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Old 03-21-2013, 08:11 AM   #138
fjtorres
Grand Sorcerer
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I found the mattress anecdote the most telling.
It reminded me of the MONEYBALL book.
Which is *not* a baseball book but rather an economics primer about how clever people can exploit inefficiencies in a system (be it baseball player scouting or dry-goods logistics) to outmanuever competitors.

Lost in all the hand-wringing over Amazon's massive "factory" warehouses is just how much merchandise they move at low profit margins, helping their suppliers earn *their* profits. Which are typically much larger than Amazon's own profits.

The Bezos quote is most telling; they see they competitors' margin (and overhead) as their competitive advantage so they strive for ever-higher volumes and ever-greater efficiencies in their own operations. And they're always looking for a new angle to old ideas: Prime is really just a new take on Loyalty Card programs, using the video streaming, the ebook lending library, and the free shipping as the key loyalty perks. Their recently-announced digital currency looks to be a digital version of the old Green Stamps. And both are intended to get people to (happily) buy from them.

Tricky dudes.
And their biggest trick is that they work big so they can sell cheap.
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