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Meanwhile, CVS + Walgreens lost $6B in market cap on the news Amazon is moving directly into pharmacy space. It's crazy how competitive Wall Street views Amazo

Meanwhile, CVS + Walgreens lost $6B in market cap on the news Amazon is moving directly into pharmacy space. It's crazy how competitive Wall Street views Amazon moving into a market; have there been examples of Amazon making a large purchase/move but completely failing? (sure there are, just not coming me off the top of my head)

elvirs 8y ago
this happens all the time. wall street makes money from stocks going up and down, they are designed to react to anything by sending stocks up or down. you can confidently buy some CVS Walgreens stock because I bet that stock is climbing back up within weeks
- xkjkls 8y ago
  I'm pretty sure the investors on Wall Street are far more sophisticated than just your "confidence".
chrischen 8y ago
Fire phone. Though I'm not sure if it was a purchase.
tetrep 8y ago
https://en.wikipedia.org/wiki/Fire_Phone https://en.wikipedia.org/wiki/Fire_Phone
- deleted 8y ago
  [deleted]
deleted 8y ago
[deleted]
Nav_Panel 8y ago
Seems like in any market where Amazon can reasonably compete with a brick & mortar, Amazon will win... Consider how expensive real estate is these days, especially in urban areas (and how much "millennials" like delivery). It's a solid formula.
- njarboe 8y ago
  And they have a large brick & mortar presence with Whole Foods.
- jburwell 8y ago
  It's not just millenials in this case. I am an GenX-er with a wife and two kids. We are planning to switch to a mail order pharmacy (Pill Pack or Costco -- dependent on cost) in the near future. My wife, one of our daughters, and our dog (on a human med) taking regular meds. Even being a 5 minute drive from a brick and mortar pharmacy, and it is still a PIA. None of the scripts are on the same schedule so we make multiple trips. Inevitably, you get in line behind someone with a refill or insurance issue turning a quick pick into a 20 minute wait. A service that syncs up script refill schedules and works with doctors and insurance companies on refills renewals is a massive time saver and stress reducer.
- jklein11 8y ago
  But think about how much it costs to have the item physically delivered. There is no way that Amazon can make money on a $10 item that they need to deliver in a two day time frame.
blowski 8y ago
They invested $175M in LivingSocial, rebranded it "Amazon Local", then killed it off.
- pseudalopex 8y ago
  Amazon owned part of LivingSocial and also operated Amazon Local. LivingSocial eventually sold to Groupon.
  - blowski 8y ago
    Ah thanks for the correction
mtmail 8y ago
1999 Amazon when after Ebay with Amazon Auctions, about the same time Amazon zShops (now Marketplace) started. Back then a big bet in terms of money and resources that failed. https://glinden.blogspot.com/2006/04/early-amazon-auctions.html https://glinden.blogspot.com/2006/04/early-amazon-auctions.h...
simonsarris 8y ago
All the time. They tried to make a move into retail registers to compete with Square, and failed. They shuttered Amazon register in 2015: https://bits.blogs.nytimes.com/2015/10/30/amazon-shutting-down-its-register-credit-card-processor/ https://bits.blogs.nytimes.com/2015/10/30/amazon-shutting-do... They tried to take on Etsy with Amazon Handmade which bombed Etsy stock, but Handmade has gone pretty much nowhere, except some re-branding this year. People just forget Amazon's failed ventures, even fairly high profile ones, because there are so many, and the hits sometimes so large (like AWS). Quoting myself from April: > Amazon's ethos of "Announce fast, Release fast, if it fails, oh well" is intentional. From Bezos' point of view, this is actually a feature. In a shareholder letter in 2016, he called Amazon "The best place in the world to fail." He wants lots of teams working on lots of products, and if some of them don't pan out, that's OK. This has lead to a lot of successes, but also a number of small headaches for consumers who use products that are quickly discontinued and (charitably) forgotten.
- cabaalis 8y ago
  > They tried to take on Etsy with Amazon Handmade which bombed Etsy stock, but Handmade has gone pretty much nowhere, except some re-branding this year. Is severely damaging another online vendor really a failure for Amazon? It seems to me at that level, revenue from a venture is not always the only measure of success.
  - simonsarris 8y ago
    I had wondered that. Disclaimer, I'm long SQ. If you're following AMZN, SQ, or PYPL, you probably saw the headlines back in April: Amazon's Next Mission: Using Alexa to Help You Pay Friends Firm looks to make voice commands the next wave of commerce SQ and PYPL took a small dive on this news, even though at face value, its quite silly. Amazon would probably have a much better time trying to buy PayPal for Venmo or Square for Cash App but also to compete in the small-biz transaction field that Amazon tried and gave up on. Building out such a service based on Alexa users is wacky, and there doesn't seem to be a pressing need to let loose your wallet via voice. Personally, I think it's somewhat unlikely that AMZN would acquire PYPL due to a clash of cultures when it comes to customer service. (Amazon's: Very good. PayPal's: Legendarily evil). This reputation may also be the reason PayPal has kept their own name off of their Venmo acquisition product until very recently. I think there is a very slight chance that AMZN would try to acquire SQ. It would allow them to really break into small-vendor retail where they have failed with homegrown solutions before, and give them instant access to a growing P2P transaction market. Everybody loves to speculate about such acquisitions, though. ...But it would certainly be funny if the only reason Amazon made that press release was to butter up one of those two companies for acquisition, either by decreasing their share value or exerting pressure on them internally to agree to a deal before they face Amazon's competition.
