The ultimate in stupidity and wastefulness from Amazon.

[mrsilv04]

Last Friday, I ordered a small bag of Scotts lawn fertilizer through Amazon Prime. Weighed 12.5 pounds, to cover 5000 square feet.

When I ordered, it gave a delivery time of a week. OK, so they're sending it slow. No problem, it does weigh quite a bit, for what it costs ($17). A week is fine.

What showed up on my doorstep this morning, via UPS Next Day Air? A bag of Scotts fertilizer.

UPS's list shipping cost for that was $83.64. I do realize that Amazon isn't paying UPS's list prices for anything, but WOW. Especially so, when I had been warned that it could be a week for it to arrive.

 

[Rmay635703]

Your catching on
Amazon doesn’t make money on retail sales
100% of their profit comes from their Backbone infrastructure , a good chunk of which is rented to Uncle Sam .

After all the main competition is gone it will get interesting once the investors demand Prime either get spun off or make profits

 

[LazyDog]

They trying to keep the prime customer real happy, I do not pay for that and my stuff takes weeks for delivery.

 

[Al]

Well they went from a value of 6 billion to 225 Billion in 12 years.

 

[Rmay635703]

Well they went from a value of 6 billion to 225 Billion in 12 years.

Yep infrastructure is pretty valuable when you are guaranteed heavy profits so can loose cash on the retail.

Also helps that stock valuations have little to do with reality.

 

[AZjeff]

You'd be shocked if you knew what Amazon actually paid to ship that. I'll bet it wasn't more than $10. The company I worked for shipped product with a customer's account, they were a large medical fixture company but a fly speck compared to Amazon. Their rates were 25% of our business shipping rates.

 

[dareo]

Amazon's ground rates can be as low as $7-10 dollars for 50 lbs. but they probalby lost money/made mistake sending it that fast

 

[y_p_w]

Your catching on
Amazon doesn’t make money on retail sales
100% of their profit comes from their Backbone infrastructure , a good chunk of which is rented to Uncle Sam .

After all the main competition is gone it will get interesting once the investors demand Prime either get spun off or make profits

They make a ton of money working with Marketplace sellers. However, their biggest profit center is Amazon Web Services.

 

[SeaJay]

I wouldn't worry about how Amazon makes their money. Millions upon millions of mostly satisfied customers. We should all be so lucky as to develop a successful business like that.

 

[Dave Hess]

Yep.

Marketplace stores and AWS are very profitable.

 

[Barkleymut]

I have noticed recently that I can usually find a much better deal on most items on other retail websites.... for the record, I have made a small fortune (for me at least) in my IRA on AMZN stock. The model is awesome, it is so massive and popular that I see at least 10 Amazon trucks a day in my neighborhood of only 200 homes.

 

[y_p_w]

I wouldn't worry about how Amazon makes their money. Millions upon millions of mostly satisfied customers. We should all be so lucky as to develop a successful business like that.

I'm a fairly early Amazon customer. The first time I'd heard about it was on some mid-90s list of the best websites on earth. Back then Amazon was primarily a bookseller (and later branching into audio CDs). Their model was actually quite simple. They had no warehouse space and thus none of that overhead. They would place the order directly with the wholesaler or publisher, who would then ship direct to their customer. I had no idea what they would turn out to be in the future. Their business model was not about physically handling/storing the merchandise. It was an information services model. For some reason I remember one of their radio ads, which was of someone from Amazon.com calling up the Rose Bowl and asking if it could be rented out to store all the books that they would be selling. It seemed a bit odd since I thought at the time they were all about avoiding having to have any warehouses.

If anyone remembers the comic panel Bizarro (by Dan Pirraro), they had this one where it's a couple of Amazon tribesmen on a laptop computer looking up something, where one says "Looks like Amazon.com is already taken." I can't seem to find it though.

