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Amazon's minimum order size for free shipping is now $35

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Re: Amazon's minimum order size for free shipping is now $35

#141

Post by MichaelGG »

001sky wrote: post #138
MichaelGG wrote: post #132

Earlier quoted context omitted.

Can you elaborate? Google Finance shows a profit of $631M for 2011, and $1.1B for the year prior, while only a loss of $39M for 2012. Their IPO is $1.50 compared to $332 today. Did they really take on so much investment that they still haven't made it back?

The thing is, companies don't pay tax on sales, but on profits. And Amazon is a company with a very strange attitude to profit: it doesn't seem to like it. In the year 2012, it made a worldwide loss of $39m, even as it had sales totalling $61bn. That year was an aberration, with a costly acquisition weighing the company down, but previous years have been similar. 2011 saw just $631m net income on worldwide sales of $…

The parent to my comment stated it was a "charity" funded by investors. I've no idea if AMZN is a good stock investment. I'd just be surprised to find out that investors buying shares from the company have kept it afloat.

People buying shares on the market doesn't give any money to Amazon and is rather meaningless in this context.

Re: Amazon's minimum order size for free shipping is now $35

#143

Post by Zancarius »

jmccree wrote: post #131
cylinder wrote: post #77

Earlier quoted context omitted.

I love Prime, but there's no way that shipping a 20-roll pack of paper towels[1] that cost less than the store, in a giant cardboard box, in two days via an airplane to my door, is sustainable. They are taking a loss, even factoring in the membership fees, and at some point they won't be able to get away with it any longer. [1] Or a big heavy television. Or anything else you can find on Amazon.

I would guess this is why amazon keeps expanding their distribution footprint so much. I would hazard a guess a rather large percentage of the US population is already in a 2-day ground shipping radius. In the past couple years, I can only think of one or two things shipped via prime that came via air mail, even overnighted stuff came ground.

> I would hazard a guess a rather large percentage of the US population is already in a 2-day ground shipping radius.

I live in a fairly low population state, and there are at least 2 major UPS distribution centers within a 3-6 hour drive. My small town also has an UPS office and ground facility where shipments through them to the surrounding communities originate. Even FedEx has distribution centers nearby (although their shipping here is notoriously slow and clumsy).

So, I'd believe it. I can't think of anything gets shipped out here via air and much of this area is rural. The only reason Amazon's "free" shipping is slow to this region is likely because they probably hold orders destined for a specific area or zip code until they can get a bulk shipping rate on all of the items and send them out via the same carrier. I've speculated about this before because Amazon will happily hold onto items for 1-2 weeks via free shipping that will arrive within 2-3 days after they've been marked as "shipped." Amazon Prime shipped items usually arrive within 2 days, and like you, I'm pretty sure those are overnight ground.

Re: Amazon's minimum order size for free shipping is now $35

#144

Post by 001sky »

MichaelGG wrote: post #141
001sky wrote: post #138

Earlier quoted context omitted.

The thing is, companies don't pay tax on sales, but on profits. And Amazon is a company with a very strange attitude to profit: it doesn't seem to like it. In the year 2012, it made a worldwide loss of $39m, even as it had sales totalling $61bn. That year was an aberration, with a costly acquisition weighing the company down, but previous years have been similar. 2011 saw just $631m net income on worldwide sales of $…

The parent to my comment stated it was a "charity" funded by investors. I've no idea if AMZN is a good stock investment. I'd just be surprised to find out that investors buying shares from the company have kept it afloat. People buying shares on the market doesn't give any money to Amazon and is rather meaningless in this context.

I don't really have a bone in the fight, but to answer your question. In the world today, the company is governed by the extant investors (not the ones that give them money to start up or IPO). So the sentiments of those investors basically determine how the management gets compensated (how high the performance bars are, etc). In a normal world, the investors would tend to default to management provided that management is generating "returns on investment" in relation to the Capital at risk in the organization. For a compnay that is 15 years old+, its pretty odd to see a continual state of "strategic" losses. I don't think anyone is arguing that Amazon is stupid (investors or managment). The legitimate question is more like...what is everyon missing here?

Re: Amazon's minimum order size for free shipping is now $35

#145

Post by 001sky »

001sky wrote: post #66
codegeek wrote: post #17

I am amazed at how amazon remains doing business with so low margins or no profits. We love amazon at my house and being Prime members, we are almost ordering everything under the sun from Amazon that we possibly can. Here is why we love it: - The reviews are actually useful. I just bought a 70 inch TV through amazon and the critical and helpful reviews really helped me get going with settings on the TV that would ha…

I am amazed at how amazon remains doing business with so low margins or no profits. It's called the bait and switch? That's always how it works. They will extract value from you, likely in ways you don't understand. Or cant comprehend. At times you won't expect. Anything else is a mathematical impossibility, given the fiduciary repsonsibility of management. Its not if but when.

see: https://news.ycombinator.com/item?id=6594314

(Dont forget this applies to taxes as well through NOLs.)