jdhn 8y ago
CVS is down 8% right now, Walgreens is down 9%, and Rite Aid is down 10%. Investors are very nervous right now.
- hahnpv 8y ago
  Short term voting machine, long term weighting machine
- brianbreslin 8y ago
  I made a small bet earlier in the year thinking AMZN would buy Rite Aid. ah well.
ProAm 8y ago
No different than when Garmin's stock collapsed when Google announced free Maps/Navigation [1][2]. It's just the market reacting to supply and demand. [1] http://www.macnn.com/articles/09/10/28/google.maps.helps.gps.maker.stock.crash http://www.macnn.com/articles/09/10/28/google.maps.helps.gps... [2] http://www.businessinsider.com/googles-free-gps-service-crushes-garmin-tomtom-shares-2009-10 http://www.businessinsider.com/googles-free-gps-service-crus...
- atourgates 8y ago
  And caused a sea change for the industry and Garmin's business model. Garmin's automotive segment revenue has dropped from $2.5-billion in 2008, to $700-million in 2017. [1] They've been able to largely make up for it with revenue from other sources, [2] (mostly outdoor/fitness) [3], but I'm sure that shift and innovation was driven by the event you mentioned. [1]https://www.statista.com/statistics/217901/net-sales-in-the-automotive-segment-of-garmin-since-2008/ https://www.statista.com/statistics/217901/net-sales-in-the-... [2]https://www.statista.com/statistics/217907/net-sales-of-garmin-since-2009-by-quarter/ https://www.statista.com/statistics/217907/net-sales-of-garm... [3] https://www.statista.com/statistics/217905/revenue-distribution-of-garmin-by-segment/ https://www.statista.com/statistics/217905/revenue-distribut...
  - pm90 8y ago
    Wow those are staggering numbers! Props to Garmin for surviving a 60% reduction in revenue... I would've expected the company to just fold after that kind of loss.
  - jedberg 8y ago
    And most of that revenue surprises me. My car has a Garmin system built in (Honda). I never use it. I just connect my smartphone with CarPlay and use Waze (which will be even easier in September when it will show on the main touchscreen). So in my case, I paid money to Honda who in turn paid it to Garmin for something I'll never use, just so they can say it "comes with Navigation". I wonder how long that will last before no one cares if a car comes with navigation. I've already seen high end cars being sold without navigation, and just marketed as "smartphone ready". I suspect in a few years either all the cars will be sold that way, or they will all be self driving and get their navigation elsewhere.
rabidonrails 8y ago
Remember the fire phone? Neither does anyone else.
prostoalex 8y ago
The target market is dominated by seniors, who no longer have to drive to a local pharmacy and hang around the store while waiting for the subscription to be fulfilled. I am frankly surprised no dominant online player has emerged yet. Perhaps the shipping costs were a constraint?
- petra 8y ago
  True, maybe shipping was a constraint. can any random guy ship drugs ? isn't some special supply chain required ? Another guess is that changing habits(especially since buying drugs is an infrequent event, and that we're dealing with seniors) and creating trust we're other reasons.
  - Bartweiss 8y ago
    PillPack is basically a supply chain company - it's not an easy field to get into. I don't know if "who can ship these" is a big hurdle, though. Possibly a bigger issue is "doctors and patients are used to calling prescriptions in to pharmacies". But the main issue with drug delivery is the need for reliability; you can't have somebody's heart medication ship out late or get lost in transit, basically ever. And if you change offerings or go out of stock on specific products (which most retailers do often), you'll quickly be seen as an unreliable way to get any kind of regular medication. Plus, you can't let any fakes or low-quality products into your supply chain - so sourcing new suppliers is hard, but running out of suppliers for any single product is a crisis. So being an online seller for use-as-needed prescription meds might be easy, but the bulk of the money is in people taking drugs daily, and that stuff is damned hard to offer.
    - deleted 8y ago
      [deleted]
- deleted 8y ago
  [deleted]
- Bartweiss 8y ago
  Actual shipping costs aside, being a delivery channel is way harder for drugs than for most other things. Amazon is reliable, sure, but what do they have - 99.9% fulfillment, 99% on time, 99% with authentic products, 97% of listed products in stock? Those are guesses, but apply those numbers to delivering vital daily medicines and the problem becomes pretty obvious. Keeping in-stock rates high and "on time with authentic products" rates near 100% is not an easy task. It's not something pharmacies do perfectly either, but their shortages are generally at a store level rather than national, and they're not asking people to completely switch delivery mechanism to trust a space with online one provider.
xkjkls 8y ago
They tried a travel site once; they tried to sell insurance once; they tried to make a phone once; etc. They fail a lot of the time, but sometimes even when they do, it's a kick in the ass to some of the other competitors in the field, which causes them to depress their margins. So sometimes, even if Amazon's presence in the market fizzles out, they end up still reducing other's prospects.
ianamartin 8y ago
Phones.
deleted 8y ago
[deleted]

