5 ms·

I’m amazed at how little discussion there is of Amazon using WF as a beachhead to go after the grocery warehousing and distribution industry. Retail is just on

by yodon 8y ago

I’m amazed at how little discussion there is of Amazon using WF as a beachhead to go after the grocery warehousing and distribution industry. Retail is just one touchpoint for administering a tax on the industry. Warehousing and distribution is a far more centralized and efficient infrastructure play for a company like Amazon than trying to go after all the individually managed and differentiated retail stores. Does Amazon understand how to do cold warehouse storage and shipping of perishable goods? Not yet. Can they? Certainly.

brudgers 8y ago
In 1992, I worked in a precast/prestressed concrete plant. One of the projects was a 500' fire wall for a Walmart distribution center near Brooksville, Florida. One side was dry goods, the other side was cold goods. There was 1000 linear feat of wall because it was double panel (as fire walls often are). That cold/perishable side was up and running 25 years ago. Before Walmart was even "in the grocery business". Of course before Amazon...Bezos hadn't even left Wall Street. The hype about Amazon and Whole Foods ignores the real logistical challenge of the grocery business at scale. Catching up with Walmart means delivering fresh food everywhere 24 hours a day, not just "in select markets during business hours." I'd put it this way, Walmart's infrastructure can move upscale in the grocery market more easily than Amazon/WF's infrastructure can scale up for grocery sales. A significant amount of Amazon's existing inventory sits as stock in a warehouse. Amazon is not nearly as driven by just in time contracts with suppliers as Walmart.
- deleted 8y ago
  [deleted]
- irq-1 8y ago
  Amazon could combine efficiencies in distribution scale with a marketplace for producers. Wallmart beats the suppliers down on price and quality, and only supplies their own stores. Amazon could supply many chain stores, profiting on the distribution/supply management, and also create a marketplace where suppliers sell to the chain stores, and profiting again on organizing the market.
  - petra 8y ago
    If I'm not mistaken, many food companies have their own logistics. This is probably more efficient than adding Amazon. And I'm sure food companies won't be happy for Amazon to become part of their business unless it's necessary(I.e. Access to Amazon users).
    - niftich 8y ago
      Depends on the food company; and I'd say more of them outsource it than don't. McDonald's, frequently considered to run one of the best supply chains in the world, outsources nearly all of their logistics to "white label" food distributors like those owned by Reyes Holdings [1][2], who then dispatch food in McDonalds's-branded trailers, but handle every aspect of distribution. [1] https://en.wikipedia.org/wiki/Reyes_Holdings https://en.wikipedia.org/wiki/Reyes_Holdings [2] http://martinbrower.com/our-story.html http://martinbrower.com/our-story.html
      - brudgers 8y ago
        Before I worked in precast I did a lot of temp industrial work. One of those assignments back in the late 1980's was in a Martin Brower warehouse for all the McDonald's in Florida plus the one in Guantanamo. Thirty years ago, they were incredibly organized and efficient. A lot of that efficiency came from 19th century technology: a rail spur where boxcars of french fries and pickles pulled up. Since they're still in business, I imagine that time has made them Moore's Law more efficient.
        kgwgk 8y ago
        TIL there is a McDonalds in Guantanamo.
- nugget 8y ago
  >Walmart's infrastructure can move upscale in the grocery market more easily than Amazon/WF's infrastructure can scale up for grocery sales. Can Walmart move their brand upscale? That may be more of a challenge than infrastructure. As purchase trends continue to shift, Walmart needs to effectively service low-income customers in-store and middle- and high-income customers online (and perhaps occasionally in-store for pickups). Their core brand needs to represent different things to different customer segments. Not easy to do, but I'm glad they are trying.
  - frockington 8y ago
    Even Amazon seems to be struggling with higher-end items now. I would never purchase a watch or anything else of value from Amazon anymore, but I'm pretty paranoid about counterfeit goods
    - strictnein 8y ago
      Yeah, I definitely limit my Amazon shopping to inexpensive goods. TVs, expensive electronics, computer components, etc are all purchased elsewhere.
    - richardhod 8y ago
      Counterfeit TVs? Surely it's mostly SD cards and easily -counterfeited things.
      - freeone3000 8y ago
        What makes a TV harder to counterfeit than an SD card? Buy a cheap panel, slap it together with subquality work, apply the brand name, sell sell sell. Or even simply rebrand.
        kbutler 8y ago
        Number of parts? Whether it is hard or not, have you seen instances of it being done? On Amazon or elsewhere?
- chiph 8y ago
  One of the things that I noticed in the grocery section of Walmart is that they have a smaller quantity of items on the shelf that will expire more quickly, such as ground beef. My guess is they know the sell rate of those items in that store, and are able to better predict how many will be sold in the next few days, to minimize spoilage. Not sure WF/Amazon has that skill, especially since Whole Food's margins have allowed for them to have a greater spoilage rate, while still having attractive displays of produce/meat.
Consultant32452 8y ago
>Does Amazon understand how to do cold warehouse storage and shipping of perishable goods? Amazon prime now has been going on for years. I've had them deliver refrigerated eggs to me before. It worked great. But to your point they don't yet offer fresh produce. Hopefully soon.
- Rebelgecko 8y ago
  It seems like they've been struggling with cold things a bit. I've been ordering the same gummy vitamins off of Amazon for years, but apparently they won't ship them to me until October due to the climate where I live (it's 65 degrees today which is actually less than than the average high temp in October) >You're subscribed to a heat-sensitive product that we're unable to ship during the summer. Your subscription for the following item has been placed on hold and will automatically resume shipping in October:
fullshark 8y ago
I don't perceive that at all, when Amazon acquired WF there were shockwaves sent through the grocery industry. Tons of grocery stocks lost % off their stock price, lots of ink spilled on how they were going to compete and what Amazon was going to do. It's just so far the only tangible difference we see is Amazon products for sale in WF, some prices are a little cheaper, and WF's bakery/prepared foods are a little worse. The grocery industry is definitely freaked out.

