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Amazon will reportedly soon sell its own private-label groceries
- dmix 10y agoThis is how Standard Oil completely dominated their market, vertical integration brought prices so low no-one could compete. Once same-day delivery and/or drone delivery takes off I predict the grocery store market will start to look similar to retail music/book stores.
- saosebastiao 10y agoStandard Oil's vertical integration brought low prices to what was essentially a process that has a single input and a handful of outputs. The vertical integration of Amazon would involve billions of inputs and billions of outputs. They aren't even remotely comparable, and it is likely that, due to diseconomies of scale, a vertically integrated Amazon would be less efficient than they currently are.
- dmix 10y agoI was talking specifically about Amazon Fresh and the retail grocery market. Not Amazon as a whole. The input/output dynamics don't change very much in that context (by strictly producing commodity style products), except the potential for higher-margins and more efficient distribution channels.
- itgoon 10y agoI doubt they can get shipping cheap enough to make much of a dent in local supermarkets. Music and books can be downloaded. Kitty litter, not so much. Spend 10 minutes outside of a typical suburban grocery store and try to estimate the weight of everything coming out. Will it be used? Sure. I think it's more likely that it will push grocery chains to start/improve their own delivery services. After all, they already have "distribution centers" all over the place.
- dexwiz 10y agoMost grocery stores have their own brands, even the small to medium regional stores. So this should not come as a surprise that a large store will develop its own brand. What I do want to see is the packaging. Most items are meant to be sat on shelves, and displayed to the consumers. But Amazon items won't need to sit on store shelves (just distribution centers) and don't need the packaging to sell themselves. Will Amazon come up with novel packaging optimized for delivery, or will it be more of the same?
- hxnjxn 10y agoOh I hadnt thought about this. Intriguing. I feel like this is where they can differentiate themselves.
- dgemm 10y agoHopefully it will be less plastic and more recyclable.
- cgriswald 10y agoAs a kid, the grocery store's generic brand came in yellow boxes with black letter that stated what was in the box (e.g. "Corn Flakes"). There were no other markings. I can't see Amazon letting a cereal box sit in front of someone while they eat and not try to sell them a Kindle.
- ruddct 10y agoThis should surprise no one. Do you purchase things? Amazon's goal is to sell you them. Then, after it figures out how you buy them, they'll work their way up and down the supply chain to improve their margins. Done. Disclaimer: Former Amazon employee
- ArkyBeagle 10y agoAmazon: More Wal-Mart than Wal-Mart.
- db1 10y agoI cannot foresee how this will play out in the long term for the end consumer. In the short term, consumers get a whole lot of convenience and lower prices. What happens after a large chunk of other stores have gone out of business? How would any new player even approach entering the market? It almost seems impossible unless Amazon systematically screws up and leaves a gap for someone to exploit.
- williamscales 10y agoI guess a new player could offer something novel? Consumers will go for novel food choices over established ones, even if the new one is more expensive or less convenient. But then what if Amazon systematically clones every new success? Maybe everything will be subsumed into Amazon.
- fma 10y agoI believe they will compete more with Aldi and not regular grocery stores that offer everything. As long as grocery stores still offer fresh fruit, meat, deli, florist etc...I will go there. If I need a box of cereal I will spend the extra $.50 for the convenience. But on a day I just need basic necesities, Aldi or Amazon here I come!
- foota 10y agoIt seems like Amazon will be in a better position to offer fresh products in the long term than a grocery store.
- fma 10y agoAmazon already has their "Amazon Basics" line of products for common items. Groceries should come of no surprise.
- mrgreenfur 10y agoDigital wal mart is coming for our grocery stores.
- DiabloD3 10y agoSo, you mean like how Walmart already is?
- mrgreenfur 10y agoYah pretty much. But for some reason tech people think Amazon is better than walmart. I'm not convinced we should be enamored with technology and ignore the actual economics of their business.
- DiabloD3 10y agoI wish I could say that this decision is why I quit AmazonPrime and quit doing business with them already, but I already chose to do that due to how badly they treat customers, how high their prices are, and how limited their selection is. Amazon doesn't provide useful value to consumers anymore, and before they roll out any more services or private label products, they should step back and see why all their customers are jumping ship (yes, quite a few people already have). Edit: For those downvoting me, explain why you think I shouldn't have quit Amazon. They do not have good pricing, they don't have a good selection for a lot of things I want to buy, the Subscribe & Save and Pantry programs are extremely limited, and they keep shoving programs I can't use at me (Kindle related stuff, their Netflix and Google Music clones, etc). I don't see the point in paying a per item price premium on top of a $100/yr fee for what amounts to a broken UX.
