Amazon---how do they do it?

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knowltoh

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I purchased a Kindle Fire and really enjoy it. It came with a 1 month subscription to Amazon Prime, which allows the use of a Book "library", streaming of movies and free 2 day shipping on a lot of items.

My wife thinks it is stupid and wants nothig to do with it! She did want me to get her a certain book from Amazon. It was available used, in very good condition, for $3.50 including the 2 day shipping.

How in the world do they do this. Must be like a "loss leader" at a retail store.
 
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I have been a prime member for many years and have received 2 day free shipping on many things including a lawnmower. I buy 20 or so books a month, and did almost all of my Christmas shopping from Amazon. L believe it is the volume of business they do, but I also heard the have like migrant workers in their warehouses.
 
We looked Amazon as an outlet for our products and they hit the manufacturer HARD. They want more discount than anybody else and want you to pay shipping costs. We set it on the back burner for now.

Not too sure about the migrant workers but I know people who worked there and they don't pay much.
 
The more I think about this the more questions I have.

The United States is in a world of hurt. What I should really do is go to a local book store and buy the book at retail for $19.95 plus 6% sales tax. Supporting local economies needs to return as a part of the solution to our economic woes. Somehow I need to come to grips with this.

By not buying locally, I saved myself over $17.50 which I can now use in the local economy. Is this just an attempt to rationalize the issue?
 
knowltoh said:
The more I think about this the more questions I have.

The United States is in a world of hurt. What I should really do is go to a local book store and buy the book at retail for $19.95 plus 6% sales tax. Supporting local economies needs to return as a part of the solution to our economic woes. Somehow I need to come to grips with this.

By not buying locally, I saved myself over $17.50 which I can now use in the local economy. Is this just an attempt to rationalize the issue?
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I don't think so. Because I buy on Amazon, eBay and such, I have some extra that I can use to go out and eat in the restaurants with friends every weekend. If I purchased locally, paying more, I'd have to stay home and fix it myself. So buying some things at a discount, when you can, does give you more to spend elsewhere.
 
Not to change the subject too much, How do you like the Fire? I have had kindles since the first one, three so far.

It is cheaper to buy one kindle every 16 months than the books I read; now with the library Prime is looking real good. My son has prime and has had it for so long that he only pays $25.00 a year for it, we doubt that this will last too much longer.

I just upgraded my wireless router so that the signal will reach the shop and I can take my netbook out there to surf inspiration or instructions and youtube videos.

I want a Fire but I have not been able to play with one yet.
 
I really like the Fire. It is my first experience with a Kindle. I probably could have gotten buy with one of the cheaper ones, but i hope to make use of the capabilities as time goes on. Already read "Water for Elephants" from the Kindle library.
 
In answer to your original question, Amazon does NOT pay what you and I do for shipping.

They get drastic reductions in cost, because they can fill railroad car loads each day. So, while they did not get rich on your book, they also did not LOSE money and they hope you will return the next time your wife wants a whole LIBRARY of books.




Going farther down this path---our local malls were NOT crammed with people this holiday season. "On-line" purchases continue to gain popularity. This will result in a change of "jobs" available. Delivery services (including USPS) should prosper and their employees don't need college degrees. Hopefully, this will be one of the factors that get us out of the economic "hole" we are currently in.

Time will tell.
 
Most of the used books are sold "through" Amazon.com, and not "by" Amazon. The books are owned by Amazon affiliates, local bookstores or hobby sellers, and are shipped from the affiliates. I have bought many books this way and the listings tell you where the book is coming from. You cannot combine the shipping charges because the books ship individually from different locations. These local dealers may have the books as overstock items or part of a batch bought from yard sales and such. Isn't the Internet wonderful?
 
Hmmm. I just ordered and received a book from Amazon. Not yet convinced the electronic system is cost effective. Since I order, read and store books, many have been accumulated. Amazon offers a way to buy back the books. At this point I am just getting ready to educate myself on how this is done. Has anyone sold books back to Amazon and what has their experience been?
 
If you sell a book back to them you will take a hit on the price. A lot less than you can sell it your self if you don't mind waiting to sell.

Can't talk to migrant workers other than as been said low skill low paid high turn over pick and put workers. A lot of the items are sold by affiliates of Amazon. Think flea bay with only one price.

I do know that they do squeeze the publishers on what they will pay for a book. Have a friend that no longer sells them on Amazon, due to such a low price (Amazon tells you what they will pay you) and having to pay shipping. Then Amazon uses all the money they collect to do what the banks do by floating the money and raking in the interest. In other words they are real slow to pay what they owe people. When it was only a few books it could take longer than 90 days.

There are lots of places to buy books on line.
http://www.edwardrhamilton.com/ remainders and new big discounts

http://www.powells.com/ used and new a very large internet and mortar bookstores west coast

http://used.addall.com/ a world wide book search engine lists a large number of internet book sellers. Compares and lists all that it finds.

I have no interest other than a satisfied long time customer.

Like a lot of things today Amazon is good and bad, and one has to decide what you want to be involved in or use local or shipping.

As what PSI is finding out with their use of a transhipper trucking it to a local post office and then shipping it by the USPS. It adds up to 10 days shipping and sometimes it doesn't work worth a rotten root knob.
:clown:
 
I got my 12 year old a Kindle Fire... I was under the impression it only played Angry Birds...

At least ours does. It is a nice piece of gear.

I made her sign a Users Agreement and have ALL sorts of rules stipulating its use. There is NO way to secure the damn things, so I am playing with white listing on my firewall via URL lock down here to keep her from inviting half of Anonymous to come play on my home network. I am monitoring the hell out of her use, but that damn thing is so unsecured it gives me shivers to think about it.
 
