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Does it though? 1) The day Amazon feel threatened they can become the cheapest in the market quickly again. 2) Given purchasing power scale and people like fa

Does it though? 1) The day Amazon feel threatened they can become the cheapest in the market quickly again. 2) Given purchasing power scale and people like fast delivery there will only be a handful of companies that can complete with Amazon ever, so it seems unlikely there will be a 'started in the garage' business compete with them now the market is maturing. 3) With the extra profit Amazon are making vs a competitors they can develop and buy technologies or business to keep a moat around them for a long time. I'm not saying they are irreplaceable. I do feel there is an inertia there that will be difficult to overcome combined with Amazons ability to change course given Bezos complete rule makes a fall vastly less likely than continued dominance over the short to medium term.

toomuchtodo 8y ago
> The day Amazon feel threatened they can become the cheapest in the market quickly again. > Given purchasing power scale and people like fast delivery there will only be a handful of companies that can complete with Amazon ever, so it seems unlikely there will be a 'started in the garage' business compete with them now the market is maturing. I'd rather just walk into Target (same day pickup), Walmart (same day pickup), Best Buy (who price matches), B&H, Buy Buy Baby, Home Depot (same day pickup), Bed Bath & Beyond, or Kohls. I can't buy clothing online because I'm not willing for it to take a week to try something on, ship it back if it doesn't fit, get a different size in the mail, etc. The few bucks more at a physical store is worth it to have the size that fits today. I'm not willing to buy human consumables worried that they're counterfeit from an unscrupulous third party seller I will have no recourse against. I have to go to the Apple store for anything Apple related because I can't trust Amazon's reviews or their supply chain that what I'm receiving isn't a Chinese knock off that is out of spec. I buy SD cards and USB flash drives from Walmart because I don't trust I'll receive an authentic version from Amazon (having received many in the past that did not match advertised capacity). I won't even buy baby formula from Amazon; I buy direct from the manufacturer, and it takes 3-4 days to get to us (cheaper than worrying its counterfeit). The horror of having to wait an extra day or two and plan ahead! ashelmire's sibling comment hits the nail on the head: I do not trust Amazon anymore (without even touching on their labor practices). The UX is still great for me to track down products I might like or need and then go shop for them in person.
- jstarfish 8y ago
  > Buy Buy Baby Always hated the name of that store. It sounds like a euphemism for Planned Parenthood. > The UX is still great for me to track down products I might like or need and then go shop for them in person. What a hilarious inversion of the way things used to be.
  - toomuchtodo 8y ago
    I too am surprised by the irony! And low and behold, a lot of brick and mortar stores price match Amazon.
  - cynwoody 8y ago
    > Always hated the name of that store. It sounds like a euphemism for Planned Parenthood. Back in 1994, Bezos wanted to call his new company "Cadabra," as in the magic incantation "abracadabra," but he quickly had a fresh brainstorm when his lawyer misheard the name as "Cadaver." https://mashable.com/2011/07/22/facts-amazon-com/#QQ1l8PmD7qq2 https://mashable.com/2011/07/22/facts-amazon-com/#QQ1l8PmD7q...
- paulie_a 8y ago
  Hell depending on your location instacart is an option and get it an hour later from Target. There are a ton of delivery apps though.
ashelmire 8y ago
>1) The day Amazon feel threatened they can become the cheapest in the market quickly again. Can they? They aren't the ones selling those products, individual companies set their own prices - and they have to pay a cut to Amazon. Even if that cut goes to 0 (making Amazon lose lots of money), that only puts them at barely better than the rest of the market. Walmart sets its own prices. >2) Given purchasing power scale and people like fast delivery there will only be a handful of companies that can complete with Amazon ever, so it seems unlikely there will be a 'started in the garage' business compete with them now the market is maturing. I think this has been proven wrong time and again. There's always a way into the market. >3) With the extra profit Amazon are making vs a competitors they can develop and buy technologies or business to keep a moat around them for a long time. Just the same way every other company has maintained an iron grip on every market it's in...? History repeats itself, companies rise and fall, and they gain and lose market share even when they have an endless supply of money. The most important part of running a business like Amazon is consumer trust - and Amazon is playing a losing game right now.
- hrktb 8y ago
  They have a pretty aggressive policy of repricing in some markets. For instance in e-books, the most extreme cases, Amazon can straight give away a series' first volume to recoup on the sales on the following purchases. If I remember well in some cases the author or editor has no say on it and Amazon pays for the price difference. I wouldn't be surprised if they can do the same on other retail goods as long as they pay for it.
  - Kye 8y ago
    I knew Google did this with ebooks, but this is the first I've heard about Amazon doing it.
  - agret 8y ago
    Considering most eBooks with the free first book are like $0.99-$3 a book after you take out Amazons normal profit cut for the book they probably aren't really paying that much for the free book anyway so it makes it worth their while to do it this way.
daveFNbuck 8y ago
