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The switching cost for retail is really low; one Google and you know where you can get the same product for a potential lower price. This means that to win in t

by njitram 10y ago

The switching cost for retail is really low; one Google and you know where you can get the same product for a potential lower price. This means that to win in the retail business you have to accept incredible low margins or even periodically a loss. Online retail is almost a 'perfect' market. While with hosting, it isn't as easy to switch. When you have chosen AWS, of course you can switch to another vendor, but that is not without an investment in time and money. The higher the switching cost, the more you can raise the price above cost without customers (immediately) running away.

treehau5 10y ago
I would argue the exact opposite, but it's because it's not only just the product, but also the customer service and experience. Switching from Amazon to a similar service is a huge risk to me. Will I get the same customer service when I order something and it comes shattered at my door? Can I rely on two day shipping being really 2 days? (I know some people here are whining about it being 3, the majority of us get it within 2, sometimes 1) Can I trust the reviews on the other sites? Will they know my preferences and suggest me other items or books as well as Amazon or are they coercing me? Do I get the same value added from the "premium" subscription such as Prime? Who knows. Switching cloud providers? A snap, provided you have architected your systems according and not treated AWS offerings as black boxes and understand "OK I am using RDS, I can just switch to another MySQL provider easy enough" and prepared accordingly. "Ok I am using Elasticache, time for Redis." I imagine it's even easier if you stuck to containers. And unlike Amazon retail where there really isn't an online store that can match it in terms of customer service and experience, many would argue that a DigitalOcean or similar have better customer service, so there is competition there.

by njitram 10y ago

treehau5 10y ago

I would argue the exact opposite, but it's because it's not only just the product, but also the customer service and experience. Switching from Amazon to a similar service is a huge risk to me. Will I get the same customer service when I order something and it comes shattered at my door? Can I rely on two day shipping being really 2 days? (I know some people here are whining about it being 3, the majority of us get it within 2, sometimes 1) Can I trust the reviews on the other sites? Will they know my preferences and suggest me other items or books as well as Amazon or are they coercing me? Do I get the same value added from the "premium" subscription such as Prime? Who knows. Switching cloud providers? A snap, provided you have architected your systems according and not treated AWS offerings as black boxes and understand "OK I am using RDS, I can just switch to another MySQL provider easy enough" and prepared accordingly. "Ok I am using Elasticache, time for Redis." I imagine it's even easier if you stuck to containers. And unlike Amazon retail where there really isn't an online store that can match it in terms of customer service and experience, many would argue that a DigitalOcean or similar have better customer service, so there is competition there.