Amazon Pushing for Same-Day Delivery

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Amazon Pushing for Same-Day Delivery

Postby lutzj » Mon Jul 16, 2012 6:23 pm UTC

http://www.slate.com/articles/business/small_business/2012/07/amazon_same_day_delivery_how_the_e_commerce_giant_will_destroy_local_retail_.html
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Amazon has long enjoyed an unbeatable price advantage over its physical rivals. When I buy a $1,000 laptop from Wal-Mart, the company is required to collect local sales tax from me, so I pay almost $1,100 at checkout. In most states, Amazon is exempt from that rule. According to a 1992 Supreme Court ruling, only firms with a physical presence in a state are required to collect taxes from residents. Technically, when I buy a $1,000 laptop from Amazon, I’m supposed to pay a $100 “use tax” when I file my annual return with my home state of California. But nobody does that. For most people, then, most items at Amazon are significantly cheaper than the same, identically priced items at other stores.

In response to pressure from local businesses, many states have passed laws that aim to force Amazon to collect sales taxes (the laws do so by broadening what it means for a company to have a physical presence in the state). Amazon hasn’t taken kindly to these efforts. It has filed numerous legal challenges, and fired all of its marketing affiliates in Colorado, North Carolina, Rhode Island, and California. It also launched a $5 million political campaign to get voters to turn back the California law. And when Texas’ comptroller presented Amazon with a $269 million sales tax bill last year, the company shut down its distribution center in Dallas.

But suddenly, Amazon has stopped fighting the sales-tax war. Last fall it dropped its repeal campaign in California and instead signed a deal with lawmakers to begin collecting sales taxes later this year. That was followed by several more tax deals—over the course of the next couple years, Amazon will begin collecting sales tax from residents of Nevada, New Jersey, Indiana, Tennessee, Virginia, and on July 1, it began collecting taxes from Texans. It also currently collects taxes from residents of Kansas, Kentucky, New York, North Dakota, and its home state of Washington. After all the tax deals go into effect, the company will be collecting taxes from the majority of its American customers.
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Why would Amazon give up its precious tax advantage? This week, as part of an excellent investigative series on the firm, the Financial Times’ Barney Jopson reports that Amazon’s tax capitulation is part of a major shift in the company’s operations. Amazon’s grand strategy has been to set up distribution centers in faraway, low-cost states and then ship stuff to people in more populous, high-cost states. When I order stuff from Amazon, for instance, it gets shipped to California from one of the company’s massive warehouses in Kentucky or Nevada.

But now Amazon has a new game. Now that it has agreed to collect sales taxes, the company can legally set up warehouses right inside some of the largest metropolitan areas in the nation. Why would it want to do that? Because Amazon’s new goal is to get stuff to you immediately—as soon as a few hours after you hit Buy. (Disclosure: Slate participates in Amazon Associates, an "affiliate" advertising plan that rewards websites for sending customers to the online store. This means that if you click on an Amazon link from Slate—including a link in this story—and you end up buying something, Amazon will send Slate a percentage of your final purchase price.)

It’s hard to overstate how thoroughly this move will shake up the retail industry. Same-day delivery has long been the holy grail of Internet retailers, something that dozens of startups have tried and failed to accomplish. (Remember Kozmo.com?) But Amazon is investing billions to make next-day delivery standard, and same-day delivery an option for lots of customers. If it can pull that off, the company will permanently alter how we shop. To put it more bluntly: Physical retailers will be hosed.

Can Amazon pull it off? It’s sure spending a lot of money to try, and it has already come up with a few creative ways to speed up deliveries. In each of the deals it has signed with states, the company has promised to build at least one—and sometimes many—new local warehouses. Some of these facilities are very close to huge swaths of the population. Amazon is investing $130 million in new facilities in New Jersey that will bring it into the backyard of New York City; another $135 million to build two centers in Virginia that will allow it to service much of the mid-Atlantic; $200 million in Texas; and more than $150 million in Tennessee and $150 million in Indiana to serve the middle of the country. Its plans for California are the grandest of all. This year, Amazon will open two huge distribution centers near Los Angeles and the San Francisco Bay Area, and over the next three years it might open as many as 10 more in the state. In total, Amazon will spend $500 million and hire 10,000 people at its new California warehouses.

