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"Profit was held back by a big jump in fulfillment costs, which increased 32.8% year-over-year in the fourth quarter and nearly 25% for the full year. Amazon sp

"Profit was held back by a big jump in fulfillment costs, which increased 32.8% year-over-year in the fourth quarter and nearly 25% for the full year. Amazon spent $4.55 billion in the fourth quarter to fulfill customers’ orders, up from $3.4 billion in the same quarter a year ago, and the increase cannot be explained away by increases in Amazon sales, as the percentage of revenues spent on shipping also increased, from 11.6% to 12.7%." [1] "There is more than loyalty at stake for Atlanta-based UPS. This year, its Amazon account exceeds $1 billion. ... The average cost to handle a parcel was about $8 last year." [2] "Some analysts say the move could help position Amazon to offer shipping services to other companies, eventually competing with the likes of United Parcel Service and DHL Worldwide Express. ... Amazon rolled out thousands of its own trailers and launched an Uber-like delivery service last year to handle the so-called last mile of delivery, taking packages from distribution centers to customers' homes." [3] 1: http://www.marketwatch.com/mw2/palm/marketwatch/story.asp?guid=%7BB574014E-C615-11E5-B1F8-BB568A8AE505%7D http://www.marketwatch.com/mw2/palm/marketwatch/story.asp?gu... 2: http://www.nasdaq.com/article/amazon-seeks-to-ease-ties-with-ups-20151222-00789 http://www.nasdaq.com/article/amazon-seeks-to-ease-ties-with... 3: http://www.nbcnews.com/tech/tech-news/amazon-drops-hints-it-could-be-building-global-shipping-business-n514921 http://www.nbcnews.com/tech/tech-news/amazon-drops-hints-it-...

