[mostlyListening]

Amazon's advantage are mostly -though not entirely- in the superb logistics that allow them to undercut competitors' prices. Beyond low prices, there is not much that is unique and can't be duplicated.

I think GE at its prime had more intrinsic advantages and unique technologies than just superb logistics.

[leef]

While superb logistics are not unique to Amazon it is just one factor that combined with other mostly non-unique factors creates a very unique and hard to duplicate advantage:

1) The marketplace - Amazon's website are massive marketplaces with tons of sellers, millions of customers, tons of reviews, etc. 2) Third party seller network - Amazon has thousands of people that sell on its site. This results in lower prices, more selection, and more money for Amazon when they take their cut. 3) Fulfillment - Yes Amazon has logistics but it also has Fulfillment by Amazon. Third party sellers can send Amazon their inventory. Amazon charges them 'rent' for this. Plus Amazon does not have to take inventory risk on that item yet it is still available to customers 'within 24 hours'. And to top it off Amazon still gets their cut of the sale.

And the one ring to bind them all: 4) Prime - a shipping subscription to keep people looking at Amazon before anyone else.

Any one of these alone is a great thing to have and several companies do -

Ebay and Craigslist have a marketplace and third party sellers but they don't have a fulfillment network. This fundamentally limits the customer experience they can achieve.

Walmart has a marketplace and a fulfillment network but their third party network is in its infancy. It will take years to work out how they merge catalogs and can deal with fraud issues and the like.

FedEx and UPS have fulfillment and programs to store your inventory but they lack the marketplace to sell on. UPS customers will still end up selling on Amazon giving Amazon a cut of the sale. Plus using Amazon's fulfillment gets your inventory available to customers faster and usually results in more sales.

Prime is a major competitive advantage that pretty much no one else can offer. You aren't going to buy a subscription to Barnes & Noble or Best Buy. I've heard of some companies trying to band together and offer a shipping subscription. I'm doubtful that without very tight integration they can make that profitable.

That isn't to say no one can catch up (Walmart is probably the closet) but I think we're looking at decades of dominance.

[hendzen]

Great point. I have been a prime subscriber since my freshman year of college. They offered anyone with .edu email address a free year, and I bit. When my year ran out, they offered me a second year at half price. Now I probably spend at least $100 on Amazon a month on various things - and free 2 day shipping makes it even more attractive.