Amazon Prime members buy twice as much, don't compare on price • Hacker News Board

Re: Amazon Prime members buy twice as much, don't compare on price

#41

Post by ww520 » Mon, Feb 27, 2012, 6:23 PM UTC

ryandvm wrote: post #2

Amazon 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.

It is a brilliant use of a simple psychology concept - Sunken Cost. People tend to go further to justify the sunken cost. The Prime members become Amazon's captive audiences. Same thing with the Costco/SamsClub members.

Re: Amazon Prime members buy twice as much, don't compare on price

#42

Post by icey » Mon, Feb 27, 2012, 6:23 PM UTC

pja wrote: post #40

Lewisham wrote: post #10

Earlier quoted context omitted.

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.

Yeah you can return stuff...right until they decide you're an unprofitable customer and drop you like a hot brick.

Does this happen frequently? I haven't heard about Amazon doing this before.

Re: Amazon Prime members buy twice as much, don't compare on price

#43

Post by minouye » Mon, Feb 27, 2012, 6:24 PM UTC

gacba wrote: post #18

The question every entrepreneur should be asking themselves here is, "How can I create the same kind of fervor that Amazon did by introducing Prime?" Amazon generates 130% more business per subscriber just by losing a mere $11/subscriber. Those are numbers that anyone could salivate at.

ShopRunner has basically productized Prime. $79 annually or $8.95 a month--merchant coverage is mainly across (formerly) GSI Commerce affiliated stores.

http://www.shoprunner.com/

Re: Amazon Prime members buy twice as much, don't compare on price

#44

Post by ja27 » Mon, Feb 27, 2012, 6:25 PM UTC

gmichnikov wrote: post #31

Duff wrote: post #20

My sister gave me a $25 BestBuy gift card last Christmas. I went to BestBuy, and found that for each of the 3 different things that I needed, I would spend less by buying it on Amazon, even with the gift card. Tax software, for instance, was $49.99 at BestBuy, $16.99 on Amazon.

In some stores you can spend your Best Buy gift card on an Amazon gift card.

I'll have to look for that. My in-laws give me a Best Buy card every year for Christmas and half the time I use it to buy their Christmas gift the next year. Amazon gift cards get spent right away.

Re: Amazon Prime members buy twice as much, don't compare on price

#45

Post by jm4 » Mon, Feb 27, 2012, 6:26 PM UTC

daeken wrote: post #13

I've had Prime for almost a year and a half now, and I've spent well into the 5 figures on Amazon as a result. I'm not sure I've always saved money, but the fact that I can get damn near everything in no more than a day has just been great. I've bought desks, chairs, monitors, computers, etc and had them all the next day for $4. There's just no way to beat that, in my mind.

I bought a generator from them and got the free 2 day shipping. That thing was like 200lbs. A guy delivered it in an 18-wheeler and had to drive that thing through a little traffic circle in my neighborhood. I felt a little bad about that one.

I've spent an obscene amount of money in the 3 years I've had prime. I've definitely saved money on the necessities, but it's easy to one-click the impulse stuff. The subscribe and save stuff is great too. In my opinion, Amazon Prime is the best deal in online shopping.

I routinely find items priced lower someplace else online, but the difference is usually less than the cost of shipping. I go out to stores much less than I used to, and when I do I compare everything to Amazon. It's not uncommon for me to purchase several items from my phone and walk out empty handed. It's getting to the point where I mostly only go to stores for food and things that can't wait a day.

Sooner or later brick and mortar retailers are going to experience massive fallout from Prime.

Re: Amazon Prime members buy twice as much, don't compare on price

#46

Post by swalsh » Mon, Feb 27, 2012, 6:31 PM UTC

onemoreact wrote: post #36

gacba wrote: post #18

The question every entrepreneur should be asking themselves here is, "How can I create the same kind of fervor that Amazon did by introducing Prime?" Amazon generates 130% more business per subscriber just by losing a mere $11/subscriber. Those are numbers that anyone could salivate at.

Considering $35 comes from acquiring digital video content. Prime was making money until Amazon did that bizarre video play.

On the other hand, Amazons free digital content was the last point I needed before I decided to purchase a Google TV. For a while I was only consuming the free content, but now i'm about 70/30, where about 70% of what I consume digitally is paid content.

Re: Amazon Prime members buy twice as much, don't compare on price

#47

Post by lhnn » Mon, Feb 27, 2012, 6:31 PM UTC

•Represent 4% of Amazon's customer base

•Spend 130% more than regular Amazon customers. (source)

•May be responsible for as much as 20% of Amazon's overall sales in the U.S.

Eh... those numbers don't line up.

Re: Amazon Prime members buy twice as much, don't compare on price

#48

Post by dustingetz » Mon, Feb 27, 2012, 6:31 PM UTC

onemoreact wrote: post #36

gacba wrote: post #18

The question every entrepreneur should be asking themselves here is, "How can I create the same kind of fervor that Amazon did by introducing Prime?" Amazon generates 130% more business per subscriber just by losing a mere $11/subscriber. Those are numbers that anyone could salivate at.

Considering $35 comes from acquiring digital video content. Prime was making money until Amazon did that bizarre video play.

> Prime was making money until Amazon did that bizarre video play.

they're pretty smart folks, lets speculate what insight this might give us. maybe they think that by bundling video and shipping, they can funnel content consumers from kindle/fire to their product store?

Re: Amazon Prime members buy twice as much, don't compare on price

#49

Post by marklabedz » Mon, Feb 27, 2012, 6:33 PM UTC

ericdykstra wrote: post #22

Amazon Prime and Amazon "subscribe and save" are two excellent products. I love reducing trips out to crowded stores and time thinking about shopping choices. I don't have to worry about customer service, returning defective products (relatively, way easier on Amazon), etc. I think Jason Calacanis' article about the "Cult of Amazon Prime" hits on a lot of what has made it so successful, and what will make it successf…

Absolutely agree. Prime has made Amazon my first choice for any one-off item because its that much easier than fighting traffic, other shoppers, and checkout lines.

Subscribe and Save is slowly eliminating my need to go to Target for the same reason. Every month, I bought the same things from Target. Now, it "magically" shows up via UPS and I can easily adjust if I notice I'm running short on napkins or have plenty of tissues in the closet.

These two models have created a tremendous amount of lock-in. Its a win for Amazon (I buy more) and a win for me (less time/less hassle/almost always less money).

Re: Amazon Prime members buy twice as much, don't compare on price

#50

Post by Lost_BiomedE » Mon, Feb 27, 2012, 6:35 PM UTC

When I shop prime, I usually compare to local price and hassle. Sometimes finding a specific brand or niche product locally will take hours, and sometimes span multiple days to fit my schedule. The items I would have bought on amazon pre-prime, I still compare on price, but these have become the minority of orders for me.

My shopping now is the grocery store, dollar store, clearance clothes from big box stores, and amazon. The exception to this is hobby stuff that occurs at shows.