But Amazon isn’t simply opening up a lot of new shipping centers. It’s also investing in making those centers much more efficient. Earlier this year, it purchased Kiva Systems, a company that makes cute, amazingly productive “picking robots” that improve shipping times while reducing errors. Another effort will allow the company to get stuff to you even faster. In Seattle, New York, and the United Kingdom, the firm has set up automated “lockers” in drug stores and convenience stores. If you order something from Amazon and you work near one of these lockers, the company will offer to drop off your item there. On your way home from work, you can just stop by Rite Aid, punch in a security code, and get your stuff.

All these efforts seem to be paying off. I’m a frequent Amazon shopper, and over the last few months I’ve noticed a significant improvement in its shipping times. As a subscriber to Amazon’s Prime subscription service, I’m used to getting two-day shipping on most items for free. But on about a third of my purchases, my package arrives after just one day for no extra charge. Sometimes the service is so speedy it seems almost magical. One Friday afternoon last month, I ordered three smoke alarms, and I debated paying extra for shipping so that I could install them over the weekend. The $9 per item that Amazon charges for Saturday delivery seemed too steep, though, so I went with standard two-day service. The next morning, the delivery guy arrived with my smoke detectors. I’d gotten next-day Saturday service for free. I have no idea how Amazon made any money on my order (the whole bill was less than $30) but several people on Twitter told me that they’ve experienced similarly delightful service.

If Amazon can send me stuff overnight for free without a distribution center nearby, it’s not hard to guess what it can do once it has lots of warehouses within driving distance of my house. Instead of surprising me by getting something to me the next day, I suspect that, over the next few years, next-day service will become its default shipping method on most of its items. Meanwhile it will offer same-day service as a cheap upgrade. For $5 extra, you can have that laptop waiting for you when you get home from work. Wouldn’t you take that deal?

I bet you would. Physical retailers have long argued that once Amazon plays fairly on taxes, the company wouldn’t look like such a great deal to most consumers. If prices were equal, you’d always go with the “instant gratification” of shopping in the real world. The trouble with that argument is that shopping offline isn’t really “instant”—it takes time to get in the car, go to the store, find what you want, stand in line, and drive back home. Getting something shipped to your house offers gratification that’s even more instant: Order something in the morning and get it later in the day, without doing anything else. Why would you ever shop anywhere else?


Basically, Amazon has reversed its position on sales taxes, and will now start paying them so that it can start setting up shipping centers closer to people's homes. This will make next-day or same-day deliveries cheap or even free for many people. If they succeed, Amazon will probably do very well at the expense of traditional big-box stores like Wal-Mart.

I suspect this might recreate an opening for mom-and pop stores, whose advantages (service, quality) will be even more stark compared to online retailers.
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Re: Amazon Pushing for Same-Day Delivery

Postby Bsob » Mon Jul 16, 2012 6:32 pm UTC

The reason book stores and movie rental locations have all but died is the internet allows instant gratification when it comes to buying a book or movie online. (your book is on your kindle in less than 10 minutes, your movie starts streaming is less than 10 seconds.)

One-day delivery is not instant. I do not suspect this will change much.

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Re: Amazon Pushing for Same-Day Delivery

Postby sardia » Mon Jul 16, 2012 6:33 pm UTC

Oh no, I really liked avoiding sales tax, it's a shame that they gave in on that. =\

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Re: Amazon Pushing for Same-Day Delivery

Postby pseudoidiot » Mon Jul 16, 2012 6:37 pm UTC

Bsob wrote:The reason book stores and movie rental locations have all but died is the internet allows instant gratification when it comes to buying a book or movie online. (your book is on your kindle in less than 10 minutes, your movie starts streaming is less than 10 seconds.)

One-day delivery is not instant. I do not suspect this will change much.
You do realize that Amazon sells more than books or movies, right?

There's definitely been times when I needed to get something, but because I didn't want to wait a day or two (or pay extra for the shipping), that I ended up going out somewhere to buy it. If they had a distribution center near me and I could get some same-day deliveries? I'd be all over that. Especially if there's any sort of discount as an Amazon Prime member.
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Re: Amazon Pushing for Same-Day Delivery

Postby lutzj » Mon Jul 16, 2012 6:39 pm UTC

Bsob wrote:The reason book stores and movie rental locations have all but died is the internet allows instant gratification when it comes to buying a book or movie online. (your book is on your kindle in less than 10 minutes, your movie starts streaming is less than 10 seconds.)

