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>Amazon is clearly doing something very useful with its warehouses and delivery. This is all about getting stuff to people whenever they want it. >How much thi
by jay_kyburz 6y ago
>Amazon is clearly doing something very useful with its warehouses and delivery. This is all about getting stuff to people whenever they want it.
>How much this is really worth is unclear.
We can let the market tell us how much its worth. We can look at how much people are willing to pay for it.
How much extra is a customer willing to pay to have it shipped from amazon than go pick it up in a store?
How much cheaper is a seller willing to sell a product to have it on amazons store?
- skybrian 6y agoDifferent people will pay different amounts. Doing demand management like the airlines do will get closer to what people will pay. Fortunately as consumers, we often don't have to pay as much as we'd be willing to pay, so the price is an underestimate of consumer value. But then again, it's easy for companies to confuse the issue. How can you tell what people would be willing to pay for shipping when they are using Amazon Prime and have "free" shipping? They themselves might not know if they're getting a good deal or not. Seeing the market reaction isn't nothing, but it doesn't tell you what would have happened if you did something different. Startup often have trouble picking a price and may never know if they did it right.