4 ms·

Wouldn't universal prosperity be Wal-Mart's worst nightmare? Or sustained high gas prices? Or Amazon?

Prrometheus 18y ago
If people became rich and the price-elasticity of demand dropped way off, then a business model based on squeezing every last bit of inefficiency from the supply chain and passing the savings onto consumers to gain market share would be in jeopardy. Sustained high gas prices? That'll push more people into its target demographic. It will increase shipping costs, but that's a problem for all Wal-Mart competitors, too. I don't know if Amazon has any plans to target the down-market niche. I am guessing that some things like clothing, food, and housewares most people will never buy online. Also, I don't know that it will ever be as efficient to ship to individual homes as it is to ship to large retail locations. So, I don't think Amazon will ever win out on price.
- lliiffee 18y ago
  > Also, I don't know that it will ever be as efficient to ship to individual homes as it is to ship to large retail locations. So, I don't think Amazon will ever win out on price. Maybe not, but that seems like the wrong comparison. The question is if it will ever be as efficient to ship to individual homes as it is to ship to large retail locations, plus have people get to those locations to pick up the goods.
  - Prrometheus 18y ago
    People seem to be accustomed to that, though. And they enjoy being able to look through various options for a particular good in person. And the store makes out when people buy things that they weren't planning on buying. And most folks tend to batch trips (my family would take a trip to Wal-Mart about twice a month and buy a lot).
    - Retric 18y ago
      Over the past 2 years most of my durable goods purchases where though Amazon. With amazon prime it's free 2 day shipping on most things which is fast enough that I don't really care. With a low base price, zero shipping costs, and no sales tax makes buying brand names online a lot cheaper and I don't need to drive anywhere so it saves me a lot of time. On top of all of that I can research stuff online so I don't have to worry about buying junk with a nice package. In the long run I think online shopping is going to win as long as shipping costs stay low enough. Delivery costs relate to the number of packages drooped off in the same area so they should drop as online delivery becomes more popular. Toss in all the people who use catalogs and I expect a significant portion of purchases don't require wondering though a physical store.
- aneesh 18y ago
  > "I am guessing that some things like clothing, food, and housewares most people will never buy online." Take food off that list. AmazonFresh delivers grocery to your home (sorry, Seattle area only for now). I've used this and am really happy with it.
  - qqq 18y ago
    I order my groceries from safeway, usually.
jbjohns 18y ago
Universal prosperity, I would say no. Just having large sums of money doesn't stop people from being greedy (i.e. wanting to spend absolutely as little as they possibly can).
- bonaldi 18y ago
  Universal prosperity just raises the prices across the board until some folks are "poor" again.
  - randallsquared 18y ago
    That's inflation. Actual prosperity raises the metric of "poor", instead. Today's poor in the US can all afford cars and big screen TVs (to a first approximation), but that doesn't mean they're not poor in comparison to others in the US.
    - bonaldi 18y ago
      It isn't inflation, though I think we agree -- what I'm saying is that universal prosperity is an unattainable notion: price inflation would necessarily follow any universal prosperity, until there once again was differential prosperity. Rich/Poor is always relative.
      - randallsquared 18y ago
        I'm not sure we do agree. :) I would say that there is a difference between an increase in the amount of money for the same actual wealth, and an increase in the wealth itself. One is inflation, and the other is growth. Growth can mean that everyone is rich by the standards of previous times in terms of how much of everything they can afford, which could be reflected in the prices for everything dropping. Universal prosperity in computing hardware, for example, has resulted in exactly the opposite of the price inflation you seem to expect.
- rw 18y ago
  Search for "inferior good".

If people became rich and the price-elasticity of demand dropped way off, then a business model based on squeezing every last bit of inefficiency from the supply chain and passing the savings onto consumers to gain market share would be in jeopardy. Sustained high gas prices? That'll push more people into its target demographic. It will increase shipping costs, but that's a problem for all Wal-Mart competitors, too. I don't know if Amazon has any plans to target the down-market niche. I am guessing that some things like clothing, food, and housewares most people will never buy online. Also, I don't know that it will ever be as efficient to ship to individual homes as it is to ship to large retail locations. So, I don't think Amazon will ever win out on price.

lliiffee 18y ago
> Also, I don't know that it will ever be as efficient to ship to individual homes as it is to ship to large retail locations. So, I don't think Amazon will ever win out on price. Maybe not, but that seems like the wrong comparison. The question is if it will ever be as efficient to ship to individual homes as it is to ship to large retail locations, plus have people get to those locations to pick up the goods.
- Prrometheus 18y ago
  People seem to be accustomed to that, though. And they enjoy being able to look through various options for a particular good in person. And the store makes out when people buy things that they weren't planning on buying. And most folks tend to batch trips (my family would take a trip to Wal-Mart about twice a month and buy a lot).
  - Retric 18y ago
    Over the past 2 years most of my durable goods purchases where though Amazon. With amazon prime it's free 2 day shipping on most things which is fast enough that I don't really care. With a low base price, zero shipping costs, and no sales tax makes buying brand names online a lot cheaper and I don't need to drive anywhere so it saves me a lot of time. On top of all of that I can research stuff online so I don't have to worry about buying junk with a nice package. In the long run I think online shopping is going to win as long as shipping costs stay low enough. Delivery costs relate to the number of packages drooped off in the same area so they should drop as online delivery becomes more popular. Toss in all the people who use catalogs and I expect a significant portion of purchases don't require wondering though a physical store.
aneesh 18y ago
> "I am guessing that some things like clothing, food, and housewares most people will never buy online." Take food off that list. AmazonFresh delivers grocery to your home (sorry, Seattle area only for now). I've used this and am really happy with it.
- qqq 18y ago
  I order my groceries from safeway, usually.

jbjohns 18y ago

Universal prosperity, I would say no. Just having large sums of money doesn't stop people from being greedy (i.e. wanting to spend absolutely as little as they possibly can).

bonaldi 18y ago
Universal prosperity just raises the prices across the board until some folks are "poor" again.
- randallsquared 18y ago
  That's inflation. Actual prosperity raises the metric of "poor", instead. Today's poor in the US can all afford cars and big screen TVs (to a first approximation), but that doesn't mean they're not poor in comparison to others in the US.
  - bonaldi 18y ago
    It isn't inflation, though I think we agree -- what I'm saying is that universal prosperity is an unattainable notion: price inflation would necessarily follow any universal prosperity, until there once again was differential prosperity. Rich/Poor is always relative.
    - randallsquared 18y ago
      I'm not sure we do agree. :) I would say that there is a difference between an increase in the amount of money for the same actual wealth, and an increase in the wealth itself. One is inflation, and the other is growth. Growth can mean that everyone is rich by the standards of previous times in terms of how much of everything they can afford, which could be reflected in the prices for everything dropping. Universal prosperity in computing hardware, for example, has resulted in exactly the opposite of the price inflation you seem to expect.
rw 18y ago
Search for "inferior good".