It wasn't just that Amazon was the cheapest in the market. It was that they built up a reputation over the years of being cheap and reliable. There was a long period where I would buy things from Amazon without considering other sources. That's gone now and they can't quickly get it back. Forget about price. I can't even trust that I'll be getting a legitimate product anymore. When possible, I prefer to buy from a more trusted retailer now. For many products I'm willing to pay a premium to know I'm not buying something potentially fake and dangerous. The only advantage Amazon has for me now is shipping and they've been fucking that up too. Their AMZL shipping service is garbage in my neighborhood. I've gotten lots of several packages reported as handed to resident, then when I contact customer service they reply that the delivery people decided not to deliver it and just marked it delivered anyway. These issues haven't stopped me from using Amazon yet, but they add up over time and it'll be extremely difficult to build that trust back once it reaches a point where I stop using Amazon entirely.
- TAForObvReasons 8y ago
  There's a saying about trust that's worth remembering anytime a decision is made that prioritizes KPI over all else: > Trust takes years to build, seconds to break, and forever to repair
- ajross 8y ago
  > There was a long period where I would buy things from Amazon without considering other sources. That's gone now and they can't quickly get it back. That's probably true, but the truth is that situation was an unstable equilibrium in the first place. There's absolutely no reason in a functioning market to expect (or want!) one provider to be the uniform best option at all things. Eventually everyone else starts competing. To wit: the situation over the past decade wasn't so much defined by Amazon being better (or "not evil", given the framing I'm saying here), it was that everyone else sucked. Now they don't suck so much, and Amazon is having to compete in ways (like profit!) they used to be able to ignore. That's a good thing, not a bad thing.
  - hef19898 8y ago
lechiffre10 8y ago
1) The day Amazon feel threatened they can become the cheapest in the market quickly again. The problem with that statement is that you assume customers will flock back. It might be true in the short term however when you lose customers specifically because of pricing and the monopoly behavior, clients aren't going to quickly forget this behavior. You really think people will come running back and allowing Amazon to do that knowing they did so in the past?
- jachee 8y ago
  Ever seen a Black Friday stampede? Price is king.
  - bsder 8y ago
    True. Except that consumer electronics companies like Frys now get low warranty, extra shitty, extra cheap models to suck the Black Friday morons in since they know those consumers won't buy anything else. I have, in fact, been warned at several stores (not just Frys) on the weekend afterward: "That's our Black Friday model. This model over here is nominally more expensive ($20-50 max), has the normal manufacturers warranty, and is a really good deal as it's 50-75% off our normal price anyway."
  - wool_gather 8y ago
    But a Black Friday stampede is not representative of a long-term stable customer base. Selling a crapload of stuff at a tiny margin doesn't say anything about your business's ability to make it to the next Black Friday.
    - jachee 8y ago
      My point is that—in the event they get significantly threatened—amazon has proven that they can run their entire retail business as a loss-leader until they re-establish a perception of price dominance.
- jstarfish 8y ago
  Consumer economic memory is limited in both capacity and duration; it only lasts about 8-12 months. After that they start to forget how you boned them and you can easily win them back with a deal on a shitty appliance. Everyone who boycotted Chick-Fil-A ended up eating there again (if they even remember why they stopped), nobody cares about Wells Fargo's transgressions anymore and even Equifax is slipping out of the popular consciousness. Keep the stock price afloat for 8-12 months and you can recover from anything.
adventured 8y ago
> so it seems unlikely there will be a 'started in the garage' business compete with them now the market is maturing. There never has been. You can't compete in high volume retail ecommerce from a low budget garage scenario. Since the mid 1990s it has required tens of millions of dollars in venture capital just to get into the first inning of the game if you want to compete at that style of mass retail ecommerce. It'd be like pretending you can compete with BMW, Ford, GM, Toyota, Tesla, etc. starting from a garage. There's a reason so few new car companies get started. Mass retail has horrendous margins and very high operational costs. If you get to choose, start a hotdog vendor business instead of going into low margin retail. Amazon itself required a million dollars to get started back in 1994. There are no garage businesses in that sort of ecommerce.
NegativeK 8y ago
As a sibling comment pointed out, cheapest doesn't trump everything -- otherwise we'd be ordering from Aliexpress. I've spend _way_ too much money on climbing gear in the past three years, very little of which was on Amazon. I simply can't risk getting counterfeit safety-critical goods. And while I'm not worried about counterfeit mops, I have noticed that the Amazon first habit is now broken in general.
- chabes 8y ago
  > I simply can't risk getting counterfeit safety-critical goods. That’s a good call. I usually buy direct from someone like Black Diamond when it comes to things like that. Also, like with most industries , it helps to have a friend with a pro deal, if you’re trying to save money on important stuff. I’ve found that AliExpress is good for cheap electronics that I don’t mind waiting for, but not much beyond that. I haven’t used the site in months (though, I haven’t used Amazon during the same time either)
  - ryanisnan 8y ago
    A word to the wise, the first rule about pro deals is that you don't talk about pro deals.
    - kryogen1c 8y ago
      Like Groucho Marx said, "I don't want to belong to any club that will have people like me as a member."
  - nkurz 8y ago
    I usually buy direct from someone like Black Diamond when it comes to things like that. Interesting example. Did you see the recent story about Black Diamond sending a cease-and-desist to Walmart demanding that they stop advertising their products: https://www.retaildive.com/news/black-diamond-demands-walmart-remove-gear-from-website/531298/ https://www.retaildive.com/news/black-diamond-demands-walmar...
  - linuxlizard 8y ago
naravara 8y ago
