Author Topic: Amazon taking over  (Read 8877 times)

bender

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Amazon taking over
« on: March 15, 2018, 09:53:09 AM »
Good fact filled article about Amazon's rise to dominance.

https://www.bloomberg.com/graphics/2018-amazon-industry-displacement/

Facts I found interesting:
Amazon accounts for 44% of all online revenues
Amazon revenues are still small compared to Walmart
Physical retail still accounts for 90%, so there is a lot of room for online business to grow.

My two cents:
There are pluses and minuses when a company gets this big.  So far I think the pluses outweigh due to the transformative effects Amazon has had in several areas, especially retail and cloud computing.  I'm a bit excited at the possibilities Amazon and Berkshire can create in healthcare.  Good for them if they can make some profit by disrupting and bringing massive improvements.
« Last Edit: March 30, 2018, 08:44:20 AM by bender »

Kyle B

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Re: Amazon taking over
« Reply #1 on: March 15, 2018, 09:59:46 AM »
It's also up 30% since the first of the year.

Scandium

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Re: Amazon taking over
« Reply #2 on: March 15, 2018, 10:36:37 AM »
Every time I see this number i don't understand how online sales are only ~10% of total. I hardly ever buy anything in a store anymore! Except groceries I guess, but I do order those online and pick up in store. Now even clothes and shoes can be easily ordered online, and avoid wandering aimlessly around some dingy store. winwin. WHo are these weirdos that go to stores, and why? I don't get it.

Kyle B

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Re: Amazon taking over
« Reply #3 on: March 15, 2018, 11:00:57 AM »
Every time I see this number i don't understand how online sales are only ~10% of total. I hardly ever buy anything in a store anymore! Except groceries I guess, but I do order those online and pick up in store. Now even clothes and shoes can be easily ordered online, and avoid wandering aimlessly around some dingy store. winwin. WHo are these weirdos that go to stores, and why? I don't get it.
I tend to agree.

Stock performance last two years, vs Vanguard Total Stock Market Index Fund:


ketchup

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Re: Amazon taking over
« Reply #4 on: March 15, 2018, 12:29:52 PM »
Every time I see this number i don't understand how online sales are only ~10% of total. I hardly ever buy anything in a store anymore! Except groceries I guess, but I do order those online and pick up in store. Now even clothes and shoes can be easily ordered online, and avoid wandering aimlessly around some dingy store. winwin. WHo are these weirdos that go to stores, and why? I don't get it.
This is a head-scratcher for me too.  I'll physically go to grocery stores, Costco, gas stations, and Home Depot sometimes, but that's really about it.  And I only see that decreasing going forward.  I get everything else online, and yes, usually from Amazon.

redbird

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Re: Amazon taking over
« Reply #5 on: March 15, 2018, 01:10:38 PM »
I swear that 10% figure is old, that I've seen it before years ago. It feels too low to me as well. But online sales feel really difficult to track. A decent number of sales happen through small businesses and individuals that may or may not report sales numbers the way Amazon, Walmart, etc would.

I, for one, welcome my Amazon and other online shopping overlords.

Travis

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Re: Amazon taking over
« Reply #6 on: March 15, 2018, 02:42:50 PM »
Every time I see this number i don't understand how online sales are only ~10% of total. I hardly ever buy anything in a store anymore! Except groceries I guess, but I do order those online and pick up in store. Now even clothes and shoes can be easily ordered online, and avoid wandering aimlessly around some dingy store. winwin. WHo are these weirdos that go to stores, and why? I don't get it.
This is a head-scratcher for me too.  I'll physically go to grocery stores, Costco, gas stations, and Home Depot sometimes, but that's really about it.  And I only see that decreasing going forward.  I get everything else online, and yes, usually from Amazon.

Counting volume or raw dollars, Walmart and grocery stores probably make up the bulk of this. We buy a lot of food as a society and nearly all of it is in a brick and mortar location.  The article did say that 44% of everything sold online comes from Amazon so they definitely have the online market cornered.  We just don't realize the scale of what we still buy in person.

myrrh

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Re: Amazon taking over
« Reply #7 on: March 15, 2018, 03:32:03 PM »
I like to see the produce and meat I'm buying before purchasing them. I also like trying on clothes and shoes before I buy them to make sure they fit. I hate dealing with returns.

