adds costs. Imagine if grocery stores off…
At Safeway, this is referred to as, "The Deli".
Re: Amazon’s Battle to Break into the Grocery Market
#95“It takes a lot of time and experimentation to work through unpredictable scenarios like a child picking up an item or a person wearing sunglasses or a face muffler,” he said. This is funny. Because these aren't unpredictable scenarios at all in a grocery store, unless you are having to write software to deal with them.
I'll be a believer when it can handle a Thomas Crown scenario - multiple people in the same outfit crisscrossing around each other. While a bowler hat flashmob is unlikely, a group of similar dark jackets etc isn't.
Protip: Avoid going to the closest Amazon Go store after a Seahawks game. Unless you're wearing Broncos gear.
Re: Amazon’s Battle to Break into the Grocery Market
#96Earlier quoted context omitted.
Sure, but who'd actually trust Amazon with their food? I know I wouldn't, they've screwed up 3 out of 5 orders in the past year, leading me to have little faith that they won't give me E Coli covered veggies. They're opening a large, car centric Amazon Grocery pickup location just over in Ballard as a test, but the particular location they picked is a parking lot for 3 to 4 hours a day, and is over 3 blocks from tran…
Since the article stresses repeatedly that Amazon is all-in on produce... I think this is a big question for their ML approach. One of the annoying parts of not-really-self-checkout that is available in big grocery stores today is that you have to scroll through a screen, choose the correct brand (i.e. Dole Banana), and then weigh it before it prices your order. Wonder what their strategy is to price variable weight…
FYI, the code for fresh produce is usually printed on the little sticker or on the tie.
Re: Amazon’s Battle to Break into the Grocery Market
#97Earlier quoted context omitted.
Your model is too simplistic here. The actual cash leaving Amazon's bank account may not be due to their supplier until 30 or 60 days after delivery. If it takes Amazon 6 days to sell that $100 worth of goods, they can effectively sell $1000 worth of product before that initial cash is due to the supplier if we're talking net 60. This is how a $100 initial cash investment in inventory can produce $17 worth of cash at…
You're desperately trying to contrive a scenario that does not exist, the rate on buying merchandise and selling it in groceries is still 1.7%. Borrowing money and playing with the time window does not change this.
Real estate appreciates at 4% (on average, but let's say it's constant for the sake of argument).
I buy a house that costs $100,000. My down payment (cash out of pocket) is $20,000.
I pay 3.5% interest on $80,000 as I'm paying down the loan, plus property taxes and insurance, and it comes to $546.74/month [1]. The rent comes in at $550/month, pretty much canceling out the mortgage.
Am I making 4% per year on my investment, then, because that's the amount the real estate appreciates?
No, I'm making 4% of $100,000 per year, or $4,000, on my $20,000 investment. That's 20% per year. [2][3]
Leverage properly applied can raise your net profit.
You're welcome.
[1] http://www.mortgagecalculator.org/
[2] The numbers can realistically be much better than this, given the right circumstances. I am personally using this as an investment strategy, and yes, it doesn't just work this way "in theory."
[3] I'm ignoring repairs and vacancy rate for simplicity. Those obviously hurt profitability. But as I mentioned in [2] above, if you pick your investment property strategically, your margins are much higher, so that's your cushion.
Re: Amazon’s Battle to Break into the Grocery Market
#98Grocery net profits are 1.7%. http://www.fmi.org/research-resources/supermarket-facts Amazon barely makes money on retail operations. What is their rationalization in getting into this market?
From the article >“Amazon wants to be the first thing any consumer thinks of when they need to buy anything,” said Jim Hertel, a senior vice president at marketing technology company Inmar Inc. “Food is the largest retail category. They can’t do what they want to do without grocery and they’re definitely not going to give up.” I'd also imagine Amazon thinks they can do much better than a 1.7% margin by leveraging all…
Wildly overconfident cost predictions are amazon's #1 growth market.
Re: Amazon’s Battle to Break into the Grocery Market
#99Earlier quoted context omitted.
I've ordered groceries with Prime Now a few times and never once was worried about trust. I'd probably trust their produce more as the people who have also touched it aren't random shoppers.
Sure, but that isn't the prime vector of E Coli and other illnesses spreading. E Coli literally comes from workers shitting in the fields due to the breakdown of the labor movement, as they are not allowed breaks or access to a bathroom with a place to wash afterwards. Thus how you end up with Chipotle serving up E Coli covered veggies. Not having a store that your food comes from might make for a safer mental pictur…
> Not having a store that your food comes from might make for a safer mental picture, but Amazon is going to go with the cheapest vendor every time, and they don't have the scale of Kroger or HEB to knock prices down anywhere near them, thus they must buy lower quality goods to hit the same price point.
It's a dangerous game to bet against Jeff Bezos losing because Amazon lacks scale and problems hitting price points. Amazon may not have the grocery scale of Kroger today, but it also has billions of dollars to spend, a different cost structure and no need to compete with existing grocery chains completely on price (it's a different service, Kroger won't be at my door within two hours).
Re: Amazon’s Battle to Break into the Grocery Market
#100Earlier quoted context omitted.
You're desperately trying to contrive a scenario that does not exist, the rate on buying merchandise and selling it in groceries is still 1.7%. Borrowing money and playing with the time window does not change this.
I'm not going write a long explanation about this, but "borrowing money" and "playing with the time window" is the foundation of so many different kinds of businesses I can't list them all.
Float doesn't change the profit MARGIN.