Amazon is nothing but hype, smoke and mirrors. Its business model is doomed to fail in an era of increasing transportation and labor costs. Eventfully the accounting tricks will end and people will realize it is much more expensive in the aggregate to package and ship individual products to a consumer's door in one or two days than it is to have the consumer pick up multiple products at the store in a traditional shopping trip to the mall.
Alex Le
· 3 years ago
John McSpadden,
I have to disagree with you when you say Amazon is just hype. I think Amazon will do just fine in the long run. It's true when you say that increasing transportation and labor costs will affect Amazon's bottom line, but I think it's Walmart that have to face that risk first. Do you also say that Walmart will be doomed in the long run too? I think both companies will do fine. If there is still a demand for online shopping, there is still Amazon and other online stores.
Also, Amazon relies greatly on its technology to help run the company, especially with the invetory management. I am still amazed on how Amazon and Newegg do their shipping trick, and both are doing well on sales.
I think you are suspecting the Amazon's Prime programm doesn't work. Lets say it's $80/ year, it costs Amazon roughly $5 to have an item shipped. That's 16 orders per year. That's one order per month for an avarage person and that's reasonable for Amazon to fulfil without affecting their profit too too much. They've been having the free shipping for orders over $25 for a long time, so Prime may just lower their profit margin a bit. In my opinion, Prime is like an insurance plan or an all-you-can-eat buffet place. Amazon is still making money of each and every order that goes through.
All Comments
I have to disagree with you when you say Amazon is just hype. I think Amazon will do just fine in the long run. It's true when you say that increasing transportation and labor costs will affect Amazon's bottom line, but I think it's Walmart that have to face that risk first. Do you also say that Walmart will be doomed in the long run too? I think both companies will do fine. If there is still a demand for online shopping, there is still Amazon and other online stores.
Also, Amazon relies greatly on its technology to help run the company, especially with the invetory management. I am still amazed on how Amazon and Newegg do their shipping trick, and both are doing well on sales.
I think you are suspecting the Amazon's Prime programm doesn't work. Lets say it's $80/ year, it costs Amazon roughly $5 to have an item shipped. That's 16 orders per year. That's one order per month for an avarage person and that's reasonable for Amazon to fulfil without affecting their profit too too much. They've been having the free shipping for orders over $25 for a long time, so Prime may just lower their profit margin a bit. In my opinion, Prime is like an insurance plan or an all-you-can-eat buffet place. Amazon is still making money of each and every order that goes through.