elvirs 8y ago

this happens all the time. wall street makes money from stocks going up and down, they are designed to react to anything by sending stocks up or down. you can confidently buy some CVS Walgreens stock because I bet that stock is climbing back up within weeks

xkjkls 8y ago
I'm pretty sure the investors on Wall Street are far more sophisticated than just your "confidence".

chrischen 8y ago

Fire phone. Though I'm not sure if it was a purchase.

tetrep 8y ago

https://en.wikipedia.org/wiki/Fire_Phone https://en.wikipedia.org/wiki/Fire_Phone

deleted 8y ago
[deleted]

deleted 8y ago

[deleted]

Nav_Panel 8y ago

Seems like in any market where Amazon can reasonably compete with a brick & mortar, Amazon will win... Consider how expensive real estate is these days, especially in urban areas (and how much "millennials" like delivery). It's a solid formula.

njarboe 8y ago
And they have a large brick & mortar presence with Whole Foods.
jburwell 8y ago
It's not just millenials in this case. I am an GenX-er with a wife and two kids. We are planning to switch to a mail order pharmacy (Pill Pack or Costco -- dependent on cost) in the near future. My wife, one of our daughters, and our dog (on a human med) taking regular meds. Even being a 5 minute drive from a brick and mortar pharmacy, and it is still a PIA. None of the scripts are on the same schedule so we make multiple trips. Inevitably, you get in line behind someone with a refill or insurance issue turning a quick pick into a 20 minute wait. A service that syncs up script refill schedules and works with doctors and insurance companies on refills renewals is a massive time saver and stress reducer.
jklein11 8y ago
But think about how much it costs to have the item physically delivered. There is no way that Amazon can make money on a $10 item that they need to deliver in a two day time frame.