Maybe I'm weird, but I'm pretty sure I'm not the only one like this.

Also, while I'm not one of them, there are those people who consider shopping a way to pass the time and will wander up and down the aisles looking at stuff (and occasionally buying it.) Amazon hasn't quite mastered the "display random cool crap that I would have never thought necessary but now just have to have" thing yet.

robartsd

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Re: Amazon taking over
« Reply #8 on: March 15, 2018, 03:53:43 PM »
I purchase food almost entirely in person. Food is probably more than 90% the physical items I purchase. I also purchase clothing mostly in person (very few retail purchases though, most of my wardrobe is thrift store). If it isn't something I purchase regularly and it's not something I want to try on before purchasing, I prefer shopping online.

DreamFIRE

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Re: Amazon taking over
« Reply #9 on: March 15, 2018, 04:16:16 PM »
I have less incentive to buy from Amazon once they started charging tax for people in my state.  I still do some, but I'm more likely to look elsewhere.

There's the odd freak that you see in public just about anywhere, but it's good to get out of your shell once in a while.

Kyle B

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Re: Amazon taking over
« Reply #10 on: March 15, 2018, 04:29:18 PM »
I also like trying on clothes and shoes before I buy them to make sure they fit. I hate dealing with returns.

I felt this way too, but I'm starting to come around. The key is to take full advantage of Amazon's returns by buying EVERY possible version of a desired item and then returning ALL BUT ONE.

ie, I recently needed some shower shoes, but had no idea what version (or even exact size, as they vary) would be right for me. So I bought at least two sizes of four different types.

One size and design combo was perfect, so I returned the others (in perfect, original condition).  The money was back in my account before the returns even arrived back at Amazon.

Make no mistake -- Amazon is in it to win it.

Stachless

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Re: Amazon taking over
« Reply #11 on: March 15, 2018, 09:07:33 PM »
Macy's has generated TWICE the profits of AMZN over the last 20 years.

I'm not sure I've ever been in a Macy's?  I think they do a Thanksgiving Day parade.

Kyle B

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Re: Amazon taking over
« Reply #12 on: March 15, 2018, 09:12:01 PM »
Macy's has generated TWICE the profits of AMZN over the last 20 years.

That's part of why Amazon is growing like crazy and Macy's is closing stores and heading for bankruptcy.

https://www.ben-evans.com/benedictevans/2014/9/4/why-amazon-has-no-profits-and-why-it-works


Stachless

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Re: Amazon taking over
« Reply #13 on: March 15, 2018, 09:24:16 PM »
2014 was a really long time ago for Amazon....

Macy's is still a publicly-traded profitable enterprise that has raised its dividend 7 years in a row.  Some folks still like to try on (most) clothes prior to buying them.

I'm a huge fan of AMZN, and use it enough to keep a Face-Punching Machine in continuous operation...but they won't be the only retailer left on the planet any time soon.

Hash Brown

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Re: Amazon taking over
« Reply #14 on: March 15, 2018, 09:24:51 PM »
I probably first bought something on Amazon in 2000 or thereabouts.  I've spent a grand total of maybe $300 since.  The only thing I bought in 2017 was a $6 kit to repair a belt. 

What is all this crap people are buying?  I stayed at an airbnb that had an Alexa this past summer, that is my only experience with it.  Another dumb thing trying to sell you crap you don't need. 

I worked at an Amazon warehouse back when it was just books, in 2001.  They were raided by immigration shortly after I left and 25-odd Mexicans were taken away.  The managers all sucked. 

SC93

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Re: Amazon taking over
« Reply #15 on: March 15, 2018, 09:50:11 PM »
If it comes to the point of where I can't try my clothes on before I buy them, I will no longer buy clothes. I know Mark Cuban is set on making buying clothes and shoes online a simple thing but it's just not for me. No joke, I have to try on 10-40 pairs of shoes before I find the 'right' fit for me.