>1) The day Amazon feel threatened they can become the cheapest in the market quickly again. Only if they're being vigilant. Usually the threats to a company's business model come from places they don't expect, so by the time they feel squeezed it's already too late. Consider the examples of RIM and Microsoft. > 2.) Given purchasing power scale and people like fast delivery there will only be a handful of companies that can complete with Amazon ever, so it seems unlikely there will be a 'started in the garage' business compete with them now the market is maturing. Again, consider RIM and Microsoft. Apple + Google gobbled up much of their core markets. RIM just withered and Microsoft had to completely redo its business strategy. They're not the Borg anymore as a result. Amazon's big gains come from taking advantage of low-hanging fruit in technology. It's something most other retailers just didn't have the internal expertise to do. But the Wally Worlds and Targets of the world can catch up eventually. The first mover advantage only lasts for so long. At this point, the main thing that makes me go to Amazon is one-click ordering. But if things like Apple or Android Pay take off, that would kill much of the advantage Amazon has over other small retailers. I already don't really care for my Prime membership anymore. And there is always the possibility that our government wises up and starts enforcing anti-trust la. . .no never mind. That's just ridiculous.
- emodendroket 8y ago
  Call me unimaginative, but I find it unlikely that online retail can be supplanted by some completely different product the way that Blackberries could.
  - Drdrdrq 8y ago
    VR / AR? Or just a better business model that caters customers' needs better...
    - emodendroket 8y ago
      Well, I can only speak for myself, but every time I've used VR I've become nauseated, so I'd rather drive to the store if that's how shopping is done in the future.
Macha 8y ago
If Amazon's reputation for reliability falls low enough, sites like Aliexpress could break into new markets, and then there's no going back for Amazon. "Ordering from China" has a bit of a dodgy reputation (even if many Amazon sellers are the same companies), but if Amazon gets the same reputation, I'm not sure they can compete on price.
Judgmentality 8y ago
"It takes 20 years to build a reputation and 5 minutes to ruin it. If you think about that, you'll do things differently." -Warren Buffett
- TeMPOraL 8y ago
  Except people do, because they know that reputation matters little and even the biggest fiasco is forgotten under a year. Catchy quotes are nice, but need to be checked against the real world. See also: https://news.ycombinator.com/item?id=17961703 https://news.ycombinator.com/item?id=17961703.
  - Judgmentality 8y ago
    While I appreciate your point, I'm not so sure your generalization is any more valid than mine. Chipotle is a good example of a company that got slammed due to a reputation problem, and is still recovering from it years later. The jury's still out on Intel after spectre. Also I think the reason Equifax hasn't been hurt is largely because they do not depend directly on consumers for their business model. I think it is more than just my small circle of friends that would like nothing more than to see them die.
Alupis 8y ago
> 1) The day Amazon feel threatened they can become the cheapest in the market quickly again. I don't think that's necessarily true. Majority of products sold on Amazon are sold by 3rd parties. Amazon's commission fee structure, and seller-eats-return-shipping-by-default is to blame for prices going up on many items... Competition among sellers is fierce on Amazon - and historically was a race to the bottom, chasing sometimes $0.10 profits after paying for shipping materials, shipping fees, labor in warehouses to fulfill orders - or paying FBA fees which are often higher but gets a sales boost by Amazon for the privilege... Amazon keeps raising commission rates, FBA fees, sticking sellers with return shipping label fees, commission minimums, etc. It all adds up to an unprofitable proposition - or you must raise prices to compensate. So, that's what has been done... making Amazon more expensive in general for almost everything. Sure, Amazon could cut their fees tomorrow - but it will take time to work itself out into lower prices for consumers... especially since people are unlikely to trust Amazon's fee-holiday longevity. Amazon tends to change things at will with minimal notice. Do yourself, and small businesses alike, a favor - find something you want to buy on Amazon - then search the seller name on your favorite search engine. You might be pleasantly surprised with the free discount you receive by purchasing directly from the vendor's website than through Amazon + all the fees.
- j-c-hewitt 8y ago
  They could reduce fees and cut ad prices. That does have a big impact. They can also offer better deals to brands. They tend to offer really crap deals to brands on the vendor side, but they could easily just give them more margin.
  - Alupis 8y ago
    If you're referring to Vendor Central, I've no idea since we've not participated in that yet. Cutting fees and slashing ad prices would be a start - but it would take a while before people trust it. We got into FBA heavily because it dramatically boosted sales... even on products we co-listed FBM on (nuts, you pay more to fulfill it via Amazon's network, but they boost your sales, so it washed out). Recently, they've been increasing FBA fees to where it's finally at the point we're re-examining it's profitability and possibly moving back to FBM for 100% of our items. But... not everyone has the luxury of having their own warehouse and fulfillment infrastructure - a lot of Amazon sellers are vested 100% into FBA and are at Amazon's mercy with fees.
emodendroket 8y ago
I guess the problem is, if I want, for instance, electronics, I know several retailers I can go to (some with specialties narrower than that). But for a lot of products, where else am I even going to look?
Spooky23 8y ago
I don't think that Wall St would accept Amazon going back to the money losing days -- they would pay a high price. You're starting to see competitors react effectively. WalMart is investing alot on the pickup strategy. Target has upped their game with small box shipments from stores. We stopped almost all purchasing that we did at amazon for household goods -- in many cases Target is providing next day delivery via USPS from a local store. From my POV, I have a growing list of items that I cannot buy from Amazon. Electronics are fake, perishables are usually near the sell by date, household stuff like soaps and kitchen consumables are 30% more expensive, etc. The magic of amazon was that it was simple. No longer.