Re: Amazon's minimum order size for free shipping is now $35

#146

Post by adolgert »

blisterpeanuts wrote: post #86
adolgert wrote: post #49

Is there a significant ethical difference between purchasing from a store or from a large online retailer? In one case, shipping to the store is bulk, and employees may make low wages, but they interact with other people. For a retailer Amazon's size, warehouses run on people who read orders from handheld devices and are timed for retrieval speed per box filled. Then shipping is done per parcel. How have you decided…

I suppose the same question could be asked about all those saddle makers and horse breeders when the age of the automobile arrived. Online retailing is a great innovation; it makes sense, it's convenient, the selection is 1000x better, the service is excellent (at least at Amazon), and it saves people having to drive somewhere. The reviews and comments are useful, the related items and "what people bought" sidebars a…

Maybe more apt a comparison would be a choice between custom-built automobiles and those from factory lines. At the time, there was fear that working in factories was dehumanizing. The ethical question is resolved politically, by having labor unions so that workers have some control. From the undercover reporting articles on Amazon's warehouses, there aren't labor unions.

Amazon does provide a lot that stores don't, but now you're asking what is the outcome of your choice for yourself, not for others. There is a lot of that same focus in the comments here.

Counterexamples of people who work in stores and don't enjoy their jobs are perfectly valid. I would focus, though, on what my choice of where I spend money offers as an opportunity to others. The opportunity in the warehouse depresses me. The opportunity in the store seems pretty OK.

I, too, want what Amazon has to offer, and those who can pay taking what is offered them is the way of the world, but I still have to make my own choice.

Re: Amazon's minimum order size for free shipping is now $35

#147

Post by VLM »

yvishyar wrote: post #133

In a decade it amazon has raised the minimum order by $10. Given that Amazon is a pure data driven company, we can guess this is the inflation cost which turn out to be 3.4% as per US Gov data the inflation for last decade is 2.29% I would rather believe amazon than the govt

Its not so much a matter of belief as the gov reported inflation rate is tied to innumerable fedgov dependents via cost of living allowance raises and so forth.

So the truth of the matter is the .gov is willing to pay its dependents 2.3% more, unfortunately inflation rate is somewhat higher, then again their cost of shipping is not necessarily numerically equal to the aggregate average inflation rate of every product for everyone purchased everywhere.

There is the obvious data gathering issue that amazon can't signal 6 sig figs of inflation accuracy, for marketing reasons it probably had to be rounded to the nearest $5, probably rounded up.

Re: Amazon's minimum order size for free shipping is now $35

#148

Post by EricDeb »

simplemath wrote: post #113
Spooky23 wrote: post #65

Earlier quoted context omitted.

> Also we compared the prices and it is almost impossible to beat amazon for these things as well. Huh? Where did you look? For formula, diapers, wipes, etc. Amazon didn't come close to Target, even without coupons. Amazon was like $23 for diapers that were $19.99 at Target. I've been a prime member forever, and wanted to use Amazon, but it easily cost 10-20% more, even with automatic ordering. Combine Target retail…

Costco. Even if all you bought at Costco was formula and diapers, you'd more than subsidize the $50 membership over the course of a year vs. what you'd pay basically anywhere else. Of course the economy of scale applies to that membership fee. Scaling across more kids makes a better value prop.

plus... if you spend enough (i.e. buy new tires there once a year) you can sign up for executive membership and get your membership paid for.

Re: Amazon's minimum order size for free shipping is now $35

#149

Post by mkr-hn »

steven2012 wrote: post #81
codegeek wrote: post #17

I am amazed at how amazon remains doing business with so low margins or no profits. We love amazon at my house and being Prime members, we are almost ordering everything under the sun from Amazon that we possibly can. Here is why we love it: - The reviews are actually useful. I just bought a 70 inch TV through amazon and the critical and helpful reviews really helped me get going with settings on the TV that would ha…

I came in to write exactly what you wrote above, point-for-point. I love Amazon, I with buying big-ticket items like stoves and refrigerators were easier through them. And I still have a bit of trepidation of buying TVs, etc, and would prefer going to Costco for those, since shipping back is so expensive in case something goes wrong. If they have a solution for that they will get all my business.

Look for a Sears Outlet: http://www.searsoutlet.com/

My parents bought a giant freezer for $100 from one years ago. It sips power and keeps a week supply of food frozen. The catch is that you might have to live with a harmless scratch or ding.

Re: Amazon's minimum order size for free shipping is now $35

#150

Post by kuwahara »

steven2012 wrote: post #81
codegeek wrote: post #17

I am amazed at how amazon remains doing business with so low margins or no profits. We love amazon at my house and being Prime members, we are almost ordering everything under the sun from Amazon that we possibly can. Here is why we love it: - The reviews are actually useful. I just bought a 70 inch TV through amazon and the critical and helpful reviews really helped me get going with settings on the TV that would ha…

I came in to write exactly what you wrote above, point-for-point. I love Amazon, I with buying big-ticket items like stoves and refrigerators were easier through them. And I still have a bit of trepidation of buying TVs, etc, and would prefer going to Costco for those, since shipping back is so expensive in case something goes wrong. If they have a solution for that they will get all my business.

Amazon has "Enhanced delivery" for things like TVs. Basically they use a special carrier that will come into your house and set-up the TV and make sure it's working before you sign for delivery. More info in the link below

http://www.amazon.com/gp/help/customer/display.html/ref=help...

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