I rarely buy things on Amazon but I did put some things in the cart last night for the lil woman to buy tomorrow.

ketchup

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Re: Amazon taking over
« Reply #16 on: March 16, 2018, 08:07:01 AM »
I order almost nothing online, but I also buy almost everything used, so there’s that.

I’ve never ordered clothes online and been happy, and I hate returning things.
I buy plenty of used stuff too (online or in meatspace) but just for laughs I looked at the last few things I bought on Amazon: a hard drive, dark chocolate, motor oil and oil filter, and dog shit bags.  Are any these things you'd consider buying used?

I hate returning things too, but only in stores.  Driving to the store, digging out the receipt, waiting in line at the service desk, etc.  Returns on Amazon are a breeze.  Click return, print shipping label, stick in box and go.  It takes me longer to make breakfast.

Around 1 in 5 U.S. households now has a smart home device (think Amazon Echo, Google Home, etc).  I didn't realize they were that ubiquitous until about 3 months ago.  Originally, I got it so that my kids could get better answers to their questions than the $hitty ones I was providing.  And I also like saying, Hey, Alexa, what's the population growth rate in India?  Get rid of the friction, and I guess I'm at least a little intellectually curious.

Aside from the Q&A, I do have to say that Echo + Spotify is pretty rad.  I'll probably lose my mustache for saying that, but whatev. (Person walking onto the stage of Jerry Springer show: You don't know me... you don't know me...)
Wow, that's news to me.  I had a coworker the other day that was called by someone at Google (someone with a legit @google.com email address) trying to push a free Google Home on him.  It was weird.
« Last Edit: March 16, 2018, 08:11:12 AM by ketchup »

Just Joe

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Re: Amazon taking over
« Reply #17 on: March 16, 2018, 12:43:27 PM »
I live in a town where the largest retailer is Wal-Mart. There are smaller retailers here but its hit or miss whether they'll have something oddball that I want or whether they'll charge and arm and a leg for it. Consequently Amazon has been a big deal for us - and the rest of the internet too.

Got a weird geeky hobby? The internet might be the easiest way to buy a Frenchpress coffee maker or RAM or a SSD or a ebike kit or camera accessories or an affordable 3D printer?

Got a car? I can often buy repair and maintenance parts significantly cheaper online especially if I want OEM brake pads which have much more material on them than aftermarket pads. The price differential is such that sometimes I do OEM online for the price of aftermarket around town.

I think alot about Amazon becoming the same kind of quasi-monopoly that WalMart has become in our town. Got to do business with the locals if I want local businesses to visit. 

Scandium

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Re: Amazon taking over
« Reply #18 on: March 16, 2018, 01:08:54 PM »
I like to see the produce and meat I'm buying before purchasing them. I also like trying on clothes and shoes before I buy them to make sure they fit. I hate dealing with returns.

Maybe I'm weird, but I'm pretty sure I'm not the only one like this.

Also, while I'm not one of them, there are those people who consider shopping a way to pass the time and will wander up and down the aisles looking at stuff (and occasionally buying it.) Amazon hasn't quite mastered the "display random cool crap that I would have never thought necessary but now just have to have" thing yet.

You’re not the only one.
I order almost nothing online, but I also buy almost everything used, so there’s that.

I’ve never ordered clothes online and been happy, and I hate returning things.

What's so bad about returning things? Print label, drop off box at UPS on my way from work.. Hardly a chore. Compared to driving (sorry; biking) to store, walking the aisles, finding and trying item. waiting in line, pay, get home. And I always want to get out of there so feel stressed and try on more at home too. And that's assuming you find what you want in one store. The time sink is pretty significant. You prefer that to taping a box?

Or just quickly browse a much bigger selection online at a glance, order a few different sizes. Toss it on in the comfort of your home, and return any that don't fit. I know what I prefer by a wide margin. But whatever floats your boat.
« Last Edit: March 16, 2018, 01:59:45 PM by Scandium »

MMMarbleheader

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Re: Amazon taking over
« Reply #19 on: March 16, 2018, 01:45:50 PM »
I found myself moving more towards Amazon every year.

