Amazon Bought Me for $100 a Year

http://www.travisllado.com/2016/01/amazoncom-bought-me-for-100year.html

by charlieegan3 • 11 years ago

76 66 11 years ago

ktamura2• 11 years ago

Amazon Prime is successful for the same reason Uber or Lyft are: instant gratification relative to alternatives.

My mother, who lives in remote mountains in Japan, is a die-hard Amazon Prime fan. Why? Because it manages to deliver any item to her place across many SKUs. It's more convenient -and often faster- for her to order something on Amazon than to drive 30 minutes to shop at the closest electronics shop. I've been amazed with how good Amazon's logistics is even in rural Japan.

The elusive "aha" moment is actually not that complicated in theory: just provide value faster than alternatives while ensuring quality. In Uber/Lyft's case, it's a safe ride from A to Z arriving in a few minutes. In Amazon Prime's case, it's any merchandise on your doorstep. In AWS's case, it's computing resources at your fingertips in minutes.

It's easier said than done =)

chinathrow• 11 years ago

The trick with Prime however is, that you pay a 100 bucks a year and then feel the urge to get something back in return - ie faster shipping against non-Prime customers, etc.

Clever, Amazon, clever.

copperx• 11 years ago

Kind of obvious, but it depends on your personality. Last year I got Prime and bought a grand total of 1 item in the entire year -- mainly because I research most purchases and Amazon is frequently the most expensive place to get something.

douche3• 11 years ago

On the other hand, it doesn't take long to recoup that $100 worth of free, 2-day shipping, compared to the exorbitant rates that you used to have to pay for similar service from other retailers, or even $8-10 shipping and handling for standard shipping that catalogs used to charge.

tokenadult• 11 years ago

That's just the sunk cost fallacy. A lot of us still comparison shop. I buy from other sellers, but Amazon often has better terms (more reliable delivery, for one) and better prices than the other sellers I shop at.

peteretep2• 11 years ago

I never felt that obligation. However, I note that when I don't have Amazon Prime, I abandon a fair number of purchases at the shipping page because the extra shipping cost gives me pause.

ac292• 11 years ago

It's more convenient -and often faster- for her to order something on Amazon than to drive 30 minutes to shop at the closest electronics shop

Prime delivers in under an hour in rural Japan?

apendleton2• 11 years ago

No, I think it's a different sense of "faster" -- it delivers with less than an hour's effort on the part of the customer.

peteretep2• 11 years ago

At least one flawed assumption you make here is that the drive can be executed immediately.

ktamura2• 11 years ago

It's more like, my mother goes to the shop, the store person looks up the inventory, doesn't find the item, she asks them to order it, etc.

Prime usually delivers within a day or two, unless heavy snow closes off the only semi-paved road leading up to her place :-)

brobinson2• 11 years ago

I agree, but Prime's quality has been slipping a lot for me in the last year. My last few orders from Amazon have been a complete shitshow.

I ordered something on Friday night, got offered free "same day shipping" with "guaranteed delivery on Saturday" because I'm a Prime member and it was over $35, Saturday at 5pm I get an email saying there was a problem with the order and now I'm guaranteed delivery on Sunday, and now I get an email that OnTrac claims my "business" was closed at 11am today. The leasing office here is open from 9am-7pm every day. OnTrac has a 25% success rate for delivering on the correct day for me so far.

Even if the package does arrive tomorrow, I can't get it until Friday now because I'll be at work when the leasing office is open. I should have picked the free two day delivery so I would have gotten a far more reliable carrier like Fedex/UPS to deliver it today. I'm tempted to cancel my Prime membership after having had it since 2009 or so.

It's awesome that it's reliable for your mother up in the mountains, though.

eco• 11 years ago

I've heard if you pester Amazon support enough they'll stop using a problematic carrier for your orders.

Veratyr• 11 years ago

Typically, if they don't meet a guaranteed delivery date, they'll give you a month extension of Prime to make up for it. If you make a few same-day orders during the busy holiday period, you can usually get enough misses to buy you another 6 months or so at least.

As for OnTrac, they usually call me if they can't find me. Have you tried calling their support? Usually they're pretty helpful. The very few times they haven't delivered, the day they were meant to, I've called their helpline and they delivered a second time at ~9PM that same day (while I'm home).

musesum5• 11 years ago

Am planning to do the opposite; I just cancelled my prime membership. I was an early customer as a friend was the first employee.

