[confluence]

If you're talking about warehousing/logistics - that is true.

However they only did it because they had to reduce costs and simplify processing. I'm pretty sure Amazon would be much happier to just dropship by making an API call to third party logistics - which is essentially an inventory database from Amazon's point of view - but they are just too big now.

I think they still do that with long tail items (don't store, but use third party logistics with an API call).

[katbyte]

Would not having a 3rd party handle the logistics cut into their profit margins? I would assume because they do it in house and at such a large scale they save money vs hiring a 3rd party that would want their own cut raising logistic costs.

[confluence]

Yes. They did that at the beginning, but since they scaled up they have brought a lot of it in house.

I was addressing the fact that even though they did logistics/warehousing, I still believe them to be a database frontend (inventory/customer/credit cards), and I disagree with the above statement:

> However, I'll disagree with Amazon.com. Purchasing real world products is much more than just a database frontend.