How Amazon’s ambitious new push for same-day delivery will destroy local retail
"I’d gotten next-day Saturday service for free. I have no idea how Amazon made any money on my order (the whole bill was less than $30) but several people on Twitter told me that they’ve experienced similarly delightful service."I've got news for you- they didn't make any money on your order. Amazon is profitable but has razor-thin margins on the whole. They take losses on several markets, including Prime, gambling that the entire seamless, low-cost user experience will cause enough people to spend enough money to push them over the edge of profitability.I for one have serious doubts about whether what the author describes (based to a large extent on pure speculation) would be a profitable business model. It's one thing to keep huge amounts of inventory in centralized locations and ship items out across the country over the course of days. It's quite another to stock all that inventory redundantly throughout every state. So if I want to buy a specific pair of shoes that I can't find at Foot Locker, is Amazon going to stock 50 pairs on the off-chance that somebody down the street is going to buy them? Probably not.In fact, the USPS runs a similar business model. One would then logically think (if this article is any indicator) that UPS and FedEx would go belly-up. I mean after all, if I can distribute mail to somebody's house for $0.50 in a day, how could UPS and FedEx compete with that? The reality is just the opposite. UPS and FedEx enjoy such enormous margins when compared to the USPS, that they want no part of the markets in which the USPS operates and it's too late for the USPS to compete with UPS and FedEx on parcels and important packages. I don't agree with the author's prediction at all.