Gustomaximus 11y ago
> The average cost to handle a parcel was about $8 last year. Thats still Amazing low cost considering what has to be done to deliver a parcel. Though I'm more surprised Amazon hasn't set up an Argos style business in high density cities. For those that dont know Argos it's in the UK and its basically a collection shopfront with catalogues infromt of the counter. You browse the catalogue, write down the numbers and staff go out the back and bring you what you asked for. They have a huge range and while strange at first shopping in person from a book catalogue it works amazingly well for a bunch of shopping needs. It would merge perfectly with a Amazon like business.
- foota 11y ago
  Perhaps this is the kind of thing they're going for with for instance, their brick and mortar book stores?
- noobermin 11y ago
  Argos sounds cool, but yes, it seems like it'd only work in high density areas, where, surprise, it's easy to just go and buy such things in person. Amazon was a godsend for me when I went to college in rural TN, so an Argos like model wouldn't have helped there. I basically, yes, took advantage of their cheap shipping in that case, although I did have prime.
  - talideon 11y ago
    If by 'high density', do you mean a town of about 12,000? Because there are Argos shops here in Ireland in towns with populations like that out in the west coast where the population density is relatively low.
- Pxtl 11y ago
  There used to be a Canadian chain called Consumers Distributing that did that business model in Canada/US - I remember loving their catalogues as a kid. They closed in the '90s. I think the business model works better in Europe where floor-space is at a premium. Here in North America, they just build gigantic warehouse-styled stores with wide aisles and spartan decor and let the customers pick up their own crap. Presto, Wal-Mart and Costco.
- silencio 11y ago
  Prime Now (the same-day 2hr service to deliver items from a local warehouse) seems to be basically the same thing without having to pay for the physical space required to have shops with storage in the back.
- fencepost 11y ago
  I believe that the Argos-style staff-retrieving-everything is the way a high percentage of shops used to be, and there are still a few vestiges of it in some industries and areas. I'm not sure exactly where to find information on how the individual retail experience has changed over the decades, but I expect that direct consumer retrieval of items became the standard as larger stores and department stores became more widespread. Notably in general retail, dedicated shoe stores in the USA are quite often like this though discount shoe stores now often tend to simply have stacks of boxes below a display shoe and it's up to the consumer to find which sizes/styles are in stock. It's also the standard for compact high-value goods such as jewelry. There are probably still also shops (even grocers) in high-crime areas that simply work everything this way.
- edsouza 11y ago
  Lee Valley Tools[1] operates in a similar manner North America. But they specialize in woodworking and gardening tools. [1] https://www.leevalley.com/ https://www.leevalley.com/
- autopov 11y ago
  In the States there was a similar company[0]: Best Products Company. You'd go in, browse the display models or thumb through a catalog, and if you wanted to buy you'd go to the sales counter, place your order, the clerk would fill out a form in triplicate, make a call, and about twenty minutes later, your item would come from the stock room on a long conveyor belt. As a kid, it was great fun to watch, but I wouldn't put up with it these days. If I have to fight traffic and go to a shop, I like to get in and get out as fast as possible. Best was best (ahem) known for its funky stores' architecture. The one in Sacramento, California, was especially interesting[1]. A corner of the building was literally removed to open the showroom then put back at night to close up shop. [0] https://en.wikipedia.org/wiki/Best_Products https://en.wikipedia.org/wiki/Best_Products [1] http://www.emporis.com/buildings/1260719/best-products-showroom-sacramento-ca-usa http://www.emporis.com/buildings/1260719/best-products-showr...
  - adaml_623 11y ago
    Totally personal side note here. I saw a 'That's incredible' TV advert mentioning but not explaining the Sacramento shop front with the sliding wall. I never saw the program. It was the early 80s, I was under 10 years old, and I was left confused until literally just now. Thank you. That's a personal 30 year mystery explained.
- ascorbic 11y ago
  They're mostly moving away from the pen and paper to entering it directly into a self-service touchscreen and paying on the spot. Much quicker. I've been in and out in 5 minutes. Of course they also do the pay online thing that so many bricks and mortar stores do. Many times I've ordered online, walked down 5 minutes from my office and it's ready when I get there.
- lucaspiller 11y ago
  I can't help but think the days are numbered for Argos. Since internet retailers have come along (which are usually a lot cheaper) the only real reason to buy from them is if you need something now rather than next day or in a few days. At the same time supermarkets have expanded into selling the same sort of products that Argos sells (small appliances, electronics, toys, etc). I can't find any numbers on Argos itself, but the group that owns them (as well as a few other large retailers in the UK) made profits of £93.8m on revenues of £5.7B last year: https://en.wikipedia.org/wiki/Home_Retail_Group#Financial_performance https://en.wikipedia.org/wiki/Home_Retail_Group#Financial_pe...
  - aembleton 11y ago
    I don't think their days are numbered. I find them to be pretty competitive price wise against the likes of Amazon, with the advantage that I can get the item right now. Like you said, that applies to supermarkets, but if for example I wanted to purchase a kettle in my local Sainsburys I don't think they have a website that lets me check out reviews and order for my local store. I'm sure they could delver something but so could Amazon. Also, if you order before 6PM you can get same day delivery: http://www.argos.co.uk/static/ArgosPromo3/includeName/fast-track.htm http://www.argos.co.uk/static/ArgosPromo3/includeName/fast-t... and they cover much more of the country than Amazon PrimeNow service. It's service like this that makes me think Argos are seriously fighting back against Amazon now.

Gustomaximus 11y ago

> The average cost to handle a parcel was about $8 last year. Thats still Amazing low cost considering what has to be done to deliver a parcel. Though I'm more surprised Amazon hasn't set up an Argos style business in high density cities. For those that dont know Argos it's in the UK and its basically a collection shopfront with catalogues infromt of the counter. You browse the catalogue, write down the numbers and staff go out the back and bring you what you asked for. They have a huge range and while strange at first shopping in person from a book catalogue it works amazingly well for a bunch of shopping needs. It would merge perfectly with a Amazon like business.