One-day delivery is not instant. I do not suspect this will change much.


There will still probably be a time disparity between online and physical retail for most people, but it gets much smaller and much less important when you don't have to wait half a week for something. There is a significant time investment involved in traditional retail, never mind the trouble of actually going to the store, searching around for something, and hauling it back home.
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Re: Amazon Pushing for Same-Day Delivery

Postby Ceron » Mon Jul 16, 2012 7:30 pm UTC

Same day delivery can be as good as traditional shopping. Suppose you get into work, and being the exemplar employee you are, you browse the games department on Amazon. You purchase COD:Blops 9, and by the time you're home from work, you've got it already. If you went to a brick and mortar, you might have to drive out of your way on your trip home, and you'd certainly spend ten minutes parking, getting your game, paying, and leaving.

I personally would rather have tax-free Amazon because the number of things I buy from Amazon that I need right now is pretty small. Oh well.

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Re: Amazon Pushing for Same-Day Delivery

Postby yoni45 » Mon Jul 16, 2012 7:30 pm UTC

sardia wrote:Oh no, I really liked avoiding sales tax, it's a shame that they gave in on that. =\


I seriously hate this short-sighted mentality. I mean, you're effectively saying "Fuck You" to any and all local businesses that exist around you.

And that's not a "Fuck you because you can't a provide good product or good service that competes with an online retailer" -- no, this is a "Fuck you because you're an honest business that doesn't abuse shady legal loopholes to fuck over its competition".
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Re: Amazon Pushing for Same-Day Delivery

Postby lutzj » Mon Jul 16, 2012 9:32 pm UTC

yoni45 wrote:
sardia wrote:Oh no, I really liked avoiding sales tax, it's a shame that they gave in on that. =\


I seriously hate this short-sighted mentality. I mean, you're effectively saying "Fuck You" to any and all local businesses that exist around you.

And that's not a "Fuck you because you can't a provide good product or good service that competes with an online retailer" -- no, this is a "Fuck you because you're an honest business that doesn't abuse shady legal loopholes to fuck over its competition".


The actual solution to sales taxes is to replace them with more sensible taxes (e.g., VAT), not to simply dodge them by dealing outside of state lines. yoni45 is right that that approach is just an arbitrary subsidy to businesses that avoid taxes.
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Re: Amazon Pushing for Same-Day Delivery

Postby EdgarJPublius » Tue Jul 17, 2012 1:33 am UTC

It was only ever a matter of time before Amazon had to pay sales taxes anyway, New York showed that.


If they can offer free same-day shipping, that would balance out the cost of sales taxes, and add convenience as well. this is a good move for them.

Also, does anyone else see this as one step closer to 'Amazon.com' brick and mortar retail outlets?
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Re: Amazon Pushing for Same-Day Delivery

Postby Jahoclave » Tue Jul 17, 2012 4:40 am UTC

Yeah, generally Amazon is my only option on a lot of books if I don't want to tell the author fuck you I won't give you any royalties by buying the book used--which, albeit I have done quite often because I basically have zero money and needed the books for class. But, places like Barnes and Noble have such a shit selection it's often not worth me going there, and everything else in town is a used bookstore.

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Re: Amazon Pushing for Same-Day Delivery

Postby Endless Mike » Tue Jul 17, 2012 12:31 pm UTC

Major cities have had this for awhile. I even used it once!

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Re: Amazon Pushing for Same-Day Delivery

Postby Dark567 » Tue Jul 17, 2012 6:12 pm UTC

lutzj wrote:I suspect this might recreate an opening for mom-and pop stores, whose advantages (service, quality) will be even more stark compared to online retailers.
Honestly I see this hurting every type of brick-and-mortar stores. People have already shown they are willing to sacrifice service* for costs with Walmart.
*And by service, I mean personalized service. Walmart's return policy is pretty encompassing compared to most mom and pop shops.
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Re: Amazon Pushing for Same-Day Delivery

Postby Роберт » Tue Jul 17, 2012 6:31 pm UTC

Jahoclave wrote:Yeah, generally Amazon is my only option on a lot of books if I don't want to tell the author fuck you I won't give you any royalties by buying the book used--which, albeit I have done quite often because I basically have zero money and needed the books for class. But, places like Barnes and Noble have such a shit selection it's often not worth me going there, and everything else in town is a used bookstore.

