The Best Article on Amazon I've Ever Read

It's long, but well worth it if you have any interest at all in retail sales, or the economics of online sales.

It's something that has been obvious to me for nearly as long as there's been an Amazon- they don't care about making money now because they want to take over the world.  If they can stay solvent as they expand into more and more and more and more retail realms, they'll eventually do there what they did with books- put most of the competition out of business and have the survivors working for them.

The boss is an old school book man.
He cut it teeth at Moe's in Berkley and opened his own shop soon after graduating from college.  He's been neck deep in the book business for most of his life. He knows books, knows them so well we're the only bookstore left in town other than Barnes & Noble..and we're going to out live them too. I have a memorial behind our counter with taped up bookmarks from departed competitors, more than a double handful collected over the years

But even the savviest old school book man, proprietor of the last independent bookstore in town, is working for Amazon.  The store takes care of itself, but by making themselves the only viable online sales conduit for books Amazon manages to tag along on sales from the warehouse.  As noted in the article:

The platform of Amazon is profitable, too. When other people sell products on Amazon Marketplace the gross margin is huge. I sell a used book on Amazon, it takes a cut of the transaction, I am the one packing and shipping that item to the buyer. You don't have to be a financial whiz to understand the cost of that transaction to Amazon is minimal. 

Yesterday I sold a book for $12.95.
The shipping credit was $3.99, so make it $16.94.

Amazon's cut was $3.29.
And I buy my shipping through them, which was $3.18 + their .07 transaction fee:  $3.25

So I paid Amazon $6.54 on a $16.94 sale for not doing anything they wouldn't have already been doing.
And I'm the one who found the book, who listed it, who stocked it, and when it sold packed it and shipped it.

You have to admire their savvy.

Oh, and apropos this point:

Amazon has seen that lowering its shipping costs and increasing the speed of shipping items to customers is like a shot of adrenaline to customer's propensity to buy from them, and so it has doubled down on building more and more fulfillment centers around the world. When I joined Amazon it had one fulfillment center. Today it has dozens just in the US alone, and I would not be surprised if it has more than 100 fulfillment centers worldwide now. 

I paid Amazon $80 to sign up for a year of Amazon Prime, their 'free 2 day shipping' program.
I go through a lot of mailing supplies each month and for years ordered them from Uline.
But a while back I got to poking around and found I could get everything except boxes (book-sized shipping boxes, 12x9x2 or thereabouts, are an exotic item) cheaper on Amazon.
So now that's what I do.

See how they are?

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