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Amazon Bought Me for $100 a Year
- ktamura 11y agoAmazon 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 11y agoThe 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 11y agoKind 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.
- rickyc091 11y agoHmm, what are you purchasing that's more expensive than Amazon? Electronics and books are typically roughly the same cost. Household items are generally a little more expensive, but on some occasions it's the same or cheaper.
- douche 11y agoOn 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.
- wskinner 11y agoAssuming that you would have paid $8-$10 for that level of shipping before. If you're like me, you never would have paid extra for 2-day shipping, but when it's framed in the language of "free", everything changes.
- douche 11y agoI'm not that old, and I remember when you had to pay for any level of shipping.
- detaro 11y agoIf you compare Amazon with Prime to Amazon without and don't care about the speed, you only save on shipping if you often order <30 €. So Amazon has that benefit over many other stores even if you do not pay for Prime. Shipping prices generally are interesting. I get that shipping isn't free, but often enough there really would be potential to optimize. E.g. Amazon ships what they can in small cardboard envelopes (stuff like USB drives, small cables, electronic parts, that kind of thing). Efficient and fast. Other sellers want 4.99 € shipping for that. Which, if I' buying stuff for 15-25 €, is a notable percentage of the price. (And yes, if you send me a big shipping box in which I have to dig through the packaging chips to find the product, then you probably paid close to that for shipping, but that really wasn't necessary) Or the one that also has stores, where you can either pay 5.99 € shipping or do store pickup. And I'm thinking "eh, the price is a bit cheaper than everywhere else, but they want more shipping. BUT I can easily pick it up myself and maybe even get it a bit quicker.". Change the shipping method, and discover that it now charges me no shipping, but increased the product price by 5.99 €. And which point I ordered somewhere else, didn't go to their (big, probably expensive) store and didn't have a chance to be tempted to buy some additional stuff there.
- tokenadult 11y agoThat'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.
- peteretep 11y agoI 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.
- natch 11y agoWhich saves you money on unneeded purchase. Although there's no reason to abandon them, since there are no extra shipping costs if you simply choose the free option that's right there in front of you on the screen (well I can only speak for the US).
- ac29 11y 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?
- apendleton 11y agoNo, I think it's a different sense of "faster" -- it delivers with less than an hour's effort on the part of the customer.
- peteretep 11y agoAt least one flawed assumption you make here is that the drive can be executed immediately.
- ktamura 11y agoIt'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 :-)
- brobinson 11y agoI 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 11y agoI've heard if you pester Amazon support enough they'll stop using a problematic carrier for your orders.
- Veratyr 11y agoTypically, 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).
- brobinson 11y agoInteresting, I didn't know about the extension. They owe me a few months in that case! Thanks for the suggestions about calling their support. I'm going to try that now. EDIT: they're closed. :( I think in the future I'll just have stuff sent to an Amazon locker nearby and I'll pick it up myself...
- chippy 11y agoSpending $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".
- mikeash 11y agoYou 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 11y agoOnly 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.
- musesum 11y agoAm 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 11y 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? ...
- musesum 11y agoI 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 11y agoIsn't that kind of your own fault for not price-checking? Stores often claim they have the best pricing.
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- seansmccullough 11y agoI 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.
- ac29 11y agoThe 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 11y agoIn the UK they recently upped the minimum spend to qualify for free delivery which is what tripped me to get Prime...
- apendleton 11y agoI 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.
- natch 11y agoIt 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.
- dxhdr 11y agoI don't see it that way. I'd rather pay $100 a year to avoid going to chains like Best Buy, Target, Bed Bath, Walmart, what have you. Not only are those places inconvenient compared to online shopping but their products are often inferior, overpriced, or both. Frankly 2 day shipping is awesome, $8/month is totally worth the convenience, no tricks involved. Similarly, does Starbucks trick me when it charges $2.25 for a coffee that I could brew myself for $0.15? Sometimes the convenience is worth it. Amazon Prime makes shopping extremely convenient!
- columbo 11y agoWhen 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.
- natch 11y agoIt'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 11y 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 11y agoI 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 11y agoQuestion: 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.