foota 11y ago
Perhaps this is the kind of thing they're going for with for instance, their brick and mortar book stores?
noobermin 11y ago
Argos sounds cool, but yes, it seems like it'd only work in high density areas, where, surprise, it's easy to just go and buy such things in person. Amazon was a godsend for me when I went to college in rural TN, so an Argos like model wouldn't have helped there. I basically, yes, took advantage of their cheap shipping in that case, although I did have prime.
- talideon 11y ago
  If by 'high density', do you mean a town of about 12,000? Because there are Argos shops here in Ireland in towns with populations like that out in the west coast where the population density is relatively low.
Pxtl 11y ago
There used to be a Canadian chain called Consumers Distributing that did that business model in Canada/US - I remember loving their catalogues as a kid. They closed in the '90s. I think the business model works better in Europe where floor-space is at a premium. Here in North America, they just build gigantic warehouse-styled stores with wide aisles and spartan decor and let the customers pick up their own crap. Presto, Wal-Mart and Costco.
silencio 11y ago
Prime Now (the same-day 2hr service to deliver items from a local warehouse) seems to be basically the same thing without having to pay for the physical space required to have shops with storage in the back.
fencepost 11y ago
I believe that the Argos-style staff-retrieving-everything is the way a high percentage of shops used to be, and there are still a few vestiges of it in some industries and areas. I'm not sure exactly where to find information on how the individual retail experience has changed over the decades, but I expect that direct consumer retrieval of items became the standard as larger stores and department stores became more widespread. Notably in general retail, dedicated shoe stores in the USA are quite often like this though discount shoe stores now often tend to simply have stacks of boxes below a display shoe and it's up to the consumer to find which sizes/styles are in stock. It's also the standard for compact high-value goods such as jewelry. There are probably still also shops (even grocers) in high-crime areas that simply work everything this way.
edsouza 11y ago
Lee Valley Tools[1] operates in a similar manner North America. But they specialize in woodworking and gardening tools. [1] https://www.leevalley.com/ https://www.leevalley.com/
autopov 11y ago
In the States there was a similar company[0]: Best Products Company. You'd go in, browse the display models or thumb through a catalog, and if you wanted to buy you'd go to the sales counter, place your order, the clerk would fill out a form in triplicate, make a call, and about twenty minutes later, your item would come from the stock room on a long conveyor belt. As a kid, it was great fun to watch, but I wouldn't put up with it these days. If I have to fight traffic and go to a shop, I like to get in and get out as fast as possible. Best was best (ahem) known for its funky stores' architecture. The one in Sacramento, California, was especially interesting[1]. A corner of the building was literally removed to open the showroom then put back at night to close up shop. [0] https://en.wikipedia.org/wiki/Best_Products https://en.wikipedia.org/wiki/Best_Products [1] http://www.emporis.com/buildings/1260719/best-products-showroom-sacramento-ca-usa http://www.emporis.com/buildings/1260719/best-products-showr...
- adaml_623 11y ago
  Totally personal side note here. I saw a 'That's incredible' TV advert mentioning but not explaining the Sacramento shop front with the sliding wall. I never saw the program. It was the early 80s, I was under 10 years old, and I was left confused until literally just now. Thank you. That's a personal 30 year mystery explained.
ascorbic 11y ago
They're mostly moving away from the pen and paper to entering it directly into a self-service touchscreen and paying on the spot. Much quicker. I've been in and out in 5 minutes. Of course they also do the pay online thing that so many bricks and mortar stores do. Many times I've ordered online, walked down 5 minutes from my office and it's ready when I get there.
lucaspiller 11y ago
I can't help but think the days are numbered for Argos. Since internet retailers have come along (which are usually a lot cheaper) the only real reason to buy from them is if you need something now rather than next day or in a few days. At the same time supermarkets have expanded into selling the same sort of products that Argos sells (small appliances, electronics, toys, etc). I can't find any numbers on Argos itself, but the group that owns them (as well as a few other large retailers in the UK) made profits of £93.8m on revenues of £5.7B last year: https://en.wikipedia.org/wiki/Home_Retail_Group#Financial_performance https://en.wikipedia.org/wiki/Home_Retail_Group#Financial_pe...
- aembleton 11y ago
  I don't think their days are numbered. I find them to be pretty competitive price wise against the likes of Amazon, with the advantage that I can get the item right now. Like you said, that applies to supermarkets, but if for example I wanted to purchase a kettle in my local Sainsburys I don't think they have a website that lets me check out reviews and order for my local store. I'm sure they could delver something but so could Amazon. Also, if you order before 6PM you can get same day delivery: http://www.argos.co.uk/static/ArgosPromo3/includeName/fast-track.htm http://www.argos.co.uk/static/ArgosPromo3/includeName/fast-t... and they cover much more of the country than Amazon PrimeNow service. It's service like this that makes me think Argos are seriously fighting back against Amazon now.