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"whose merchant partners typically take a week to get stuff to me" Which is a week faster than Amazon's normal shipping rate. I think Amazon has purposefully m

"whose merchant partners typically take a week to get stuff to me" Which is a week faster than Amazon's normal shipping rate. I think Amazon has purposefully made their shipping slower to get more people to sign up for Prime. But I can't make myself sign up to their anticompetitive BS.

ericd 13y ago
Or those prime packages simply get bumped up in the queue to be before other orders that were already placed because they need to be to get out as fast as they do. And how is Prime anticompetitive?
- blah32497 13y ago
  Membership plans are anticompetitive b/c they effectively lock you in to one retailer thereby decrease competition. You're effectively paying for the shipping ahead of time with the membership, so going to NewEgg or TigerDirect means you "throw money away". The other issue is that since there is no fixed cost associated with shipping you things throughout the year, do to the the economics of it, the plan must be to your disadvantage. Amazon isn't a charity - the deal is making them money - and therefore on average the consumers are losing out. Take the 80/yr and split it among all your purchases. Amazon is likely spending less than that on the extra shipping speed. PS: Hypothetically they could be spending slightly more and decreasing their profit margins in exchange for higher volumes (b/c now that you spent your 80 bucks you feel guilty about shopping elsewhere). However I'm almost certain S&H fees are a lot larger than profit margins. Since the market is already very competitive they don't have much of a profit margin in the first place.
  - mbrameld 13y ago
    Free shipping isn't the only thing prime gets you.
  - pkroll 13y ago
    I don't know where I fit in the scheme of things, but I suspect people get a lot more on Amazon than you're thinking they do once they have Prime. I've got 120 orders in the last 6 months. If you take the $80/year and split it among all orders, it's close to free: and that's before all the Amazon Prime Video I've watched. Amazon of course is making money on Prime, but how does that mean consumers are losing out, any more than on anything else they purchase? I'm paying for a bunch of videos, and a very small amount per order to get physical items in two days, with (often) a cheap option for next-day. Lastly, I do not think anticompetitive means, what you think it means. http://en.wikipedia.org/wiki/Anti-competitive_practices http://en.wikipedia.org/wiki/Anti-competitive_practices
  - ericd 13y ago
    I understand how it encourages lock-in, I would just take issue with the use of the word anticompetitive because it has a lot of implications that don't really fit here (Amazon isn't a monopoly, they're not colluding, etc). Also, Amazon loses a hell of a lot on Prime directly, though I'm sure they just view it as subsidizing growth. I'm sure they've lost money on my shipping, at least. Finally, your zero sum view of the program doesn't really make sense - by increasing the frequency of orders via Amazon, it gives them more power to negotiate better shipping rates, negotiate better bulk rates on products, and expand their distribution network, all of which can benefit both Amazon and me in the form of lower prices than if the program didn't exist, and better service.
    - blah32497 13y ago
      "by increasing the frequency of orders via Amazon, it gives them more power to negotiate better shipping rates, negotiate better bulk rates on products, and expand their distribution network" I'm skeptical that that is happening (Prime doesn't represent a giant change in volume for them). But let's assume it is, then the benefits should affect all their customers? So non Prime users end up being overcharged? "Also, Amazon loses a hell of a lot on Prime directly, though I'm sure they just view it as subsidizing growth. I'm sure they've lost money on my shipping, at least." Maybe you have managed to "beat-the-system", just like people that cycle credit cards end up making off with more money than they give the CC companies - but on average people are being ripped off. There is no growth to subsidize b/c that only makes sense if they had a mechanism to cash in. If they drop the free shipping then people will stop paying for Prime and will switch to other retailers. Slowly raising the prices to a point where you stop loosing money and then hoping people keep shopping at your website b.c of habit is also a short term strategy. On a side note, leveraging their size to get preferable shipping rates is also anticompetitive. They aren't a monopoly per se, but they've dominated the market to such an extent that UPS probably can't say no to whatever rates Amazon demands.
  - jmccree 13y ago
    Last I heard amazon was losing an average of $11/yr on prime subscribers. They are relatively famous for caring little about making a profit in the short term. I'm not sure how often you order from Amazon, but just a few overnight $4/orders and you can save the $80 easily. I've bought multiple pieces of furniture off amazon with free 2 day shipping. I don't want to know how much that would have cost me.
    - blah32497 13y ago
      You're being tricked. The saving are artificial. They clearly normally overcharge for two day shipping. Just because it says it costs 15 bucks to send the widget, doesn't mean they pay $15 when you ship it with Prime. Most people that opt for faster shipping and are willing to fork over money are people that need something urgently and are willing to pay extra. Amazon obviously exploits that. While it's true that they don't seem to care too much about profits, it's naiive to think they have a program where they just throw money away for the sake of an increase in volume. There is no long term way to "cash out" and turn that volume into money. Once you drop the incentives or raise the prices your customers simply leave to the next cheap online retailer.
      - jmccree 13y ago
        They posted over 3 billion dollars in shipping losses in 2012 and are currently saying they will likely increase the cost of prime soon. Perhaps if you haven't used prime you may not realize how much many prime subscribers use it, I'm not being tricked. Looking over the past few years of my amazon orders, I average 50-100 orders per year. I know they have good shipping rates, but I doubt it's less than $2/package for at min 2day.