This year I downgraded my Blue Cash card from preferred to every day. Why? Amazon opened up Whole foods to get 5% back on their VISA CC and Costco switched from Amex to VISA. I still use the blue cash for gas and other grocery stores but I will use the Amazon VISA a lot more now.

undercover

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Re: Amazon taking over
« Reply #20 on: March 17, 2018, 12:18:06 PM »
Although I do most of my ordering online and definitely for one-off purchases, I still go in stores because I don't want to be a complete shut in and it makes me feel at least somewhat human. But I'm definitely more picky now about where I'll go in.

BlueMR2

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Re: Amazon taking over
« Reply #21 on: March 17, 2018, 03:05:37 PM »
WHo are these weirdos that go to stores, and why? I don't get it.

Me.  :-)  I like:

- Not having to return things that don't fit right, test fitting is a key advantage of real shops
- Not having to return things that end up not living up to descriptions, if you can't get ahold of the object and inspect it, it's hard to be sure it's correct
- Getting things right now when I need them and not having to wait for it to ship
- Not having to worry about porch pirates if a delivery arrives while nobody is home
- Not having to add as many use tax numbers up for my tax return (Few online stores collect taxes in my state, which is very annoying as I have to then do that myself)
- Being able to pay cash and not have to use my credit card
- Supporting locals that I know and trust instead of the entire profit going to one of those online sweatshops

I use online when I must, but greatly prefer in person.  Those are just the few things off the top of my head, I could go on much longer about why in person shopping is better!

nemesis

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Re: Amazon taking over
« Reply #22 on: March 17, 2018, 04:26:25 PM »
I only buy non-perishables on Amazon, but even with Amazon Prime, there are many things that just make more sense to buy locally.

Groceries, some clothing (I have an athletic body and it's really hard to see how clothes will fit online), random stuff I need last minute, etc.  I hate shopping, but I find myself not using Amazon for much of my purchases.

I also buy a lot of stuff from Home Depot / Lowe's, due to their generous return policies.  Often I'll buy tools / supplies that I'm not sure I'll try or use within 30 days.  With HD / Lowe's I have 90 day return policy.  Amazon's 30 day return policy just sucks in comparison.  And there are some items on Amazon that have NO return policy. That doesn't fly with me.

Pedro Mustache

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Re: Amazon taking over
« Reply #23 on: March 19, 2018, 08:41:55 AM »
I live in a very rural area, in a very quiet, not so well off corner of Europe. At the risk of gasping, over exaggeration, Amazon is a lifeline for me.

We buy all our family clothes and pretty much every non grocery store item from Amazon. This saves us driving a very long way to the nearest city, where they may or may not have the item we need. Things like specialist wood working tools etc just don't seem to exist where we live. Trying to find replacement parts for certain appliances and tools would be a nightmare. 

I can also but amazon vounchers from our grocery store and they give us an 8% voucher for groceries.

The major risk is overbuying on amazon as they make it so easy with targeted suggestions but otherwise using amazon for us seems like a win all around.

Michael in ABQ

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Re: Amazon taking over
« Reply #24 on: March 19, 2018, 10:03:59 AM »
Amazon just had some add for their credit card and indicated if we'd used it last year with 5% we would have earned over $100. Obviously that means we spent over $2,000 on Amazon. That seems like a huge amount to me but it still pales in comparison to our grocery spending which was over $10k for the year before (family of 7). Most of what we buy on Amazon are books for homeschooling. A lot of these aren't available at the library or we want to own a copy because it will be used by multiple kids or over the course of a whole year - not exactly practical with a library book.