- LinuxBender 8y ago
  Sometimes people don't even realize when they got items that were not what they ordered. One two occasions, I ordered Nvidia cards that are overclocked. Both of them were swapped out with stock speed cards. People would not notice this unless they looked at the nvidia control panel and clicked system settings and looked at the clock speed.
jacquesm 8y ago
Re. your 1), yes, they can but they will have burned their brand in the eyes of what was until that point a loyal segment of their customerbase and once you lose them they do not come back that easily. It takes less effort to convince a new user to join and start using your products and services than it takes to convince someone that has left because they were unhappy.
__jal 8y ago
No, the issue they should care about is that I'm losing trust in them, for a number of reasons, and (anecdatally) I'm not the only one. - Are they taking me for a ride on price? I don't optimize this enough and do overpay because I'm lazy, but there have been multiple times lately that they gave me a price that was just stupidly high. - Is this the kind of product that will cause their screwed-up warehousing system to stiff me with counterfeit goods/seconds? No way in hell am I going to put up with that kind of shitty bait-and-switch, and this cuts out a huge swath of categories I'll consider from them. - Did I find all the places on the page where they hide alternate (cheaper) sellers in their own store? And this is also after I mostly stopped using their incredibly loosely-matching search and just use DDG, which works much better. At a certain point, I find the friction of keeping them honest is not worth it. Last renewal time, Prime was still worth it. When it is up for renewal I'm cancelling to see if I miss it.
- adameast9000 8y ago
  Somewhat related, there's a chrome extension called honey that will compare the final price (incl. tax) of all sellers for a product listing and add the best one to your cart. I've saved tons of money in some situations where an alternate seller had no taxes, was cheaper but longer shipping, etc... It's still frustrating the lengths I have to go to to get a fair deal on Amazon. there's so much anticompetitive behavior (showing their own products first on searches, defaulting to products sold by amazon, hiding competitor listings [search for chromecast]) and they show little interest at changing behavior to make the customer experience better (even on glaring issues like fake reviews / counterfeit products) because there is no competition. I have contributed, been suckered in to the 'Prime' bandwagon, rarely shopping around on price, and often buying 'Amazon's Choice' products, which are almost certainly a sham. Refreshing to see people on here bucking that trend. I'm trying to commit to the same, hopefully Amazon one day feels pressure to change.
  - DesiLurker 8y ago
    while I applaud comparison shopping, My regular PSA is any extension you put in browser has a clear-text view of your content on ALL websites. Be careful with these extensions, especially the closed source ones!
gonational 8y ago
1) When profit margins increase efficiencies decline. While their profit margins were low, you can imagine they spent a lot of time optimizing processes to remain solvent. This is an ongoing process, and when profit margins go up these kinds of processes are often neglected. 2) This is true, but where Amazon excels in market efficiency for the general case, they lack in supporting niches; especially high priced niches. For instance, I just purchased a $2600 (+$30 2-day shipping) lens from B&H photo, despite the fact that I have a Prime account, and the price on Amazon was the same. This is because, while I still trust Amazon for smaller purchases, I no longer trust them for expensive niche products like camera gear or computers, since their supply chain is out of control (Chinese knock-offs, etc.). 3) Sure they’ve made a few billion dollars in profit, but their opex is enormous. Compare this to Apple, who’s cash and equivalence is enough to run without sales for a decade. Given a downturn in the economy and a pullback in consumer spending (not to mention a drop in AWS revenue), Amazon could get into financial trouble pretty quickly.
cliffordthedog 8y ago
Which is why the solution is government intervention.
peteretep 8y ago
> 1) The day Amazon feel threatened they can become the cheapest in the market quickly again. No. Amazon had built up trust. Trust that they were the cheapest place to look, and trust that they were ultra-reliable. Trust that their reviews were trustworthy. The longer that's untrue for, the more the brand is becoming irreparably damaged. It seems mind-blowingly stupid. Three years ago, I would purchase absolutely anything I could from Amazon. Clothes, for example. There's a brand of jeans I like, I know the size and style I like, and I used to always just go to Amazon. These days I spend my money on Zalando because I don't want fakes, and I know that Zalando will make sure I get genuine items each time. I bought a suitcase a little while ago. Wrong item was sent. Because of whatever agreement Amazon has with the third-party who sold it to me, I couldn't easily generate an immediate refund like I used to be able to do. Amazon have probably lost around $3-4,000 of easy revenue from me this year, so far. The whole thing feels like a massive own-goal.
sam_goody 8y ago
Maybe not someone in a garage, but Alibaba and Tenecent are coming up behind them, and once they set up fulfillment centers in the States (to solve the fast shipping), Amazon may lose a lot of ground very quickly. Also ebay and Walmart are hardly unknown, and as people get more fed up with the fakes on Amazon, they know where to look. Incidentally, I kinda prefer to shop at Alibaba where I know it will be fake then on Amazon or Walmart where I can fall into the trip of thinking it is real (because it might be...).
kajmagnusmobile 8y ago
Maybe Amazon won't ever be replaced or "obsoleted" by something similar to Amazon, but rather by sth like 3d printers, I mean sth completely different

