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Amazon Prime is a good counter-example that delivery does not need to be subsidised as the pro rata delivery cost decreases if 1. more people order, or 2. peo
by Jakob 3y ago
Amazon Prime is a good counter-example that delivery does not need to be subsidised as the pro rata delivery cost decreases if
1. more people order, or
2. people order more items
Both, 1 and 2 can be influenced by marketing and delivery can become a revenue instead of a cost center.
Bonus points if that means that you can deliver from a cheap warehouse instead of an expensive supermarket.
- michaelt 3y agoPrime delivery is subsidised by the margin on the goods, how else would 'free delivery' get paid for?
- Jakob 3y agoDelivery cost increases logarithmically (one package more in the same truck) while revenue increases linearly when more people order / people order more. Increase in revenue outpaces delivery cost even for low margin items. Amazon makes more money with people on Prime, not less.