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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 suppl

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.

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.