Eventually they went into selling far more merchandise hoping that establishing the customer base first was more important than turning a profit. Somehow Amazon.com managed to pull that off. There's a long line of companies that tried that and burned through all their cash in a hurry. Companies like Pets.com and Webvan. However, Amazon was probably not hemmoraghing money, although they might have been losing small amounts. Pets.com got burned because their free shipping on 50 lb bags of dog food was costing them far more than they were making on the sale. Amazon might have been losing pennies per sale, and back then they didn't have free shipping. One had to factor in both the cost of shipping and the savings on the products themselves.

 

[JT20]

I used to work at an Amazon "Sort Center." A trainer once told me: They make zero money off the sort center, since the product has already been bought. The Sort Center is the middle man.

Many, many USPS yes that is US Postal Service little packages there, they seem to have some kind of agreement.

They also have Fulfillment Centers.. In hindsight, that is the better place to work, Amazon has you work based on their business need which is dictated by the computer. Very 1984-ish.

Any company employs based on business need but Amazon is extremes and one of the favorite things people used to like to buy and have shipped is 6 packs of Essentia water. Things broken is a common occurence, since Amazon now is a lot like what UPS was just taking it on themself to do shipping, Amazon employees are more or less a part of the datastream and if you want to work physicall moving and yes throwing boxes (AB, CD, EF, GH/JK) then Amazon is the place for you.

 

[wemay]

Yep infrastructure is pretty valuable when you are guaranteed heavy profits so can loose cash on the retail.

Also helps that stock valuations have little to do with reality.

Until you sell your shares and get real money for it.

 

[meadows]

Remember all of those people that paid 100 bucks for that service. I would think that would be part of that.

 

[uc50ic4more]

They make a ton of money working with Marketplace sellers. However, their biggest profit center is Amazon Web Services.

+1: Amazon **owns** the cloud services market. They are, by a good margin, the biggest player.

 

[JT20]

+1: Amazon **owns** the cloud services market. They are, by a good margin, the biggest player.

Better than Apple, I would say, for sure. Apple used to rule the roost?

Now, with the resurgence of Netflix (which was almost dead honestly) Amazon is the most recognized and convenient game in town.

I still do not know anyone that actually uses Alexa but it's a lot like the feature on an XBox 360.

 

[y_p_w]

Better than Apple, I would say, for sure. Apple used to rule the roost?

Now, with the resurgence of Netflix (which was almost dead honestly) Amazon is the most recognized and convenient game in town.

I still do not know anyone that actually uses Alexa but it's a lot like the feature on an XBox 360.

I don't recall Apple being the biggest. The competitors to Amazon in cloud services are Microsoft, IBM, and Google.

 

[sloinker]

Even though they are playing catch up. I suspect that Walmart is going to have a heavy impact on Amazon's bottom line moving forward. For anyone buying tires, cost compare prices with Walmart and all other venues for price. Couple that further for mounting and installation costs and see where Amazon,DTD or even Tirerack can compete. Move this over to groceries or items you can wait two days for and Walmart already has the infrastructure needed to hand Amazon its head. This is from someone that doesn't use walmart unless forced to.

 

[JT20]

Even though they are playing catch up. I suspect that Walmart is going to have a heavy impact on Amazon's bottom line moving forward. For anyone buying tires, cost compare prices with Walmart and all other venues for price. Couple that further for mounting and installation costs and see where Amazon,DTD or even Tirerack can compete. Move this over to groceries or items you can wait two days for and Walmart already has the infrastructure needed to hand Amazon its head. This is from someone that doesn't use walmart unless forced to.

Very, very few Walmarts have tire centers although you can buy batteries at almost all.

And I need new tires on my car soon. Might just go to discounttiredirect.com or simpletire.com and book an appointment with whatever the cheapest installer is (Pep Boys) and can probably get all 4 tires on new for about $200 if I am not going with an ultra high-end tire for upcoming winter. But it ain't gonna be from Walmart, as, again, most of them don't do that.