Keep in mind car sales make up a big chunk of "retail sales". I have access to detailed demographic and market data for my work and one report we'll use shows a breakdown of retail sales by category in a certain mile radius. Looking at a typical example auto sales constituted about 21% of retail sales and Convenience stores/gas stations were about 10%. There's two things that are probably not going online anytime soon. Accommodation and food services were 12% (i.e. restaurants and hotels) - another category that can't be replaced online. Grocery stores were 17% of sales and Amazon is obviously getting a chunk of that - though I doubt they'll ever be able to compete on something like a gallon of milk, a dozen eggs, or a box of laundry detergent. Building materials, a lot of lawn and garden supplies, etc. There's a lot of products that the margins are simply too low or are too heavy/bulky to be shipped in a cost effective way. I don't think anyone will be buying a 30 lb. bag of potting soil or a sheet of plywood online anytime soon. Obviously some items like books are perfectly suited to online sales and we've seen brick and mortar book stores decline precipitously. Amazon and other retailers still have plenty of room to grow. There's a lot of niche website that can survive when they can sell nationally that would never make sense in a typical retail location.

yodella

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Re: Amazon taking over
« Reply #25 on: March 19, 2018, 10:49:46 AM »
Lately I've noticed some of Amazon's book prices are WAY higher than they used to be. I mostly use the library and buy very few books (maybe 4-5 per year), but there are certain authors I love and will read over and over and I like to own their books. It just so happens that four of them have books coming out in the next couple of months, and only one of them is currently at what I used to consider a "normal price" for a new hardcover on Amazon:

1. Alternate Side by Anna Quindlen - retail $28, current Amazon price $25.20
2. You Think It, I'll Say It by Curtis Sittenfeld - retail $27, current Amazon price $24.30
3. The Female Persuasion by Meg Wolitzer - retail $28, current Amazon price $16.80
4. Calypso by David Sedaris - retail $28, current Amazon price $25.20

None of these books are specialties like textbooks, or written in a foreign language, etc. They are all by well established writers. Is this the new normal on Amazon? Now that they've killed most competition, is 10% off going to be the new standard discount?

Kyle B

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Re: Amazon taking over
« Reply #26 on: March 19, 2018, 11:04:16 AM »
Lately I've noticed some of Amazon's book prices are WAY higher than they used to be.
 ...
Is this the new normal on Amazon? Now that they've killed most competition, is 10% off going to be the new standard discount?
I expect this will be their behavior going forward as they dominate more and more sectors.  It seems to me that they are comfortable with postponing profits now in anticipation of windfall profits down the line.

Cwadda

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Re: Amazon taking over
« Reply #27 on: March 19, 2018, 12:04:33 PM »
Good fact filled article about Amazon's rise to dominance.

https://www.bloomberg.com/graphics/2018-amazon-industry-displacement/

Facts I found interesting:
Amazon accounts for 44% of all online revenues
Amazon revenues are still small compared to Walmart
Physical retail still accounts for 90%, so there is a lot of room for online business to grow.

My two cents:
There are pluses and minuses when a company gets this big.  So far I think the pluses outweigh due to the transformative effects Amazon has had in several areas, especially retail and cloud computing.  I'm a bit excited at the possibilities Amazon and Berkshire can create in healthcare.  Good for them if they can make some profit by disrupting and bringing massive improvements.

Another plus is that Amazon has an extremely large affiliate network of 3rd party sellers. I'm one of them. There are thousands of "small businesses" all branched from Amazon, selling things through Amazon. I was able to quit my job and become self-employed. Thank you Amazon for allowing me to earn a living and gain more freedom in my work.

Cwadda

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Re: Amazon taking over
« Reply #28 on: March 19, 2018, 12:06:17 PM »
Lately I've noticed some of Amazon's book prices are WAY higher than they used to be. I mostly use the library and buy very few books (maybe 4-5 per year), but there are certain authors I love and will read over and over and I like to own their books. It just so happens that four of them have books coming out in the next couple of months, and only one of them is currently at what I used to consider a "normal price" for a new hardcover on Amazon:

1. Alternate Side by Anna Quindlen - retail $28, current Amazon price $25.20
2. You Think It, I'll Say It by Curtis Sittenfeld - retail $27, current Amazon price $24.30
3. The Female Persuasion by Meg Wolitzer - retail $28, current Amazon price $16.80
4. Calypso by David Sedaris - retail $28, current Amazon price $25.20

None of these books are specialties like textbooks, or written in a foreign language, etc. They are all by well established writers. Is this the new normal on Amazon? Now that they've killed most competition, is 10% off going to be the new standard discount?

