Amazon Strategy Teardown
I continue to be bearish on Amazon long-term. The notion that shoppers will one day buy things simply with the push of a button or saying &quot;Alexa, get me some paper towels&quot; seems extremely far-fetched to me. Most shoppers are extremely price-sensitive and won&#x27;t buy things before researching the price, save possibly for a few low-price staples like toilet paper or soap. So this idea that Amazon keeps suggesting where people are shopping with just their voices, seems DOA. But even if people do prefer convenience over price, there&#x27;s no money in delivering groceries to people. Groceries are notoriously low-margin, one of the lowest margin businesses there is, so delivering groceries to people doesn&#x27;t seem like it&#x27;s going to make Amazon the trillion-dollar company some people think it will eventually become.<p>Looking forward, 10-20 years, maybe the delivery cost issue will be solved with self-driving vehicles and robotic deliveries. But then, why would Amazon be the sole beneficiary of that development and not every grocery store? Sure, they have distribution facilities, but so does every major grocery and retail chain.<p>As for AWS, I&#x27;m not real high on that side of the business, either. Despite being the runaway leader in cloud service, they make very little money in it so I&#x27;m not very confident that their margins will increase as competition from Microsoft and Google only intensifies.<p>I&#x27;m not at all suggesting that Amazon is going away, and what they&#x27;ve done to this point is nothing short of extraordinary. I just think long term that they will settle in as a large American retailer that reshaped the retail landscape for other stores that will eventually catch up.