toomuchtodo 8y ago

> The day Amazon feel threatened they can become the cheapest in the market quickly again. > Given purchasing power scale and people like fast delivery there will only be a handful of companies that can complete with Amazon ever, so it seems unlikely there will be a 'started in the garage' business compete with them now the market is maturing. I'd rather just walk into Target (same day pickup), Walmart (same day pickup), Best Buy (who price matches), B&H, Buy Buy Baby, Home Depot (same day pickup), Bed Bath & Beyond, or Kohls. I can't buy clothing online because I'm not willing for it to take a week to try something on, ship it back if it doesn't fit, get a different size in the mail, etc. The few bucks more at a physical store is worth it to have the size that fits today. I'm not willing to buy human consumables worried that they're counterfeit from an unscrupulous third party seller I will have no recourse against. I have to go to the Apple store for anything Apple related because I can't trust Amazon's reviews or their supply chain that what I'm receiving isn't a Chinese knock off that is out of spec. I buy SD cards and USB flash drives from Walmart because I don't trust I'll receive an authentic version from Amazon (having received many in the past that did not match advertised capacity). I won't even buy baby formula from Amazon; I buy direct from the manufacturer, and it takes 3-4 days to get to us (cheaper than worrying its counterfeit). The horror of having to wait an extra day or two and plan ahead! ashelmire's sibling comment hits the nail on the head: I do not trust Amazon anymore (without even touching on their labor practices). The UX is still great for me to track down products I might like or need and then go shop for them in person.

jstarfish 8y ago
> Buy Buy Baby Always hated the name of that store. It sounds like a euphemism for Planned Parenthood. > The UX is still great for me to track down products I might like or need and then go shop for them in person. What a hilarious inversion of the way things used to be.
- toomuchtodo 8y ago
  I too am surprised by the irony! And low and behold, a lot of brick and mortar stores price match Amazon.
- cynwoody 8y ago
  > Always hated the name of that store. It sounds like a euphemism for Planned Parenthood. Back in 1994, Bezos wanted to call his new company "Cadabra," as in the magic incantation "abracadabra," but he quickly had a fresh brainstorm when his lawyer misheard the name as "Cadaver." https://mashable.com/2011/07/22/facts-amazon-com/#QQ1l8PmD7qq2 https://mashable.com/2011/07/22/facts-amazon-com/#QQ1l8PmD7q...
paulie_a 8y ago
Hell depending on your location instacart is an option and get it an hour later from Target. There are a ton of delivery apps though.

ashelmire 8y ago

>1) The day Amazon feel threatened they can become the cheapest in the market quickly again. Can they? They aren't the ones selling those products, individual companies set their own prices - and they have to pay a cut to Amazon. Even if that cut goes to 0 (making Amazon lose lots of money), that only puts them at barely better than the rest of the market. Walmart sets its own prices. >2) Given purchasing power scale and people like fast delivery there will only be a handful of companies that can complete with Amazon ever, so it seems unlikely there will be a 'started in the garage' business compete with them now the market is maturing. I think this has been proven wrong time and again. There's always a way into the market. >3) With the extra profit Amazon are making vs a competitors they can develop and buy technologies or business to keep a moat around them for a long time. Just the same way every other company has maintained an iron grip on every market it's in...? History repeats itself, companies rise and fall, and they gain and lose market share even when they have an endless supply of money. The most important part of running a business like Amazon is consumer trust - and Amazon is playing a losing game right now.

hrktb 8y ago
They have a pretty aggressive policy of repricing in some markets. For instance in e-books, the most extreme cases, Amazon can straight give away a series' first volume to recoup on the sales on the following purchases. If I remember well in some cases the author or editor has no say on it and Amazon pays for the price difference. I wouldn't be surprised if they can do the same on other retail goods as long as they pay for it.
- Kye 8y ago
  I knew Google did this with ebooks, but this is the first I've heard about Amazon doing it.
- agret 8y ago
  Considering most eBooks with the free first book are like $0.99-$3 a book after you take out Amazons normal profit cut for the book they probably aren't really paying that much for the free book anyway so it makes it worth their while to do it this way.

daveFNbuck 8y ago

It wasn't just that Amazon was the cheapest in the market. It was that they built up a reputation over the years of being cheap and reliable. There was a long period where I would buy things from Amazon without considering other sources. That's gone now and they can't quickly get it back. Forget about price. I can't even trust that I'll be getting a legitimate product anymore. When possible, I prefer to buy from a more trusted retailer now. For many products I'm willing to pay a premium to know I'm not buying something potentially fake and dangerous. The only advantage Amazon has for me now is shipping and they've been fucking that up too. Their AMZL shipping service is garbage in my neighborhood. I've gotten lots of several packages reported as handed to resident, then when I contact customer service they reply that the delivery people decided not to deliver it and just marked it delivered anyway. These issues haven't stopped me from using Amazon yet, but they add up over time and it'll be extremely difficult to build that trust back once it reaches a point where I stop using Amazon entirely.