by yodon 8y ago

brudgers 8y ago

In 1992, I worked in a precast/prestressed concrete plant. One of the projects was a 500' fire wall for a Walmart distribution center near Brooksville, Florida. One side was dry goods, the other side was cold goods. There was 1000 linear feat of wall because it was double panel (as fire walls often are). That cold/perishable side was up and running 25 years ago. Before Walmart was even "in the grocery business". Of course before Amazon...Bezos hadn't even left Wall Street. The hype about Amazon and Whole Foods ignores the real logistical challenge of the grocery business at scale. Catching up with Walmart means delivering fresh food everywhere 24 hours a day, not just "in select markets during business hours." I'd put it this way, Walmart's infrastructure can move upscale in the grocery market more easily than Amazon/WF's infrastructure can scale up for grocery sales. A significant amount of Amazon's existing inventory sits as stock in a warehouse. Amazon is not nearly as driven by just in time contracts with suppliers as Walmart.

deleted 8y ago
[deleted]
irq-1 8y ago
Amazon could combine efficiencies in distribution scale with a marketplace for producers. Wallmart beats the suppliers down on price and quality, and only supplies their own stores. Amazon could supply many chain stores, profiting on the distribution/supply management, and also create a marketplace where suppliers sell to the chain stores, and profiting again on organizing the market.
- petra 8y ago
  If I'm not mistaken, many food companies have their own logistics. This is probably more efficient than adding Amazon. And I'm sure food companies won't be happy for Amazon to become part of their business unless it's necessary(I.e. Access to Amazon users).
  - niftich 8y ago
    Depends on the food company; and I'd say more of them outsource it than don't. McDonald's, frequently considered to run one of the best supply chains in the world, outsources nearly all of their logistics to "white label" food distributors like those owned by Reyes Holdings [1][2], who then dispatch food in McDonalds's-branded trailers, but handle every aspect of distribution. [1] https://en.wikipedia.org/wiki/Reyes_Holdings https://en.wikipedia.org/wiki/Reyes_Holdings [2] http://martinbrower.com/our-story.html http://martinbrower.com/our-story.html
    - brudgers 8y ago
      Before I worked in precast I did a lot of temp industrial work. One of those assignments back in the late 1980's was in a Martin Brower warehouse for all the McDonald's in Florida plus the one in Guantanamo. Thirty years ago, they were incredibly organized and efficient. A lot of that efficiency came from 19th century technology: a rail spur where boxcars of french fries and pickles pulled up. Since they're still in business, I imagine that time has made them Moore's Law more efficient.
      - kgwgk 8y ago
        TIL there is a McDonalds in Guantanamo.
nugget 8y ago
>Walmart's infrastructure can move upscale in the grocery market more easily than Amazon/WF's infrastructure can scale up for grocery sales. Can Walmart move their brand upscale? That may be more of a challenge than infrastructure. As purchase trends continue to shift, Walmart needs to effectively service low-income customers in-store and middle- and high-income customers online (and perhaps occasionally in-store for pickups). Their core brand needs to represent different things to different customer segments. Not easy to do, but I'm glad they are trying.
- frockington 8y ago
  Even Amazon seems to be struggling with higher-end items now. I would never purchase a watch or anything else of value from Amazon anymore, but I'm pretty paranoid about counterfeit goods
  - strictnein 8y ago
    Yeah, I definitely limit my Amazon shopping to inexpensive goods. TVs, expensive electronics, computer components, etc are all purchased elsewhere.
  - richardhod 8y ago
    Counterfeit TVs? Surely it's mostly SD cards and easily -counterfeited things.
    - freeone3000 8y ago
      What makes a TV harder to counterfeit than an SD card? Buy a cheap panel, slap it together with subquality work, apply the brand name, sell sell sell. Or even simply rebrand.
      - kbutler 8y ago
        Number of parts? Whether it is hard or not, have you seen instances of it being done? On Amazon or elsewhere?
chiph 8y ago
One of the things that I noticed in the grocery section of Walmart is that they have a smaller quantity of items on the shelf that will expire more quickly, such as ground beef. My guess is they know the sell rate of those items in that store, and are able to better predict how many will be sold in the next few days, to minimize spoilage. Not sure WF/Amazon has that skill, especially since Whole Food's margins have allowed for them to have a greater spoilage rate, while still having attractive displays of produce/meat.

Consultant32452 8y ago

>Does Amazon understand how to do cold warehouse storage and shipping of perishable goods? Amazon prime now has been going on for years. I've had them deliver refrigerated eggs to me before. It worked great. But to your point they don't yet offer fresh produce. Hopefully soon.

Rebelgecko 8y ago
It seems like they've been struggling with cold things a bit. I've been ordering the same gummy vitamins off of Amazon for years, but apparently they won't ship them to me until October due to the climate where I live (it's 65 degrees today which is actually less than than the average high temp in October) >You're subscribed to a heat-sensitive product that we're unable to ship during the summer. Your subscription for the following item has been placed on hold and will automatically resume shipping in October:

fullshark 8y ago

I don't perceive that at all, when Amazon acquired WF there were shockwaves sent through the grocery industry. Tons of grocery stocks lost % off their stock price, lots of ink spilled on how they were going to compete and what Amazon was going to do. It's just so far the only tangible difference we see is Amazon products for sale in WF, some prices are a little cheaper, and WF's bakery/prepared foods are a little worse. The grocery industry is definitely freaked out.