Amazon Prime

[mp170.6]

How does Amazon keep its head above water with Amazon Prime?

 

I buy a lot of little things that aren't stocked in a local warehouse, so they have to use FedEx or UPS.  Yesterday I bought $30 of oil filters and batteries with two-day shipping.  Today, they shipped from Mechanicsville, VA in a 5 pound box, FedEx Standard Overnight.

 

The retail price on that shipping is $90.79 and I know Amazon doesn't pay that price.  What do they get, a 75% discount?  90% discount? 

 

 

[Brandon]

Probably a pretty standard business deal.

 

Amazon says they do X in shipping, XYZ shipping says they will give then price Y to go through them. Done dundy.

 

Or, they make X to eat a little bit from Y.

[gotbeer]

Even on Ebay and such.  I have no idea how these places stay in business.  I've bought things from City of Industry, for $0.99.  And they send it DHL instead of sticking it in an envelope and sending it USPS.

[mrwicked]

i love prime.

been remodeling my place for over a year and i buy a good amount of stuff on amazon (fancy faucets, towel bars, door hardware, etc).

they aren't the best price usually compared to local shops, but getting it in two days makes it worth it.

 

never tried the streaming stuff though.

[Adam]

Some of the financial guys will probably know better than I but I don't think Amazon has ever shown a profit. Not that they couldn't though, they just reinvest everything into new products and services. 

Edited June 11, 2015 by Adam

[halobob]

Some of the financial guys will probably know better than I but I don't think Amazon has ever shown a profit. Not that they couldn't though, they just reinvest everything into new products and services. 

Yup, Amazon has yet to turn a profit.  Revenues are huge though.  

 

Edit, my bad they have turned a profit in some quarters.  

Edited June 12, 2015 by halobob

[mp170.6]

Another example of wackiness involving Amazon Prime.  

 

I have a buddy who lives on Catalina Island.  Amazon Prime still promises two-day shipping to Avalon.  It has become extremely popular because the prices of everything are insanely expensive on the island.  To get packages over there, USPS/UPS/FedEx must deliver to Long Beach Airport at scheduled times so the DC-3 can fly them over.  My friend gets between 500 and 700 packages every year.  They buy all of their regular household supplies and non-perishable food items via Amazon. 

 

Sometimes packages are delayed and miss the DC-3 flight out of Long Beach.  He calls up Amazon every time this happens and they extend his Prime membership, free of charge, as payment for the delayed packages.  As a result, he and most islanders haven't paid for a Prime membership in years. 

[HaloMagic]

Amazon has turned a profit. Many years. Some people get confused with the fact that they have never paid a dividend. Or that their net income is extraordinarily low compared to their revenue. But they have turned a profit.

[nate]

http://uk.businessinsider.com/jeff-bezos-on-profits-2014-12

 

They make plenty of money they just reinvest it into the company.

 

Also, as the OP mentioned, I am sure they probably only pay about 10% of the shipping cost we do because of the volume.

 

I love Prime.  Never even tried the streaming stuff.

[Brandon]

We have HBO Go, Netflix, Prime, and Hulu...maybe others, my better half just buys them and says she uses them each a bit.

We have a Roku on one tv and use the ps4 on another.

I don't really see the need for all the subscriptions because there is a lot of carry over with programming, but we have them all.

[Schildog]

I'm not talking big electronics but amazon is generally more expensive than target for home items.

[mrwicked]

They turn a profit, just a very small one.

All the rest of their revenue goes right back into the business (or pays for higher shipping costs, etc).

But if you added up how much profit Amazon has made in total over their entire 20 year history....

Apple makes more than that in a couple weeks.

Insane.

Amazon's future though is in AWS. Their cloud side is an absolute juggernaut.

Edited June 11, 2015 by mrwicked

[nate]

I always check these Prime and Netflix videos available and never see anything I care to watch that I haven't already.

[Ray McKigney]

I have a friend who has Amazon Prime. He thinks it's the greatest thing ever. A couple of months ago, he had a drone drop off a package at the front of his porch. He said there was a guy at the end of the street who was controlling it and he went to talk to him. The Amazon guy said they were testing out the drones and told him all about it. Pretty interesting.

[stevestevens]

I always check these Prime and Netflix videos available and never see anything I care to watch that I haven't already.

 

 

My wfie and I use Hulu.  We never use netflix.  The kids watch cartoons on netflix.  

[happybat4]

I love it. As an educator I get it for $49 a year. In fact anybody with a .edu email can get it for $49 a year.

[Brandon]

Yeah, my better half still uses her CSUF email address.

[deepdrive]

Probably a pretty standard business deal.

 

Amazon says they do X in shipping, XYZ shipping says they will give then price Y to go through them. Done dundy.

 

Or, they make X to eat a little bit from Y.

 

I'm confused. Is Z on 1st?

[ELEVEN]

I think the X shipping still comes in a plain brown wrapper.

[Mark68]

How does Amazon keep its head above water with Amazon Prime?

 

I buy a lot of little things that aren't stocked in a local warehouse, so they have to use FedEx or UPS.  Yesterday I bought $30 of oil filters and batteries with two-day shipping.  Today, they shipped from Mechanicsville, VA in a 5 pound box, FedEx Standard Overnight.

 

The retail price on that shipping is $90.79 and I know Amazon doesn't pay that price.  What do they get, a 75% discount?  90% discount? 

I have decided to not think about it, much like how sausages are made, I probably don't wanna know.

 

But I love that they do.

[wopphil]

Amazon Prime routinely fu#$s up our grocery order, usually by giving us bad veggies (or today, broken eggs). The wife always calls, complains, and they credit us $10-15 (plus our money back on the items).

[ten ocho recon scout]

Just started checking out the videos available. Decent assortment, nice compliment to netflix. 

Question, when it gives you the option to download, can you do it to multiple devices? I want to download a bunch to my tablet for when i fly, but want to put a handful of the same movies on my phone. Is that ok to do, or am I screwed once i do it once?

[gotbeer]

I believe you are ok.  They give you a few devices to download to.  I don't remember the exact number.  But there is a section somewhere on their site that lists all the devices you have used.

[ten ocho recon scout]

Sweet. Saw a couple old school gems on there with free downloads. Time to get a huge micro sd card and get my tablet some new flicks

[Vegas Halo Fan]

Perhaps tied to this is Amazon leasing 20 Boeing 767s to run their own cargo operation.

Amazon lines up fleet of Boeing jets to build its own air-cargo network