TAForObvReasons 8y ago
There's a saying about trust that's worth remembering anytime a decision is made that prioritizes KPI over all else: > Trust takes years to build, seconds to break, and forever to repair
ajross 8y ago
> There was a long period where I would buy things from Amazon without considering other sources. That's gone now and they can't quickly get it back. That's probably true, but the truth is that situation was an unstable equilibrium in the first place. There's absolutely no reason in a functioning market to expect (or want!) one provider to be the uniform best option at all things. Eventually everyone else starts competing. To wit: the situation over the past decade wasn't so much defined by Amazon being better (or "not evil", given the framing I'm saying here), it was that everyone else sucked. Now they don't suck so much, and Amazon is having to compete in ways (like profit!) they used to be able to ignore. That's a good thing, not a bad thing.
- hef19898 8y ago

lechiffre10 8y ago

1) The day Amazon feel threatened they can become the cheapest in the market quickly again. The problem with that statement is that you assume customers will flock back. It might be true in the short term however when you lose customers specifically because of pricing and the monopoly behavior, clients aren't going to quickly forget this behavior. You really think people will come running back and allowing Amazon to do that knowing they did so in the past?

jachee 8y ago
Ever seen a Black Friday stampede? Price is king.
- bsder 8y ago
  True. Except that consumer electronics companies like Frys now get low warranty, extra shitty, extra cheap models to suck the Black Friday morons in since they know those consumers won't buy anything else. I have, in fact, been warned at several stores (not just Frys) on the weekend afterward: "That's our Black Friday model. This model over here is nominally more expensive ($20-50 max), has the normal manufacturers warranty, and is a really good deal as it's 50-75% off our normal price anyway."
- wool_gather 8y ago
  But a Black Friday stampede is not representative of a long-term stable customer base. Selling a crapload of stuff at a tiny margin doesn't say anything about your business's ability to make it to the next Black Friday.
  - jachee 8y ago
    My point is that—in the event they get significantly threatened—amazon has proven that they can run their entire retail business as a loss-leader until they re-establish a perception of price dominance.
jstarfish 8y ago
Consumer economic memory is limited in both capacity and duration; it only lasts about 8-12 months. After that they start to forget how you boned them and you can easily win them back with a deal on a shitty appliance. Everyone who boycotted Chick-Fil-A ended up eating there again (if they even remember why they stopped), nobody cares about Wells Fargo's transgressions anymore and even Equifax is slipping out of the popular consciousness. Keep the stock price afloat for 8-12 months and you can recover from anything.

adventured 8y ago

> so it seems unlikely there will be a 'started in the garage' business compete with them now the market is maturing. There never has been. You can't compete in high volume retail ecommerce from a low budget garage scenario. Since the mid 1990s it has required tens of millions of dollars in venture capital just to get into the first inning of the game if you want to compete at that style of mass retail ecommerce. It'd be like pretending you can compete with BMW, Ford, GM, Toyota, Tesla, etc. starting from a garage. There's a reason so few new car companies get started. Mass retail has horrendous margins and very high operational costs. If you get to choose, start a hotdog vendor business instead of going into low margin retail. Amazon itself required a million dollars to get started back in 1994. There are no garage businesses in that sort of ecommerce.

NegativeK 8y ago

As a sibling comment pointed out, cheapest doesn't trump everything -- otherwise we'd be ordering from Aliexpress. I've spend _way_ too much money on climbing gear in the past three years, very little of which was on Amazon. I simply can't risk getting counterfeit safety-critical goods. And while I'm not worried about counterfeit mops, I have noticed that the Amazon first habit is now broken in general.

chabes 8y ago
> I simply can't risk getting counterfeit safety-critical goods. That’s a good call. I usually buy direct from someone like Black Diamond when it comes to things like that. Also, like with most industries , it helps to have a friend with a pro deal, if you’re trying to save money on important stuff. I’ve found that AliExpress is good for cheap electronics that I don’t mind waiting for, but not much beyond that. I haven’t used the site in months (though, I haven’t used Amazon during the same time either)
- ryanisnan 8y ago
  A word to the wise, the first rule about pro deals is that you don't talk about pro deals.
  - kryogen1c 8y ago
    Like Groucho Marx said, "I don't want to belong to any club that will have people like me as a member."
- nkurz 8y ago
  I usually buy direct from someone like Black Diamond when it comes to things like that. Interesting example. Did you see the recent story about Black Diamond sending a cease-and-desist to Walmart demanding that they stop advertising their products: https://www.retaildive.com/news/black-diamond-demands-walmart-remove-gear-from-website/531298/ https://www.retaildive.com/news/black-diamond-demands-walmar...
- linuxlizard 8y ago