ericd 13y ago

Or those prime packages simply get bumped up in the queue to be before other orders that were already placed because they need to be to get out as fast as they do. And how is Prime anticompetitive?

blah32497 13y ago
Membership plans are anticompetitive b/c they effectively lock you in to one retailer thereby decrease competition. You're effectively paying for the shipping ahead of time with the membership, so going to NewEgg or TigerDirect means you "throw money away". The other issue is that since there is no fixed cost associated with shipping you things throughout the year, do to the the economics of it, the plan must be to your disadvantage. Amazon isn't a charity - the deal is making them money - and therefore on average the consumers are losing out. Take the 80/yr and split it among all your purchases. Amazon is likely spending less than that on the extra shipping speed. PS: Hypothetically they could be spending slightly more and decreasing their profit margins in exchange for higher volumes (b/c now that you spent your 80 bucks you feel guilty about shopping elsewhere). However I'm almost certain S&H fees are a lot larger than profit margins. Since the market is already very competitive they don't have much of a profit margin in the first place.
- mbrameld 13y ago
  Free shipping isn't the only thing prime gets you.
- pkroll 13y ago
  I don't know where I fit in the scheme of things, but I suspect people get a lot more on Amazon than you're thinking they do once they have Prime. I've got 120 orders in the last 6 months. If you take the $80/year and split it among all orders, it's close to free: and that's before all the Amazon Prime Video I've watched. Amazon of course is making money on Prime, but how does that mean consumers are losing out, any more than on anything else they purchase? I'm paying for a bunch of videos, and a very small amount per order to get physical items in two days, with (often) a cheap option for next-day. Lastly, I do not think anticompetitive means, what you think it means. http://en.wikipedia.org/wiki/Anti-competitive_practices http://en.wikipedia.org/wiki/Anti-competitive_practices
- ericd 13y ago
  I understand how it encourages lock-in, I would just take issue with the use of the word anticompetitive because it has a lot of implications that don't really fit here (Amazon isn't a monopoly, they're not colluding, etc). Also, Amazon loses a hell of a lot on Prime directly, though I'm sure they just view it as subsidizing growth. I'm sure they've lost money on my shipping, at least. Finally, your zero sum view of the program doesn't really make sense - by increasing the frequency of orders via Amazon, it gives them more power to negotiate better shipping rates, negotiate better bulk rates on products, and expand their distribution network, all of which can benefit both Amazon and me in the form of lower prices than if the program didn't exist, and better service.
  - blah32497 13y ago
    "by increasing the frequency of orders via Amazon, it gives them more power to negotiate better shipping rates, negotiate better bulk rates on products, and expand their distribution network" I'm skeptical that that is happening (Prime doesn't represent a giant change in volume for them). But let's assume it is, then the benefits should affect all their customers? So non Prime users end up being overcharged? "Also, Amazon loses a hell of a lot on Prime directly, though I'm sure they just view it as subsidizing growth. I'm sure they've lost money on my shipping, at least." Maybe you have managed to "beat-the-system", just like people that cycle credit cards end up making off with more money than they give the CC companies - but on average people are being ripped off. There is no growth to subsidize b/c that only makes sense if they had a mechanism to cash in. If they drop the free shipping then people will stop paying for Prime and will switch to other retailers. Slowly raising the prices to a point where you stop loosing money and then hoping people keep shopping at your website b.c of habit is also a short term strategy. On a side note, leveraging their size to get preferable shipping rates is also anticompetitive. They aren't a monopoly per se, but they've dominated the market to such an extent that UPS probably can't say no to whatever rates Amazon demands.
- jmccree 13y ago
  Last I heard amazon was losing an average of $11/yr on prime subscribers. They are relatively famous for caring little about making a profit in the short term. I'm not sure how often you order from Amazon, but just a few overnight $4/orders and you can save the $80 easily. I've bought multiple pieces of furniture off amazon with free 2 day shipping. I don't want to know how much that would have cost me.
  - blah32497 13y ago
    You're being tricked. The saving are artificial. They clearly normally overcharge for two day shipping. Just because it says it costs 15 bucks to send the widget, doesn't mean they pay $15 when you ship it with Prime. Most people that opt for faster shipping and are willing to fork over money are people that need something urgently and are willing to pay extra. Amazon obviously exploits that. While it's true that they don't seem to care too much about profits, it's naiive to think they have a program where they just throw money away for the sake of an increase in volume. There is no long term way to "cash out" and turn that volume into money. Once you drop the incentives or raise the prices your customers simply leave to the next cheap online retailer.
    - jmccree 13y ago
      They posted over 3 billion dollars in shipping losses in 2012 and are currently saying they will likely increase the cost of prime soon. Perhaps if you haven't used prime you may not realize how much many prime subscribers use it, I'm not being tricked. Looking over the past few years of my amazon orders, I average 50-100 orders per year. I know they have good shipping rates, but I doubt it's less than $2/package for at min 2day.