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Amazon is the Next Generation's Wal-mart (seekingalpha.com)

15 points by scottieh ↗ HN
Friendland also contends that “Amazon’s aggressive investment in search, site content, customer service, digital distribution and third party platform have resulted in a sustainable competitive advantage.”

16 comments

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scottieh
Friendland also contends that “Amazon’s aggressive investment in search, site content, customer service, digital distribution and third party platform have resulted in a sustainable competitive advantage.”
russell
Amazon has it nailed for books, but I find that it is only middling for other products. More often I purchase elsewhere. Amazon Prime is great but it often doesn't apply to heavier products. Anything carried by a third-party Amazon store probably has a cost disadvantage compared to a standalone web site. That being said, Amazon probably does have a significant advantage due to its infrastructure.

EDIT: I've looked at things recently that Prime didnt apply to, Torani syrups for example. These were from third party stores. It may be the individual stores option whether it participates in Prime.

unexpected
heavier products like what? I use prime for everything, and have never had a problem...even when I ordered my TV, the gold box shipping was free and it still came pretty quickly...
scottieh
to my knowledge, prime applies to everything -- and it's a huge success. piperjaffray reports there are about 2 million Prime users worldwide and a 20% increase in spending on Amazon after users sign up for Prime.

2m users x $79 per year = $158 million by the way. huge. and that's just revenue from the subscription service, not including the average order increase. plus a 92% renewal rate.

re: amazon stores -- third-party amazon stores offer a great deal for retailers who want to backfill their inventory with products they don't actually carry. amazon then pays the retailer affiliate fees, and the buyer doesn't know the difference.

ajju
Re: "to my knowledge, prime applies to everything"

It definitely doesn't apply to items sold by third parties

scottieh
definitely not true. Fulfillment by Amazon enables third-party products to get Amazon Prime and Super Saver Shipping -- my mintsy.com business utilizes this
ajju
Yes, but a large number of items sold by third parties are not fulfilled by amazon.com. For example if you look at the treadmills in the sports section, only items sold by Amazon.com have prime or super saver.
scottieh
Your point is valid -- Amazon does enable third-party sellers onto the platform that don't utilize Amazon's shipping infrastructure (FBA, which is a recent development). But online retailers can easily leverage FBA to become as competitive with Amazon in terms of shipping perks.
smokey_the_bear
I order canned tomatoes from Amazon, and prime covers it just fine. Must cost more than the tomatoes to two-day it.
frossie
Amazon Prime does not apply to the upper 2 states (Hawaii and Alaska) but you can still get super saver shipping on a huge range of goods. Thus Amazon is really the first port of call in any online shopping expedition around here.

The reason for this is that most other online merchants only ship FedEx or UPS, and their Hawaii/Alaska rates are just insane - easily exceeding the cost of whatever it is you are buying in most circumstances. Because Amazon uses USPS (as well as a service called ParcelPool), even when you want to pay for shipping in order to have a faster delivery they are still a better option.

Gimbal
Customer service, indeed. I use Amazon.com on a regular basis, for their MP3 downloads, and just started using 'em for MTB accessories (gloves, saddlebag, bug repellent, etc)

One thing that differentiates Amazon.com from walmart, though: Amazon.com supports individual retailers, in a serious -- and, I suppose, fun looking -- way

luckyland
Does Walmart give local, independent retailers or manufacturers floor space and transactional support?
tybris
Walmart is not that smart.
padmanabhan01
It is a question of who is more important - local residents or local manufacturers. If walmart can help local residents save money by cutting costs, why not?
kvs
Amazon is the next gen's ConEdison/PSEG is something to note as well. Would have been interesting to look at how the strategy of being #1 in book sales and introducing Kindle at the right time to handle the transition to e-books came about. The amount of forethought is intriguing.