The Illusion of a Profitable Amazon Prime Now and Prime Fresh

If you assume a driver’s wage is at least the Seattle minimum wage of $15 per hour, add nominal fulfillment and delivery costs of $5 per order (the contractor’s fuel, car etc.) and nominal sales and marketing and general administration costs of $5 per order, Amazon needs to fulfill close to eight minimum order ($35) deliveries per hour to breakeven just on the variable costs

Across 25 associates, the average number of orders was only 3.

There's a third option for how this service survives: increase adoption so that:

- variable SG&A drops from $5 per order

- stops are closer so delivery costs drop from $5 per order

- drivers can deliver more orders per hour

Re: The Illusion of a Profitable Amazon Prime Now and Prime Fresh

#6

Post by daxorid » Fri, Mar 30, 2018, 5:28 PM UTC

rabboRubble wrote: post #3

I tell you, this service has been a godsend. Emergency trip to the hospital, no food at home? Prime Now. Living alone sick, no food in the home? Prime Now. Parents feeling poorly and I'm 3 states away? Prime Now.

[edit] Disregard, can't ask an earnest question on HN either.

Re: The Illusion of a Profitable Amazon Prime Now and Prime Fresh

#7

Post by pontifk8r » Fri, Mar 30, 2018, 5:28 PM UTC

The article estimates certain costs (e.g. $5 paperwork/overhead) without much factual evidence. Relatively small reductions in those costs could make all the difference in profit or loss on any particular order.

Re: The Illusion of a Profitable Amazon Prime Now and Prime Fresh

#8

Post by Eric_WVGG » Fri, Mar 30, 2018, 5:30 PM UTC

daxorid wrote: post #6

rabboRubble wrote: post #3

I tell you, this service has been a godsend. Emergency trip to the hospital, no food at home? Prime Now. Living alone sick, no food in the home? Prime Now. Parents feeling poorly and I'm 3 states away? Prime Now.

[edit] Disregard, can't ask an earnest question on HN either.

My goodness. Most people I know have refrigerators full of condiments. I have that and two bottles of seltzer.

Re: The Illusion of a Profitable Amazon Prime Now and Prime Fresh

#9

Post by [deleted] » Fri, Mar 30, 2018, 5:32 PM UTC

daxorid wrote: post #6

rabboRubble wrote: post #3

I tell you, this service has been a godsend. Emergency trip to the hospital, no food at home? Prime Now. Living alone sick, no food in the home? Prime Now. Parents feeling poorly and I'm 3 states away? Prime Now.

[edit] Disregard, can't ask an earnest question on HN either.

[deleted]

Re: The Illusion of a Profitable Amazon Prime Now and Prime Fresh

#10

Post by ineedtosleep » Fri, Mar 30, 2018, 5:34 PM UTC

daxorid wrote: post #6

rabboRubble wrote: post #3

I tell you, this service has been a godsend. Emergency trip to the hospital, no food at home? Prime Now. Living alone sick, no food in the home? Prime Now. Parents feeling poorly and I'm 3 states away? Prime Now.

[edit] Disregard, can't ask an earnest question on HN either.

I suppose if you take it literally, this isn't too common a thing. Having a week's supply of _food_ is easy, but if you want to have a weeks supply of _meals_ that's a different situation.