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by phil21 3050 days ago
> This spree of Amazon getting into markets that are already at near-perfect competition levels

Is this true? Retail shipping is not nearly that competitive, at least from a very naive consumer standpoint looking in.

Amazon can ship stuff at 20-30% of the cost I would pay as a small business to UPS. Using UPS.

Seems like there is a ton of margin there to be captured.
1 comments
ashelmire 3050 days ago
Shipping is very competitive. These are some of the most seasoned and efficient businesses, by necessity, in the world.

If Amazon is shipping things cheaper, it's because they are using it as a loss leader. You don't really think it costs them $0 to ship things, do you?

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phil21 3049 days ago
> If Amazon is shipping things cheaper, it's because they are using it as a loss leader. You don't really think it costs them $0 to ship things, do you?

No, I'm specifically talking about actual dollars paid to UPS. I run (ran) a small business, and we shipped about a pallet or two (overall) a week. Amazon's leaked UPS rates a few years back were about 30% of our already heavily discounted (from what a retail customer would pay) rates. Where did the $0 shipping comment come from?

You also can commit to a spend with Fedex/UPS of relatively small amounts (4 figures/mo) and get an immediate and painless 25-40% off immediately.

Like I said there is a lot of margin there, at least in certain segments of the business. I'm just not sure how much or where exactly the costs are (there may be very legitimate reasons why serving Amazon costs less than half of serving me) to know if there is a retail cost play.

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