Not that amazon doesn't screw the authors as much as possible anyway.

http://andrewhy.de/amazons-markup-of-di ... is-129000/
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Re: Amazon Pushing for Same-Day Delivery

Postby Xeio » Tue Jul 17, 2012 7:07 pm UTC

This makes me feel better about liking Nook more. :mrgreen:

Though not much more...

Actually, this is a similar reason to why I don't like Amazon's android store.

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Re: Amazon Pushing for Same-Day Delivery

Postby Diadem » Tue Jul 17, 2012 8:50 pm UTC

So how does that compare to paper versions of a book? I doubt you get more than 10% of the sale price there, as an author.
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Re: Amazon Pushing for Same-Day Delivery

Postby sardia » Tue Jul 17, 2012 8:51 pm UTC

yoni45 wrote:
I seriously hate this short-sighted mentality. I mean, you're effectively saying "Fuck You" to any and all local businesses that exist around you.

And that's not a "Fuck you because you can't a provide good product or good service that competes with an online retailer" -- no, this is a "Fuck you because you're an honest business that doesn't abuse shady legal loopholes to fuck over its competition".

Image
I'm not going to change the market by me paying more for products I buy. I can't even support a mom and pop store with what I buy, nor would I want to support one simply because they are a mom and pop store.
It be like you paying cash for everything just so you could save the store 3-5% on credit card transaction fees for merchants. Do the merchants lower prices or give a discount if you spend cash? Or do they just the savings and pocket it leaving you a sucker?
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Re: Amazon Pushing for Same-Day Delivery

Postby Роберт » Tue Jul 17, 2012 9:52 pm UTC

Diadem wrote:So how does that compare to paper versions of a book? I doubt you get more than 10% of the sale price there, as an author.

From the article I linked
UPDATE #8 The full color 8.5in x 8.5in print version is on sale here. I see $8.37 of the $25 sale if you buy it through that link (33%), and $3.37 if you buy it through Amazon (13%). It is print on demand so there are no ongoing fees for storage or up front costs.
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Re: Amazon Pushing for Same-Day Delivery

Postby morriswalters » Wed Jul 18, 2012 1:03 am UTC

He's buying a service and a audience, and he's smart enough to self advertise, to increase his share. Methinks he's not harmed too much. How many people would find him, without Amazon?

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Re: Amazon Pushing for Same-Day Delivery

Postby Sizik » Wed Jul 18, 2012 1:22 am UTC

sardia wrote:It be like you paying cash for everything just so you could save the store 3-5% on credit card transaction fees for merchants. Do the merchants lower prices or give a discount if you spend cash? Or do they just the savings and pocket it leaving you a sucker?


I've seen gas stations that charge more if you pay with credit than if you pay with cash.
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Re: Amazon Pushing for Same-Day Delivery

Postby Crius » Wed Jul 18, 2012 2:33 am UTC

Роберт wrote:http://andrewhy.de/amazons-markup-of-digital-delivery-to-indie-authors-is-129000/
Image


That's... quite a misleading graph if you're using it as a general statement on Amazon. It's an accurate number for his book, and only his book. A normal text-only book would have a delivery charge of less than 10 cents (~.5MB @ $0.15/MB), which would amount to ~69% royalty on a $9.99 book.

(it's also unclear whether the delivery charge applies to wireless or not, even though it's boldly stated on the graph)

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Re: Amazon Pushing for Same-Day Delivery

Postby Endless Mike » Wed Jul 18, 2012 1:23 pm UTC

Sizik wrote:
sardia wrote:It be like you paying cash for everything just so you could save the store 3-5% on credit card transaction fees for merchants. Do the merchants lower prices or give a discount if you spend cash? Or do they just the savings and pocket it leaving you a sucker?


I've seen gas stations that charge more if you pay with credit than if you pay with cash.

Yep, the CARD Act authorized this. Any store can do it.

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Re: Amazon Pushing for Same-Day Delivery

Postby Ghostbear » Wed Jul 18, 2012 1:39 pm UTC

Endless Mike wrote:Yep, the CARD Act authorized this. Any store can do it.

Are you sure about that? I don't remember it being part of it, and I didn't see it in any summaries that I skimmed through just now. What companies have been able to do (before the CARD Act as well) was to give a discount for cash payments. So the nominal price could be $3, and with expected credit card fees of $0.25 they would raise the price to $3.25, then give people paying in cash a $0.25 discount on the item.

