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It makes perfect sense, distilled down to "shift variable costs to suppliers while slowly extricating from the costly business of acquiring, storing, and shippi
by excitom 8y ago
It makes perfect sense, distilled down to "shift variable costs to suppliers while slowly extricating from the costly business of acquiring, storing, and shipping merchandise".
- toasterlovin 8y agoWhether a cost is variable or fixed doesn't really matter if it's either A) something you can do cheaper than competitors and, thus, an area of cost savings, or B) part of a profitable service offering (for items you're fulfilling for merchants). For the author's thesis to make sense, Amazon would have to be either worse at warehousing and logistics than other providers or they would have to be losing money on fulfilling for 3rd party sellers. Both of those seem exceedingly unlikely to me. The other reason none of this makes sense is that Amazon is moving aggressively into same and next day delivery. For that to work, they need scale. Having more products in their fulfillment network helps them achieve scale. It's not really possible for them to offer same day delivery on items that are fulfilled by merchants.