When I flip books I find $30 MSRP books going for $12 and $60 MSRP books going for $17. It's very common.

Kyle B

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Re: Amazon taking over
« Reply #29 on: March 19, 2018, 12:17:57 PM »

Another plus is that Amazon has an extremely large affiliate network of 3rd party sellers. I'm one of them. There are thousands of "small businesses" all branched from Amazon, selling things through Amazon. I was able to quit my job and become self-employed. Thank you Amazon for allowing me to earn a living and gain more freedom in my work.
Hey, I just saw your guide...it's excellent!

It sounds like a fun, relatively stress-free way of adding additional support to a FIRE lifestyle.

big_slacker

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Re: Amazon taking over
« Reply #30 on: March 19, 2018, 01:50:39 PM »
I probably first bought something on Amazon in 2000 or thereabouts.  I've spent a grand total of maybe $300 since.  The only thing I bought in 2017 was a $6 kit to repair a belt. 

What is all this crap people are buying?  I stayed at an airbnb that had an Alexa this past summer, that is my only experience with it.  Another dumb thing trying to sell you crap you don't need. 

I worked at an Amazon warehouse back when it was just books, in 2001.  They were raided by immigration shortly after I left and 25-odd Mexicans were taken away.  The managers all sucked.

Why do you think it's all crap? You can set all your dry goods and household items to subscribe and save, it's often cheaper than the grocery store and if you've ended up with extra you can skip a month. Super convenient.

GrumpyPenguin

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Re: Amazon taking over
« Reply #31 on: March 19, 2018, 02:07:47 PM »
Every year that goes by, I've actually been buying less and less at Amazon.  It used to be a clear price-winner on most products I'd look for, but this has become less frequent as time goes on.  When I look for common household items, cleaning supplies, etc... that I might pick up at a Target or Costco, they'll end up been weirdly expensive on Amazon.  My online shopping is also tiny compared to what I spend at Costco in a year. 

mm1970

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Re: Amazon taking over
« Reply #32 on: March 19, 2018, 02:25:39 PM »
I probably first bought something on Amazon in 2000 or thereabouts.  I've spent a grand total of maybe $300 since.  The only thing I bought in 2017 was a $6 kit to repair a belt. 

What is all this crap people are buying?  I stayed at an airbnb that had an Alexa this past summer, that is my only experience with it.  Another dumb thing trying to sell you crap you don't need. 

I worked at an Amazon warehouse back when it was just books, in 2001.  They were raided by immigration shortly after I left and 25-odd Mexicans were taken away.  The managers all sucked.

Why do you think it's all crap? You can set all your dry goods and household items to subscribe and save, it's often cheaper than the grocery store and if you've ended up with extra you can skip a month. Super convenient.

Diapers/ pullups
Reusable produce bags
Baseball pants
Kid pajamas
Books
Games
Legos
My Instant Pot
A replacement carafe for my broken Mr Coffee carafe
Running shoes (last year's version for 1/2 the cost)
A laptop backpack
Ice packs

acroy

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Re: Amazon taking over
« Reply #33 on: March 19, 2018, 02:38:56 PM »
Big fan of Amazon, great to have the choice. Obviously it is not the answer for everything.

Give Bezos time, he will get into health care, prescription drugs, etc in addition to the current biz of cloud storage for the War Dept and NSA ;)

Kyle B

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Re: Amazon taking over
« Reply #34 on: March 19, 2018, 03:08:37 PM »
Give Bezos time, he will get into health care, prescription drugs, etc in addition to the current biz of cloud storage for the War Dept and NSA ;)

I can't wait for him to get into prescription drugs. It annoys me that there's so much windfall profit in that business that they put a Walgreens & a CVS on every single corner.

We just don't need that many pharmacies.

Lis

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Re: Amazon taking over
« Reply #35 on: March 19, 2018, 04:04:12 PM »
This year I downgraded my Blue Cash card from preferred to every day. Why? Amazon opened up Whole foods to get 5% back on their VISA CC and Costco switched from Amex to VISA.