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Re: Amazon Pushing for Same-Day Delivery

Postby Endless Mike » Wed Jul 18, 2012 2:22 pm UTC

Ghostbear wrote:
Endless Mike wrote:Yep, the CARD Act authorized this. Any store can do it.

Are you sure about that? I don't remember it being part of it, and I didn't see it in any summaries that I skimmed through just now. What companies have been able to do (before the CARD Act as well) was to give a discount for cash payments. So the nominal price could be $3, and with expected credit card fees of $0.25 they would raise the price to $3.25, then give people paying in cash a $0.25 discount on the item.

Ah, yeah, you're right. For some reason I thought the CARD Act explicitly authorized it, but it looks like it's been in the FDIC regulations for awhile. http://www.fdic.gov/regulations/laws/ru ... dic6500167

Looking around, it looks like I was a bit confused in that an early amendment would have let merchants *increase* prices on transactions made with credit cards.

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Re: Amazon Pushing for Same-Day Delivery

Postby Chen » Wed Jul 18, 2012 2:50 pm UTC

Ghostbear wrote:Are you sure about that? I don't remember it being part of it, and I didn't see it in any summaries that I skimmed through just now. What companies have been able to do (before the CARD Act as well) was to give a discount for cash payments. So the nominal price could be $3, and with expected credit card fees of $0.25 they would raise the price to $3.25, then give people paying in cash a $0.25 discount on the item.


This is just semantics though. It's effectively the same thing. I suppose it affects advertising more since you have to show the higher price though.

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Re: Amazon Pushing for Same-Day Delivery

Postby Ghostbear » Wed Jul 18, 2012 2:57 pm UTC

Chen wrote:This is just semantics though. It's effectively the same thing. I suppose it affects advertising more since you have to show the higher price though.

The advertised price is rather significant here. A lot of prices are aimed for psychological prices -- what is more likely to sell, something at $2.99 or something at $3.24? Most people aren't going to be figuring the cash discount into their purchasing decisions anyway (since it's likely to be something relatively intangible like "$0.27 and 2.5% off the final price"). So once you raise the prices to deal with them, you might as well let the people paying cash pay for the extra too, as they already factored the higher prices in when deciding what to buy.

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Re: Amazon Pushing for Same-Day Delivery

Postby Роберт » Wed Jul 18, 2012 3:11 pm UTC

Ghostbear wrote:
Chen wrote:This is just semantics though. It's effectively the same thing. I suppose it affects advertising more since you have to show the higher price though.

The advertised price is rather significant here. A lot of prices are aimed for psychological prices -- what is more likely to sell, something at $2.99 or something at $3.24? Most people aren't going to be figuring the cash discount into their purchasing decisions anyway (since it's likely to be something relatively intangible like "$0.27 and 2.5% off the final price"). So once you raise the prices to deal with them, you might as well let the people paying cash pay for the extra too, as they already factored the higher prices in when deciding what to buy.

Gas stations advertise the cash price on their big signs. I've also seen other stores do things like a 5% discount if you pay cash, and list the price and cash price separately on all their items. More stores should do this type of thing, because it's less of a market distortion than hiding costs from the consumer.
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Re: Amazon Pushing for Same-Day Delivery

Postby Ghostbear » Wed Jul 18, 2012 3:27 pm UTC

Роберт wrote:Gas stations advertise the cash price on their big signs. I've also seen other stores do things like a 5% discount if you pay cash, and list the price and cash price separately on all their items. More stores should do this type of thing, because it's less of a market distortion than hiding costs from the consumer.

That still sounds like more hassle than I'd like. If something is to be done, the best solution I've seen is to just add the fees onto the bill afterwards, making it a separate line on the receipt. Though I do dislike the idea of passing all the fees onto the customer as well -- retailers get a significant benefit out of not needing to have all of that cash on hand. It's that much less money they need to worry about in the case of a robbery, or to design security for. It's that much less money that needs to be counted from the registers to make sure no one is stealing any or making goofs. It's that much less time after each purchase spent counting up and giving out change. It's that much less likely that they need to get an armored van or similar to transfer the weekly proceeds to a bank, and that much less money to worry about if the manager just brings the money to the bank directly.

