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Your point about grocery logistics being difficult is a good one. However, Amazon is not new to this. - Amazon has been shipping tens of thousands of non-peris
by thinkling 9y ago
Your point about grocery logistics being difficult is a good one. However, Amazon is not new to this.
- Amazon has been shipping tens of thousands of non-perishable grocery SKUs from their main site for about 10 years. They've had to deal with expiration dates, chocolate that can melt, bundling multiples, highly variable shipping cost vs margin, etc. That organic cereal you buy at WFM is available on Amazon too.
- They have relationships with all the large packaged-goods companies.
- They've been operating a small-scale local grocery business (Amazon Fresh) for about 10 years, now in 14 cities.
- A lot of this direct-to-consumer business is complementary to Whole Foods' experience.
Whole Foods is stable as a company and (afaict) has higher operating margin's than Amazon's retail business. So they could largely leave them alone but still gain a more-or-less national perishable foods supply chain that lets them open Amazon Fresh and Amazon Go in many more cities much faster than if they had to do it from scratch.