naravara 8y ago

>1) The day Amazon feel threatened they can become the cheapest in the market quickly again. Only if they're being vigilant. Usually the threats to a company's business model come from places they don't expect, so by the time they feel squeezed it's already too late. Consider the examples of RIM and Microsoft. > 2.) Given purchasing power scale and people like fast delivery there will only be a handful of companies that can complete with Amazon ever, so it seems unlikely there will be a 'started in the garage' business compete with them now the market is maturing. Again, consider RIM and Microsoft. Apple + Google gobbled up much of their core markets. RIM just withered and Microsoft had to completely redo its business strategy. They're not the Borg anymore as a result. Amazon's big gains come from taking advantage of low-hanging fruit in technology. It's something most other retailers just didn't have the internal expertise to do. But the Wally Worlds and Targets of the world can catch up eventually. The first mover advantage only lasts for so long. At this point, the main thing that makes me go to Amazon is one-click ordering. But if things like Apple or Android Pay take off, that would kill much of the advantage Amazon has over other small retailers. I already don't really care for my Prime membership anymore. And there is always the possibility that our government wises up and starts enforcing anti-trust la. . .no never mind. That's just ridiculous.

emodendroket 8y ago
Call me unimaginative, but I find it unlikely that online retail can be supplanted by some completely different product the way that Blackberries could.
- Drdrdrq 8y ago
  VR / AR? Or just a better business model that caters customers' needs better...
  - emodendroket 8y ago
    Well, I can only speak for myself, but every time I've used VR I've become nauseated, so I'd rather drive to the store if that's how shopping is done in the future.

Macha 8y ago

If Amazon's reputation for reliability falls low enough, sites like Aliexpress could break into new markets, and then there's no going back for Amazon. "Ordering from China" has a bit of a dodgy reputation (even if many Amazon sellers are the same companies), but if Amazon gets the same reputation, I'm not sure they can compete on price.

Judgmentality 8y ago

"It takes 20 years to build a reputation and 5 minutes to ruin it. If you think about that, you'll do things differently." -Warren Buffett

TeMPOraL 8y ago
Except people do, because they know that reputation matters little and even the biggest fiasco is forgotten under a year. Catchy quotes are nice, but need to be checked against the real world. See also: https://news.ycombinator.com/item?id=17961703 https://news.ycombinator.com/item?id=17961703.
- Judgmentality 8y ago
  While I appreciate your point, I'm not so sure your generalization is any more valid than mine. Chipotle is a good example of a company that got slammed due to a reputation problem, and is still recovering from it years later. The jury's still out on Intel after spectre. Also I think the reason Equifax hasn't been hurt is largely because they do not depend directly on consumers for their business model. I think it is more than just my small circle of friends that would like nothing more than to see them die.

Alupis 8y ago

> 1) The day Amazon feel threatened they can become the cheapest in the market quickly again. I don't think that's necessarily true. Majority of products sold on Amazon are sold by 3rd parties. Amazon's commission fee structure, and seller-eats-return-shipping-by-default is to blame for prices going up on many items... Competition among sellers is fierce on Amazon - and historically was a race to the bottom, chasing sometimes $0.10 profits after paying for shipping materials, shipping fees, labor in warehouses to fulfill orders - or paying FBA fees which are often higher but gets a sales boost by Amazon for the privilege... Amazon keeps raising commission rates, FBA fees, sticking sellers with return shipping label fees, commission minimums, etc. It all adds up to an unprofitable proposition - or you must raise prices to compensate. So, that's what has been done... making Amazon more expensive in general for almost everything. Sure, Amazon could cut their fees tomorrow - but it will take time to work itself out into lower prices for consumers... especially since people are unlikely to trust Amazon's fee-holiday longevity. Amazon tends to change things at will with minimal notice. Do yourself, and small businesses alike, a favor - find something you want to buy on Amazon - then search the seller name on your favorite search engine. You might be pleasantly surprised with the free discount you receive by purchasing directly from the vendor's website than through Amazon + all the fees.

j-c-hewitt 8y ago
They could reduce fees and cut ad prices. That does have a big impact. They can also offer better deals to brands. They tend to offer really crap deals to brands on the vendor side, but they could easily just give them more margin.
- Alupis 8y ago
  If you're referring to Vendor Central, I've no idea since we've not participated in that yet. Cutting fees and slashing ad prices would be a start - but it would take a while before people trust it. We got into FBA heavily because it dramatically boosted sales... even on products we co-listed FBM on (nuts, you pay more to fulfill it via Amazon's network, but they boost your sales, so it washed out). Recently, they've been increasing FBA fees to where it's finally at the point we're re-examining it's profitability and possibly moving back to FBM for 100% of our items. But... not everyone has the luxury of having their own warehouse and fulfillment infrastructure - a lot of Amazon sellers are vested 100% into FBA and are at Amazon's mercy with fees.

emodendroket 8y ago

I guess the problem is, if I want, for instance, electronics, I know several retailers I can go to (some with specialties narrower than that). But for a lot of products, where else am I even going to look?

Spooky23 8y ago

I don't think that Wall St would accept Amazon going back to the money losing days -- they would pay a high price. You're starting to see competitors react effectively. WalMart is investing alot on the pickup strategy. Target has upped their game with small box shipments from stores. We stopped almost all purchasing that we did at amazon for household goods -- in many cases Target is providing next day delivery via USPS from a local store. From my POV, I have a growing list of items that I cannot buy from Amazon. Electronics are fake, perishables are usually near the sell by date, household stuff like soaps and kitchen consumables are 30% more expensive, etc. The magic of amazon was that it was simple. No longer.

