Amazon Prime members buy twice as much, don't compare on price
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Re: Amazon Prime members buy twice as much, don't compare on price
#2Amazon Prime was a brilliant move. Get people to pay what is probably less then the average user's shipping costs for a year and then they'll refuse to buy products from anyone but you. And now it turns out they'll even go as far as ignoring pricing to quell cognitive dissonance. Nice.
Re: Amazon Prime members buy twice as much, don't compare on price
#3"82% of Prime members buy on Amazon even if the item is less expensive somewhere else"
The supposed "source" referenced another study (sans link), so I can't get the answer to the obvious question: Was "less expensive" computed using the marginal cost to the customer of this particular purchase? Meaning, do other sites offer the widget for a few dollars less but charge a lot for 2nd day shipping?
I'm a Prime customer, and I've mostly given up on comparison shopping for small items. Amazon's prices are usually good enough that, especially coupled with the free 2nd day shipping, my effective "wage" for comparison is too low to make it worth it. Nevermind the "it just works" feature of Amazon's system (not just website -- the entire process by which a widget comes to my house).
My wife and I have forced ourselves to change our shopping behaviors and ask ourselves before thinking about leaving the house, "Do I really need this thing now, or can it wait a day?" $4 for overnight shipping is a bargain compared to wasted time, gas, etc. Stores are harder and harder to justify. That my wife finds ordering a bunch of clothing, trying stuff on at home, and returning what she doesn't want to be much more efficient makes me wonder what the future of retail clothing becomes. She sometimes even regards the "home try-on" process as superior because she can see how a new item of clothing looks with other, previously purchased garments.
Re: Amazon Prime members buy twice as much, don't compare on price
#4"Amazon spends more than $90 a year for each Prime customer, losing $11 annually for each subscriber."
"Losing"? If the other stat of purchase volume increasing from $400 to $900 is true, Amazon is buying volume business for just a 1% discount. I wonder how the profit margins skew between average purchases and those which only happened because a customer had signed-up for prime? I recently ordered some collar stays and had them overnighted for $4. Their cost was $20 for what amounted to some little pieces of stainless steel (exactly what I wanted). The margin on these has to be much better than a DVD player.
Re: Amazon Prime members buy twice as much, don't compare on price
#5I have been surprised that Amazon has not vertically integrated into delivery and distribution. Imagine if they had bought DHL. They would have turned what must today be a huge variable cost into a largely fixed one. I don't have time to write about all the interesting innovations in distribution which could result from combining warehousing and delivery. Perhaps fears of antitrust lawsuits and hardball tactics from UPS/FedEx keep Amazon from doing what I consider an obvious next step?
Re: Amazon Prime members buy twice as much, don't compare on price
#6Once given Amazon Prime as a gift, I noticed the free shipping started me buying a lot more from Amazon, even if the price ended up slightly more than non-Prime items + their shipping costs. I definitely compare price, but more often than not the difference is so small I convince myself just to go with Amazon Prime versions for like a $1.99 more. Basically it means that for a small dollar or two more I get items quickly.
Re: Amazon Prime members buy twice as much, don't compare on price
#7I have been surprised that Amazon has not vertically integrated into delivery and distribution. Imagine if they had bought DHL. They would have turned what must today be a huge variable cost into a largely fixed one. I don't have time to write about all the interesting innovations in distribution which could result from combining warehousing and delivery. Perhaps fears of antitrust lawsuits and hardball tactics from…
I'd guess that the largest varying factor would be the cost of fuel. Amazon could just hedge on the price of oil and remove the financial uncertainty.
Re: Amazon Prime members buy twice as much, don't compare on price
#8I have been surprised that Amazon has not vertically integrated into delivery and distribution. Imagine if they had bought DHL. They would have turned what must today be a huge variable cost into a largely fixed one. I don't have time to write about all the interesting innovations in distribution which could result from combining warehousing and delivery. Perhaps fears of antitrust lawsuits and hardball tactics from…
I'd guess that the largest varying factor would be the cost of fuel. Amazon could just hedge on the price of oil and remove the financial uncertainty.
Amazon probably either explicitly hedges already or does so implicitly by "purchasing" a forward contract for shipping rates from UPS. The risk of varying fuel costs exists no matter who takes ownership of it.
Re: Amazon Prime members buy twice as much, don't compare on price
#9"82% of Prime members buy on Amazon even if the item is less expensive somewhere else" The supposed "source" referenced another study (sans link), so I can't get the answer to the obvious question: Was "less expensive" computed using the marginal cost to the customer of this particular purchase? Meaning, do other sites offer the widget for a few dollars less but charge a lot for 2nd day shipping? I'm a Prime customer…
There's also the money you save but not stepping foot in a store. That is, you don't throw extra items in your cart out of temptation.
Re: Amazon Prime members buy twice as much, don't compare on price
#10"82% of Prime members buy on Amazon even if the item is less expensive somewhere else" The supposed "source" referenced another study (sans link), so I can't get the answer to the obvious question: Was "less expensive" computed using the marginal cost to the customer of this particular purchase? Meaning, do other sites offer the widget for a few dollars less but charge a lot for 2nd day shipping? I'm a Prime customer…
I think the other thing that's missing from this is that Amazon's customer service is really very good. I'll spend the extra dollars buying something from Amazon than, say, one of their third-party merchants, because I know Amazon will take care of me if anything bad happens.