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06 February 2011

Amazon Prime

I've been meaning to write about this for a while now. Amazon is an interesting beast to me; they didn't turn a profit for the first few years like so many dot coms, their website is very confusing and Yahoo like (see: the antithesis of Google), but at the same time they're undercover innovators.

Case in point - Amazon did some research and found that for every extra 0.1 seconds longer it took for a webpage to load their revenue went down by 1%. It makes a difference when, if I'm reading this right, you gross about $36 billion a year. They also have the Kindle which, in its current incarnation, is the first serious challenger to print. I really do mean that.

Now, what I really want to talk about - Amazon Prime. For $79 per year (about $6.50 a month) you can get free 2 day shipping on any purchase or pay $4 for overnight delivery. At first I balked at the notion, but they offer a free 1 year trial, so I figured why not? In a short period of time it changed the way I went about purchasing everyday items. So what? I now buy things from Amazon that I never would have before. Why go down the street and pay tax (over 10% in Chicago) to get one or two things when I can order it with a much greater ease, far larger selection, better price, has reviews, and get it the day after the next for essentially free? Amazon is taking market share from physical stores. They're essentially eroding barriers to online purchases. Less wait = more purchases.

Every dollar Amazon gets from a customer is another dollar Walmart and Walgreens isn't getting. Dollars are votes.

So why this photo?

I was a little confused when this over-sized box that held a single small item showed up in the mail room. It seems like such a waste, but the real waste is a brick and mortar store with lots of lights, heating and cooling, maintenance, people who work there full time, cash registers, shopping bags, the parking lots that serve them, you owning a car so you can get there, the larger urban spaces that are needed to house all this stuff, etcetera. When I walk around Chicago and see all the empty storefronts I wonder if it's due to the current economic situation or if it's an actual shift in the way we purchase goods. My guess would be a fair dose of the latter.

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