LinuxBender 8y ago
Sometimes people don't even realize when they got items that were not what they ordered. One two occasions, I ordered Nvidia cards that are overclocked. Both of them were swapped out with stock speed cards. People would not notice this unless they looked at the nvidia control panel and clicked system settings and looked at the clock speed.

jacquesm 8y ago

Re. your 1), yes, they can but they will have burned their brand in the eyes of what was until that point a loyal segment of their customerbase and once you lose them they do not come back that easily. It takes less effort to convince a new user to join and start using your products and services than it takes to convince someone that has left because they were unhappy.

__jal 8y ago

No, the issue they should care about is that I'm losing trust in them, for a number of reasons, and (anecdatally) I'm not the only one. - Are they taking me for a ride on price? I don't optimize this enough and do overpay because I'm lazy, but there have been multiple times lately that they gave me a price that was just stupidly high. - Is this the kind of product that will cause their screwed-up warehousing system to stiff me with counterfeit goods/seconds? No way in hell am I going to put up with that kind of shitty bait-and-switch, and this cuts out a huge swath of categories I'll consider from them. - Did I find all the places on the page where they hide alternate (cheaper) sellers in their own store? And this is also after I mostly stopped using their incredibly loosely-matching search and just use DDG, which works much better. At a certain point, I find the friction of keeping them honest is not worth it. Last renewal time, Prime was still worth it. When it is up for renewal I'm cancelling to see if I miss it.

adameast9000 8y ago
Somewhat related, there's a chrome extension called honey that will compare the final price (incl. tax) of all sellers for a product listing and add the best one to your cart. I've saved tons of money in some situations where an alternate seller had no taxes, was cheaper but longer shipping, etc... It's still frustrating the lengths I have to go to to get a fair deal on Amazon. there's so much anticompetitive behavior (showing their own products first on searches, defaulting to products sold by amazon, hiding competitor listings [search for chromecast]) and they show little interest at changing behavior to make the customer experience better (even on glaring issues like fake reviews / counterfeit products) because there is no competition. I have contributed, been suckered in to the 'Prime' bandwagon, rarely shopping around on price, and often buying 'Amazon's Choice' products, which are almost certainly a sham. Refreshing to see people on here bucking that trend. I'm trying to commit to the same, hopefully Amazon one day feels pressure to change.
- DesiLurker 8y ago
  while I applaud comparison shopping, My regular PSA is any extension you put in browser has a clear-text view of your content on ALL websites. Be careful with these extensions, especially the closed source ones!

gonational 8y ago

1) When profit margins increase efficiencies decline. While their profit margins were low, you can imagine they spent a lot of time optimizing processes to remain solvent. This is an ongoing process, and when profit margins go up these kinds of processes are often neglected. 2) This is true, but where Amazon excels in market efficiency for the general case, they lack in supporting niches; especially high priced niches. For instance, I just purchased a $2600 (+$30 2-day shipping) lens from B&H photo, despite the fact that I have a Prime account, and the price on Amazon was the same. This is because, while I still trust Amazon for smaller purchases, I no longer trust them for expensive niche products like camera gear or computers, since their supply chain is out of control (Chinese knock-offs, etc.). 3) Sure they’ve made a few billion dollars in profit, but their opex is enormous. Compare this to Apple, who’s cash and equivalence is enough to run without sales for a decade. Given a downturn in the economy and a pullback in consumer spending (not to mention a drop in AWS revenue), Amazon could get into financial trouble pretty quickly.

cliffordthedog 8y ago

Which is why the solution is government intervention.

peteretep 8y ago

> 1) The day Amazon feel threatened they can become the cheapest in the market quickly again. No. Amazon had built up trust. Trust that they were the cheapest place to look, and trust that they were ultra-reliable. Trust that their reviews were trustworthy. The longer that's untrue for, the more the brand is becoming irreparably damaged. It seems mind-blowingly stupid. Three years ago, I would purchase absolutely anything I could from Amazon. Clothes, for example. There's a brand of jeans I like, I know the size and style I like, and I used to always just go to Amazon. These days I spend my money on Zalando because I don't want fakes, and I know that Zalando will make sure I get genuine items each time. I bought a suitcase a little while ago. Wrong item was sent. Because of whatever agreement Amazon has with the third-party who sold it to me, I couldn't easily generate an immediate refund like I used to be able to do. Amazon have probably lost around $3-4,000 of easy revenue from me this year, so far. The whole thing feels like a massive own-goal.

sam_goody 8y ago

Maybe not someone in a garage, but Alibaba and Tenecent are coming up behind them, and once they set up fulfillment centers in the States (to solve the fast shipping), Amazon may lose a lot of ground very quickly. Also ebay and Walmart are hardly unknown, and as people get more fed up with the fakes on Amazon, they know where to look. Incidentally, I kinda prefer to shop at Alibaba where I know it will be fake then on Amazon or Walmart where I can fall into the trip of thinking it is real (because it might be...).

kajmagnusmobile 8y ago

Maybe Amazon won't ever be replaced or "obsoleted" by something similar to Amazon, but rather by sth like 3d printers, I mean sth completely different