I understand that there's a lot of flaws with the current system -- it does nothing to discourage the credit card companies increasing their rates, as much of the cost as possible is passed onto the customer as they can get away with anyway, and it's horribly opaque as a process. I don't know that I have that much pity for retailers that want to get all of the benefit for themselves but pass all of the cost onto me. I'd much prefer that they just put hard limits on the fees and/or made them transparent with some portion (half?) of that transparent fee able to be passed onto the customer.

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Re: Amazon Pushing for Same-Day Delivery

Postby Роберт » Wed Jul 18, 2012 3:52 pm UTC

Crius wrote:That's... quite a misleading graph if you're using it as a general statement on Amazon. It's an accurate number for his book, and only his book.
I was just pulling up a specific example, but this is certainly not the only case in which Amazon does this sort of thing.

Amazon is taking advantage of the control they have and the opaque system to take as much profit as they can. I have nothing against seeking out profit, but if I'm buying a book, I often don't much care where I buy it from. Similarly, it doesn't make a whole lot of difference to me to pay with a credit card vs debit card vs cash. Hiding the costs from me, the consumer, makes me make choices that are cost vs utility of those choices. It distorts the market.
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Re: Amazon Pushing for Same-Day Delivery

Postby morriswalters » Wed Jul 18, 2012 7:29 pm UTC

When have you ever known the true costs of a book, and why would you care?

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Re: Amazon Pushing for Same-Day Delivery

Postby sardia » Thu Jul 19, 2012 12:21 am UTC

morriswalters wrote:When have you ever known the true costs of a book, and why would you care?

Text books. Because then I can cry foul when the author publishes a new edition with 2 swapped paragraphs, and demands 200$ a pop. I would cry foul anyway, but that's not the point. It's not like calculus or history has changed in the last 20 years.

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Re: Amazon Pushing for Same-Day Delivery

Postby morriswalters » Thu Jul 19, 2012 12:53 am UTC

Textbooks are a special case. You're a captive audience.

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Re: Amazon Pushing for Same-Day Delivery

Postby drewder » Thu Jul 19, 2012 2:14 am UTC

It doesn't seem necessary for them to do open up centers all over. This is what brown (ups) can do for you. When I worked at NetApp we would often have 2-4 hour SLAs on hard drive replacement. UPS has warehouses strategically located and when an order came in they would pull it out of their local warehouse and have it to the customer licitly split. Mind you this wasn't cheap but at the volume amazon does it should be a bit more reasonable.

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Re: Amazon Pushing for Same-Day Delivery

Postby cjmcjmcjmcjm » Thu Jul 19, 2012 3:21 am UTC

It'd be cool, but if Amazon both charges sales tax on normal delivery and makes same-day delivery cost more, I'll be quite pissed. Who knows, maybe the const increases from that will be enough to make it worth the gas and time costs to find brick-and-mortar stores that sell the specific item you are looking for.

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morriswalters wrote:When have you ever known the true costs of a book, and why would you care?

Text books. Because then I can cry foul when the author publishes a new edition with 2 swapped paragraphs, and demands 200$ a pop. I would cry foul anyway, but that's not the point. It's not like calculus or history has changed in the last 20 years.

Use my strategy: get an old edition if you really need the information within and incessantly bug friends to borrow the current edition for HW problems. Either that or just torrent it.
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Re: Amazon Pushing for Same-Day Delivery

Postby Adacore » Thu Jul 19, 2012 6:18 am UTC

drewder wrote:It doesn't seem necessary for them to do open up centers all over. This is what brown (ups) can do for you. When I worked at NetApp we would often have 2-4 hour SLAs on hard drive replacement. UPS has warehouses strategically located and when an order came in they would pull it out of their local warehouse and have it to the customer licitly split. Mind you this wasn't cheap but at the volume amazon does it should be a bit more reasonable.

Presumably Amazon calculate that with their volume of business (or, probably, their projected volume of business over the next decade), it's more economical for them to run their own delivery network than it is for them to outsource it - they're operating at levels where it's worth running an entire delivery network just for a single business.

I guess it gives you other advantages in things like analytics and flexibility, as well, if you own the whole process rather than having subcontracted it. You can get whatever data you want on the shipping side of things, because you own the delivery infrastructure, and other people don't have access to the data, which may also be of value. You're also able to decide to do things a different way without having to renegotiate contracts, for example.


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