Recently I bought an item for double the retail price. The seller lied about the price. I wasn't able to leave a review.

So, am opting for more friction to compensate for less trust.

DannyBee• 11 years ago

"Recently I bought an item for double the retail price. The seller lied about the price. I wasn't able to leave a review. "

Return it? I've bought items >$3000 from third party sellers on amazon, had price or other issues, and returned them, with no problem. The one time there was an issue, amazon stepped in and took care of it.

"So, am opting for more friction to compensate for less trust. "

What do you hope to find elsewhere? In particular, it sounds like you bought from a third party seller on amazon, yet you seem to expect a different experience from those same type of third party sellers elsewhere?

...

musesum5• 11 years ago

I didn't buy the item. It was an Apple Watch charger that Apple lists for $29 and the vendor has a "list price" $59. In the past, I have read reviews which mention that an item is being sold for a lot more than SRP. So, I thought to do the same. But, I guess that is no longer allowed. So, I can't trust Amazon reviews anymore. This was a week after spending double for something else. So, time to experiment with another vendor.

EDIT (More to your point.)

> it sounds like you bought from a third party seller on amazon, yet you seem to expect a different experience from those same type of third party sellers elsewhere?

Buying directly from Apple was cheaper than Amazon. Until last week, I would have gone to Amazon first, read the reviews second, and then order. Kinda sad; breaking a decade old habit.

totalrobe• 11 years ago

Isn't that kind of your own fault for not price-checking? Stores often claim they have the best pricing.

musesum5• 11 years ago

I did price check; didn't order. Seller claimed that an item sold by Apple directly for $29 had a list price of $59. It was touted to be a genuine Apple charger.

mikeash6• 11 years ago

How can a seller lie about a price? Isn't the price listed on the web page and charged by Amazon?

musesum5• 11 years ago

Here is the review an Apple Watch charger with a retail price of $59.95

>"List Price" is double Apple's price. You can order this directly from Apple for $29.00

knowaveragejoe• 11 years ago

As others have pointed out, this sounds self-inflicted at best.

musesum5• 11 years ago

That would an interpretation. I didn't order the item in question. However, a week before, I did order a different item for double the price. Different vendor. Different department; one was food, the other electronics. Then I started to look at other reviews for overpriced products. Ok, so I'll leave a negative review. No longer allowed? Seems like a bad combination: no negative reviews on price gouging + really easy purchasing. Caveat Emptor Amazon.

seansmccullough• 11 years ago

I think the main reason Prime is successful is because it's so convenient. I live in Seattle, and running errands is really time consuming, so it's a lot easier to buy items on Amazon if I don't need them today.

ac292• 11 years ago

The thing I never understood about Prime is that unless you are extremely impatient, prime buys you nothing [1]. I'm not impatient (2 business days vs 5 is rarely a problem), but even if I had paid for 2 day shipping on every Amazon order I made last year, it would have cost less than the cost of a Prime Subscription.

The real insidious thing is what the OP pointed out -- in an attempt to justify their $100 subscription, people end up spending more than they otherwise would.

[1] I'm not counting the Prime Video service/etc, which may have value to people.

dabeeeenster• 11 years ago

In the UK they recently upped the minimum spend to qualify for free delivery which is what tripped me to get Prime...

apendleton2• 11 years ago

I think this misunderstands the value proposition somewhat. Prime changes the convenience calculus of Amazon vs. buying locally. Before I had Prime, I also rarely paid for expedited shipping, but if I had needed something quickly, I'd instead have been more likely to go to the local Best Buy (or Target or whatever) instead. I don't buy from Amazon to justify the subscription, but the fact that I have the subscription now makes Amazon sufficiently convenient that it's the best choice as compared to other options.

natch9• 11 years ago

It changes the calculus in Amazon's favor, with the benefit accruing to Amazon, and yet, Amazon tricks the customer into paying for this benefit. It's pretty brilliant, but I'm not gullible enough to pay for it when it buys me literally nothing. Faster shipping, when needed, I can already buy, without Prime, and for much less.

cj• 11 years ago

If you're ordering a new pair of fancy headphones, you can probably wait an extra few days without Prime.