As for the free 2-day shipping - a big part of how they do it is that Amazon Prime is a pay service, and a lot of paying customers under-utilize it. It's pretty typical marketing - you sign up for a "trial period" for free, then forget to cancel it and get charged. By then, you've already paid, so you may as well keep it for the year, right? And you order a couple of things, and the free 2-day shipping is convenient, so you just kinda passively stick with it while they collect the annual fees.

You can rest assured that they've carefully figured out that they make more money by offering Amazon Prime than by not, and that they make more money by having free trials of Amazon Prime than not.
 
What Amazon is doing is nothing new. Wallmart and the other large chain stores are very similar in what they are doing. With the volume they are moving they can pretty much dictate their terms to their suppliers.

Wall-mart and the large grocery stores dictates the price they pay and even make the food vendors stock their own products on the shelves. They even limit which brand gets what shelf space.

I prefer buying from small locally own shops when possible. But have no qualms about buying from Amazon when the choice is a local big-box chain. We do had a local used book store in town called the Book Celler. They paid 10 cents on the dollar for your books.

I even got my Jet lathe and Dewalt miter saw through Amazon.

Joe
 
Whatever they do and however they do it, it works. They have good prices, a LOT of vendors use them including Rockler, Woodcraft, PSI, etc.

I've heard that most people don't use the 'by back' but register as vendors in order to sell their used books to other people.

I like the eReaders. They give you access to a world of books and eliminate the stacks, shelves, and boxes of read books.
 
I received a Kindle Fire for Christmas, and I love it.

I can get all of the books I want in one location, and not have to fill up space in the bookshelf. Additionally, I am heading to Thailand at the end of January for two weeks, and will be loaded down with books to read on the plane, as well as movies to watch. I can carry several hundred books and a few dozen movies in the space required for one hard back book.
 
My view is that if you are spending $20 into the economy, does it really matter if it goes locally or nationally... the money goes into circulation. Granted, it may not help the "local" business, but I think it will help the overall picture. And as the internet continues to grow, congress or someone will figure a way to make monies off that growth... there is already talk about sales taxes on the internet sales. Amazon recently opened a plant(warehouse) in TN, so if it ships from TN plant to a TN address, sales tax is collected.

On the migrant workers at the various plants... I read a story on Yahoo News about the Workampers... retiree's and RV'ers and such who can travel freely that "migrate" to the various places where Amazon has warehouse and does the seasonal work. The article said the pay ranged in the $10 per hour range +/-...

I've read pros and cons about the Kindle fire... eventually I will get a Kindle... the wife has one and loves it, but I only want an e-reader... don't need all the bells and whistles the Fire is supposed to have and from some of the reviews doesn't work all that well.
 
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I have used Amazon's Prime service for a few years and love it. Shipment has always been very quick with no damage, to date, to any of the products received. My volume has made the annual fee well worth it. Some items come from local suppliers and arrive the next day (once, the same day), at no additional cost. This generally saves me a 70-80 mile trip and two hours or more of traffic.

I've read the articles about their labor force as well. It does remind me of migrant work in some instances, but I don't think (and I may be wrong) the employees are raising much fuss. I do nearly all of my shopping for turning supplies locally or via direct mail order.
 
Back to the original question, yes, Amazon Prime service is a classic loss leader. Best estimates I've seen suggest an average loss of $11/member annually on shipping costs alone. Amazon is tight-lipped about how many Prime members there are, it's generally thought to be from 4-6 million, so perhaps $66M in shipping losses annually.

BUT, because Prime membership encourages you to buy more (make the subscription cost worthwhile to you, nearly free overnight shipping, instant gratification, etc), estimates are that the average Amazon shopper increases their average yearly purchases from $400/yr to $900/yr when they sign up for Prime. 92% of Prime subscribers intend to renew the next year, i.e. huge brand loyalty.

For sure, Amazon is aggressive, those opposed to monolithic capitalism should think twice about the bargain...
 
Shock me said:
Back to the original question, yes, Amazon Prime service is a classic loss leader. Best estimates I've seen suggest an average loss of $11/member annually on shipping costs alone. Amazon is tight-lipped about how many Prime members there are, it's generally thought to be from 4-6 million, so perhaps $66M in shipping losses annually.

BUT, because Prime membership encourages you to buy more (make the subscription cost worthwhile to you, nearly free overnight shipping, instant gratification, etc), estimates are that the average Amazon shopper increases their average yearly purchases from $400/yr to $900/yr when they sign up for Prime. 92% of Prime subscribers intend to renew the next year, i.e. huge brand loyalty.

For sure, Amazon is aggressive, those opposed to monolithic capitalism should think twice about the bargain...
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Very interesting statistics. Is Amazon the source?
 
BlackPearl said:
Not to change the subject too much, How do you like the Fire? I have had kindles since the first one, three so far.

It is cheaper to buy one kindle every 16 months than the books I read; now with the library Prime is looking real good. My son has prime and has had it for so long that he only pays $25.00 a year for it, we doubt that this will last too much longer.

I just upgraded my wireless router so that the signal will reach the shop and I can take my netbook out there to surf inspiration or instructions and youtube videos.

I want a Fire but I have not been able to play with one yet.
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Take a look at this. Made me think twice about buying the Kindle Fire. And it verified some of the reviews that I have read. I will be buying a regular Android tablet and avoiding the Fire and the Nook.

http://video.foxnews.com/v/1283751922001/new-kindle-fire-a-major-letdown/?playlist_id=158198
 
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