...does Whole Foods not count as a regular supermarket? Cuz the Preferred Blue gets your 6% on groceries. (All depending on what AMEX defines as a supermarket - last I checked, WalMart Super Stores didn't count, even if it had a grocery section, but I can't imagine Whole Foods wouldn't be listed as a supermarket.)

Looking at my last orders on Amazon -

- Cat food - cheaper than going out to the stores and buying it myself (and waaaaay more convenient). Comparable to Chewy.
- Bulk paper towels and toilet paper through subscribe and save - comparable in price to BJs (no Costco near me), way more convenient
- New Fitbit band after my old one broke - other than Fitbit's website ($$$), or a Fitbit brand one in a store ($$$), I'm not sure where I would have bought this. Much cheaper, and it's prettier.
- New "portable" rowing machine (hey, I canceled my gym membership) - again, delivered to my door.
- Oh look, more cat food. My cats eat a lot.

I have a few more Subscribe and Save items that I buy every couple of months (there's a five lb bag of quinoa that I keep pushing back, same with cans of tuna for cheap). I'll do their Prime Pantry when they give decent coupons and free shipping.

Judicator

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Re: Amazon taking over
« Reply #36 on: March 19, 2018, 04:13:41 PM »
On the topic of Amazon - what do you think is the fair value? It seems like they have the skill / corporate culture to establish dominance in much more than just online retail. Any physical location (grocery, pharmacy, convenience store) they get into will be backed up by an extremely cost efficient logistics backbone. The biggest risk to me seems regulatory and I don't really know how to estimate that.

Every time I see this number i don't understand how online sales are only ~10% of total. I hardly ever buy anything in a store anymore! Except groceries I guess, but I do order those online and pick up in store. Now even clothes and shoes can be easily ordered online, and avoid wandering aimlessly around some dingy store. winwin. WHo are these weirdos that go to stores, and why? I don't get it.

Me! I'm probably 30% online right now and don't see it going a whole lot higher than maybe 50% over the next 5 years.

Last year I spent something like...
  • 30% Costco
  • 25% Walmart / Target / Local Grocery
  • 25% Amazon
  • 10% Digital Goods
  • 10% Local Retail

I still buy all of my clothing in store. I would never get something like a suit online because every brand fits differently. Maybe when AmazonBasics comes out with a suit template in 100 different styles I will switch.

I buy all of my groceries in store. Costco is on my commute home and Walmart is walking distance so no huge advantage to ordering ahead for me. For those reasons I tend to make lots of small orders so delivery would be costly. Amazon has weird pricing here - I looked up Nutmeg for example...you can get the $5 premium version from Whole Foods or other quality brands, but the $2 store brand version has $5 shipping.

Anything where I want to really inspect the quality I will buy in store because Amazon returns are still a hassle - luggage, large consumer electronics, etc. If I get a peripheral cable I will go to Amazon, but for a new tablet I like to try it out in store.

Michael in ABQ

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Re: Amazon taking over
« Reply #37 on: March 19, 2018, 04:40:37 PM »
Amazon, or any online seller will always be hard to make some little thing cost effective. There's a brand of salsa from a local restaurant that cost $3.78 a jar at any Walmart in town. At some other places I've seen it as high as $5.99. A single jar on Amazon will cost something like $15 and a 3-pack is about $32. I'm actually looking into selling this because I found a wholesaler nearby who will sell me a case at $3.49 a jar. However, even at that $32 price point the profit is only going to be maybe $3-4 dollars for a 3-pack. I'd have to repackage it in bubble wrap inside a smaller box so the glass jars don't get broken while it's shipped to Amazon's warehouse, then moved around inside, then shipped to a customer. Amazon takes a 15% cut of all third-party sales and if I send it in to them I can get cheap bulk shipping rates but they charge an additional fee for handling the fulfillment (pick and pack plus shipping to the customer). The thing is that I can send something into Amazon in bulk and have them ship it to individual customers and it's still cheaper than I could ship it myself because they have such discounted rates with all the carriers.