But if you're about to run out of toilet paper, soap, deodorant, dish detergent, printer paper, etc... sometimes you just can't wait 5 days :)

mikeash6• 11 years ago

Sounds like a failure of planning. Those thing don't disappear suddenly. (I know, a lot of people suck at this, and it's good for them to have options.)

natch9• 11 years ago

I never understood this argument.

Stores are still a thing, right?

And if you are incapable of planning, how is Prime going to help you? When you need one of those things, even with Prime you're still going to the store, because you're not going to wait a day or two for TP or printer paper.

wlkr• 11 years ago

I find it useful being certain that an ordered item is coming on a certain day so that I don't have to worry about missing delivery and dealing with later collecting it. The additional services (Video/Music/Kindle Lending Library) are nice features if you make the most of them, which I do as I use no other media streaming services. I should probably say that I don't pay full price for Amazon Prime but pay the student rate (50%) which I find to be reasonable.

petke• 11 years ago

I don't get it either. National shipping isn't that expensive to justify paying 100 usd a year, and prime doesn't cover international shipping. So what do you actually get? Fast shipping. Doesn't seem worth it.

I live in a European country without its own Amazon portal, so all my shipping is international. Even if they had free international shipping the next day, prime doesn't seem like a good deal to me. As I only buy a handful of items a year from them. Mostly books.

ketralnis• 11 years ago

If Amazon doesn't even market to your country, surely you can't think that you are the target market for it

chippy• 11 years ago

Spending $3000 and saving $300 on delivery is not saving money.

It's spending $3000.

You are $3000 less well off.

This is such a basic concept many will violently oppose the idea with rationale such as "well I was going to spend it anyhow" or "Well, those headphones were on the list" or "These CDs were necessary spends and I would have bought them regardless of the saving".

mikeash6• 11 years ago

You have a good point but I think you're reaching too far with it. They're not $3,000 less well off, because the value of the purchases is more than the value of the money. (From the buyer's point of view, which is all that matters here.)

jtmarmon• 11 years ago

Only true if those purchases would've only been made on amazon prime. The author said he replaced target with amazon prime, so it would make sense his spending on AP shoots up. In reality it's hard to say for sure.

columbo• 11 years ago

When I signed for prime 3-4 years ago there was also a lot online retailers jerking around on shipping prices. "Oh that CD is $0.01 but it is $11.99 shipping, so if you don't like it then you'll be refunded the purchase price." Shipping prices in general seemed to be where quite a bit of profit was being made.

I don't know if that is still the case but it was a major reason for me to move to prime back then.

natch9• 11 years ago

It's funny math if he thinks Amazon is buying him for $100, when he's the one supplying the $100.

And before anyone comes back about how he's getting a savings compared to what he would be paying, he's confused somewhere, because the number he cited was $300, not $100, and that's only because he doesn't opt for the sometimes slower (but usually way faster than promised) free shipping, which is available to all, Prime or not.

I buy a huge amount of stuff on Amazon. No prime needed, no extra Prime fees spent.

What if I need something fast? I'll pay $20 for one-time 1-day shipping, not $100 for a year of 2-day shipping that I don't need. $20 versus $100, in all my years of using Amazon, have never spent the $20 once, so I've saved a few hundred dollars so far.

Lesson here maybe is that pretty charts can obscure the underlying reality, when basic assumptions about who is paying who get flipped.

djhworld• 11 years ago

It's funny math if he thinks Amazon is buying him for $100, when he's the one supplying the $100.

I think he means they've bought his loyalty. Or the 'prime' factor clouds purchasing decisions in favour of Amazon as the convenience and breadth of products is enough to make them the default choice.

I've been a Prime member for a few years now and I certainly do notice myself thinking Amazon first, anything else second.

mark_l_watson• 11 years ago

I feel a little guilty every time I buy on Amazon.

I feel good about supporting local businesses in the small town I live in: single Mom who cuts my hair, the couple who run the neighborhood gym, local farmers markets, etc. It is incredibly important to support one's own community and even though people do have jobs supporting Amazon purchases, it does not feel the same to me.

dano• 11 years ago

Question: As Amazon continues to refine and optimize its logistics will the delta in delivery time between prime and non-prime remain valued as it is today?

My thought is that the hyper competitive retail marketplace will demand continued optimization in pick-pack-ship and delivery. Amazon will need to add other value to the $100 Prime subscription for it to remain differentiated.

Amazon Bought Me for $100 a Year

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