blowski 8y ago

They invested $175M in LivingSocial, rebranded it "Amazon Local", then killed it off.

pseudalopex 8y ago
Amazon owned part of LivingSocial and also operated Amazon Local. LivingSocial eventually sold to Groupon.
- blowski 8y ago
  Ah thanks for the correction

mtmail 8y ago

1999 Amazon when after Ebay with Amazon Auctions, about the same time Amazon zShops (now Marketplace) started. Back then a big bet in terms of money and resources that failed. https://glinden.blogspot.com/2006/04/early-amazon-auctions.html https://glinden.blogspot.com/2006/04/early-amazon-auctions.h...

simonsarris 8y ago

All the time. They tried to make a move into retail registers to compete with Square, and failed. They shuttered Amazon register in 2015: https://bits.blogs.nytimes.com/2015/10/30/amazon-shutting-down-its-register-credit-card-processor/ https://bits.blogs.nytimes.com/2015/10/30/amazon-shutting-do... They tried to take on Etsy with Amazon Handmade which bombed Etsy stock, but Handmade has gone pretty much nowhere, except some re-branding this year. People just forget Amazon's failed ventures, even fairly high profile ones, because there are so many, and the hits sometimes so large (like AWS). Quoting myself from April: > Amazon's ethos of "Announce fast, Release fast, if it fails, oh well" is intentional. From Bezos' point of view, this is actually a feature. In a shareholder letter in 2016, he called Amazon "The best place in the world to fail." He wants lots of teams working on lots of products, and if some of them don't pan out, that's OK. This has lead to a lot of successes, but also a number of small headaches for consumers who use products that are quickly discontinued and (charitably) forgotten.

cabaalis 8y ago
> They tried to take on Etsy with Amazon Handmade which bombed Etsy stock, but Handmade has gone pretty much nowhere, except some re-branding this year. Is severely damaging another online vendor really a failure for Amazon? It seems to me at that level, revenue from a venture is not always the only measure of success.
- simonsarris 8y ago
  I had wondered that. Disclaimer, I'm long SQ. If you're following AMZN, SQ, or PYPL, you probably saw the headlines back in April: Amazon's Next Mission: Using Alexa to Help You Pay Friends Firm looks to make voice commands the next wave of commerce SQ and PYPL took a small dive on this news, even though at face value, its quite silly. Amazon would probably have a much better time trying to buy PayPal for Venmo or Square for Cash App but also to compete in the small-biz transaction field that Amazon tried and gave up on. Building out such a service based on Alexa users is wacky, and there doesn't seem to be a pressing need to let loose your wallet via voice. Personally, I think it's somewhat unlikely that AMZN would acquire PYPL due to a clash of cultures when it comes to customer service. (Amazon's: Very good. PayPal's: Legendarily evil). This reputation may also be the reason PayPal has kept their own name off of their Venmo acquisition product until very recently. I think there is a very slight chance that AMZN would try to acquire SQ. It would allow them to really break into small-vendor retail where they have failed with homegrown solutions before, and give them instant access to a growing P2P transaction market. Everybody loves to speculate about such acquisitions, though. ...But it would certainly be funny if the only reason Amazon made that press release was to butter up one of those two companies for acquisition, either by decreasing their share value or exerting pressure on them internally to agree to a deal before they face Amazon's competition.

jdhn 8y ago

CVS is down 8% right now, Walgreens is down 9%, and Rite Aid is down 10%. Investors are very nervous right now.

hahnpv 8y ago
Short term voting machine, long term weighting machine
brianbreslin 8y ago
I made a small bet earlier in the year thinking AMZN would buy Rite Aid. ah well.