- pbreit 10y agoI'm guessing you're being downvoted because no one can figure out which Amazon you are referring to...certainly not the one selling a massive selection of items at very competitive prices with fast free shipping and the functional website located at amazon.com
- x0x0 10y agoOr one that mistreats their customers. I bought mite spray for a plant. The ad showed it come in a sprayer but it didn't; just a normal bottle. I told amazon that the product page was inaccurate, but that I had a spare sprayer bottle so I didn't care. They still refunded the purchase price and told me to keep it. I lost a shipment of nearly $200 of books: USPS said it was delivered but I didn't receive it. Amazon send me a replacement shipment via 2-day for free with zero hassle. When the first shipment showed up weeks later, I emailed amazon. They gave me a coupon for returning them. Amazon has proactively refunded movie purchases because they detected streaming issues. It was my wifi router acting up. UPS -- not amazon -- had trouble delivering a gift and I had to talk to a customer service agent at amazon. Amazon gave me two free months of prime for UPS's mistake. While I wish they would kick knockoff electronics vendors off their site, it's hard to say that amazon doesn't take care of their customers. I'm averaging over 60 orders per year with virtually no hassle. I click and stuff shows up at my doorstep. It's like living in the future :D
- 55acdda48ab5 10y agoI went ahead and put a trailing stop loss $5K short position on Amazon a couple days ago. I'm of the opinion Amazon is an amazing scam. http://investmentresearchdynamics.com/amazondotcon/ http://investmentresearchdynamics.com/amazondotcon/
- mancerayder 10y agoCouldn't you back up that claim without sending us a self?-plugging link? We're a bunch of clever geeks here, not Youtube commenters. People don't fall for that as easily.
- 55acdda48ab5 10y agoI am not Mr. Kranzler. I just read his work.
- 55acdda48ab5 10y agoFanbois are downvoting me but this headline illustrates how Amazon operates. They pump the PR and press cycle to get a pop and work it for all it's worth for cash extraction to insiders. Their accounting practices are enron level egregious. This is going to blow up at some point. * Though I must add apology that this is a rather low information post with a low quality link. Mr. Kranzler details elsewhere in his feed the extent to which Amazon abuses GAAP.
- pbreit 10y agoAnd your commenting to people that have had consistently amazing experiences with Amazon for over 10 years.
- 55acdda48ab5 10y agoMe too. Devoted customer. Short position.
- joesmo 10y agoI don't think you should presume to speak for others on this matter, thank you.
- freyr 10y agoI've inadvertently purchased a lot of low quality junk from Amazon lately propped up by fake reviews and shady third-party dealers peddling counterfeit goods. If they want to sell me vitamins and food, they need to fix their brand. Are they a supermarket that is in control what they sell, or are they a back-alley bazaar that's strictly buyer-beware?
- machinagod 10y agoI've had good success in contacting Amazon's customer service when a product is mis-represented or of poor quality. Are they blowing it these days?
- djsumdog 10y agoApparently you should never buy sex toys on Amazon. They're mostly low quality counterfeits, most that break easily but some that are unsafe. A lot of the good manufactures refuse to sell to anyone who has an Amazon store. Most people don't talk about it cause..sex toys. giggle Amazon also has a book store in Seattle (a real physical bookstore). Both their air delivery and dash button ads look like they should be on a show like should be satire. But they're real. People are actually developing these things. Pretty soon we'll be consuming all the time. You'll never stop shopping. Amazon is pretty much the new Wal-Mart. I often go out of my way to not buy thorough them and it makes me sad that they own woot now (cause those t-shirts are awesome).
- x0x0 10y agoThey're a back alley bazaar. Don't buy power electronics on amazon. Just buy them straight from monoprice and/or apple.
- joesmo 10y agoBe careful if you return too many of those shitty products, they will close your account, even if you have a Prime membership. Amazon is shady as fuck and an untrustworthy retailer. The way they treat employees is beyond atrocious. Amazon makes Walmart look ethical and honest in comparison.
- 10y ago
- enibundo 10y agoWhat a stupid idea... At the point where globalisation is proving to be a very bad idea, amazon comes out with this. I will never use this service that's for sure.
- kevenwang0531 10y agoThis is part of Amazon's broader strategy to completely upend traditional retail. I wouldn't be surprised if Amazon follows up by launching physical stores in city centers to shelf these private label items, in addition to its Kindle, Fire TV and Echo products. I can also see Amazon stocking online best-seller items in these stores and have the stores act as last-mile pickup locations and drone delivery centers. Just think about the amount of foot traffic these Amazon stores would generate!
- askyourmother 10y agoGiven the recent problem with fakes on Amazon I worry when they move to food - in China they now fake even eggs, rice, amongst others - how will they stop that getting started sold to their customers?
- fblp 10y agoI'm suprised no one had mentioned instacart in this thread. Instacart has partnered with 12 grocery chains in SF. Many of them (including wholefoods) pay instacart commission and there prices are the same as in-store. With these partnerships, instacart could deliver greater diversity of products at lower costs. They've got a long way to go to, but are building a formidable counter to Amazons grocery play.
- zengr 10y agoCurious, will such a move by Amazon make 3rd party sellers fear them more and move to other marketplaces like jet.com or ebay.com? Given amazon's margins really come from its marketplace, they might cannibalize that? Yes, amazon's value for 3rd party sellers is its massive distribution compared to others but its a supply/demand game. If 3rd party sellers start to move to other platforms, maybe jet/ebay can spend more to acquire more demand?