ProAm 8y ago

No different than when Garmin's stock collapsed when Google announced free Maps/Navigation [1][2]. It's just the market reacting to supply and demand. [1] http://www.macnn.com/articles/09/10/28/google.maps.helps.gps.maker.stock.crash http://www.macnn.com/articles/09/10/28/google.maps.helps.gps... [2] http://www.businessinsider.com/googles-free-gps-service-crushes-garmin-tomtom-shares-2009-10 http://www.businessinsider.com/googles-free-gps-service-crus...

atourgates 8y ago
And caused a sea change for the industry and Garmin's business model. Garmin's automotive segment revenue has dropped from $2.5-billion in 2008, to $700-million in 2017. [1] They've been able to largely make up for it with revenue from other sources, [2] (mostly outdoor/fitness) [3], but I'm sure that shift and innovation was driven by the event you mentioned. [1]https://www.statista.com/statistics/217901/net-sales-in-the-automotive-segment-of-garmin-since-2008/ https://www.statista.com/statistics/217901/net-sales-in-the-... [2]https://www.statista.com/statistics/217907/net-sales-of-garmin-since-2009-by-quarter/ https://www.statista.com/statistics/217907/net-sales-of-garm... [3] https://www.statista.com/statistics/217905/revenue-distribution-of-garmin-by-segment/ https://www.statista.com/statistics/217905/revenue-distribut...
- pm90 8y ago
  Wow those are staggering numbers! Props to Garmin for surviving a 60% reduction in revenue... I would've expected the company to just fold after that kind of loss.
- jedberg 8y ago
  And most of that revenue surprises me. My car has a Garmin system built in (Honda). I never use it. I just connect my smartphone with CarPlay and use Waze (which will be even easier in September when it will show on the main touchscreen). So in my case, I paid money to Honda who in turn paid it to Garmin for something I'll never use, just so they can say it "comes with Navigation". I wonder how long that will last before no one cares if a car comes with navigation. I've already seen high end cars being sold without navigation, and just marketed as "smartphone ready". I suspect in a few years either all the cars will be sold that way, or they will all be self driving and get their navigation elsewhere.

rabidonrails 8y ago

Remember the fire phone? Neither does anyone else.

prostoalex 8y ago

The target market is dominated by seniors, who no longer have to drive to a local pharmacy and hang around the store while waiting for the subscription to be fulfilled. I am frankly surprised no dominant online player has emerged yet. Perhaps the shipping costs were a constraint?

petra 8y ago
True, maybe shipping was a constraint. can any random guy ship drugs ? isn't some special supply chain required ? Another guess is that changing habits(especially since buying drugs is an infrequent event, and that we're dealing with seniors) and creating trust we're other reasons.
- Bartweiss 8y ago
  PillPack is basically a supply chain company - it's not an easy field to get into. I don't know if "who can ship these" is a big hurdle, though. Possibly a bigger issue is "doctors and patients are used to calling prescriptions in to pharmacies". But the main issue with drug delivery is the need for reliability; you can't have somebody's heart medication ship out late or get lost in transit, basically ever. And if you change offerings or go out of stock on specific products (which most retailers do often), you'll quickly be seen as an unreliable way to get any kind of regular medication. Plus, you can't let any fakes or low-quality products into your supply chain - so sourcing new suppliers is hard, but running out of suppliers for any single product is a crisis. So being an online seller for use-as-needed prescription meds might be easy, but the bulk of the money is in people taking drugs daily, and that stuff is damned hard to offer.
  - deleted 8y ago
    [deleted]
deleted 8y ago
[deleted]
Bartweiss 8y ago
Actual shipping costs aside, being a delivery channel is way harder for drugs than for most other things. Amazon is reliable, sure, but what do they have - 99.9% fulfillment, 99% on time, 99% with authentic products, 97% of listed products in stock? Those are guesses, but apply those numbers to delivering vital daily medicines and the problem becomes pretty obvious. Keeping in-stock rates high and "on time with authentic products" rates near 100% is not an easy task. It's not something pharmacies do perfectly either, but their shortages are generally at a store level rather than national, and they're not asking people to completely switch delivery mechanism to trust a space with online one provider.

xkjkls 8y ago

They tried a travel site once; they tried to sell insurance once; they tried to make a phone once; etc. They fail a lot of the time, but sometimes even when they do, it's a kick in the ass to some of the other competitors in the field, which causes them to depress their margins. So sometimes, even if Amazon's presence in the market fizzles out, they end up still reducing other's prospects.

ianamartin 8y ago

Phones.

deleted 8y ago

[deleted]