Archive for amazon

Amazon Is Leaving The Door Open

Posted in Opinions You Would Agree With If You Weren't An Idiot with tags , , on November 11, 2015 by Genius

There was a good bit of discussion on Hacker News about my last post. I feel like a lot of it missed the point.

The main point was that Amazon has left the door open for a competitor to emerge by bad UI, high prices, and possibly a sucky return experience.

A lot of people argued that Amazon saves them time over going to the store and it’s worth it to them. But that’s not really arguing in favor of Amazon, it’s arguing in favor of online shopping in general. If some other online store saved you the same amount of time, but did so at a lower cost and with a better UI (which would save you even more time) and a better return process (which would save you still more time and maybe money) you’d probably switch. The commenters don’t seem to love Amazon so much as hate Wal-Mart, which is an understandable misattribution. 

Many people mentioned Prime, which, like I said, I have had since the beginning. But Prime really isn’t much for shopping these days. It only really applies to orders below the $35 free shipping threshold, everything above that was going to ship for free anyway. People in my area (and, I’d bet, most of the country, given their impressive distribution) without Prime basically get their free shipping items in the same 2 days I do. It’s only useful on cheap things, which is exactly where Amazon is over-priced in the first place.

Go to Newegg and order something. You know what happens? You’ll get it shipped for free and receive it in 2-3 days. There’s no Prime, they just ship stuff quickly and for free. Same with Jet. Same with a number of merchants.

It sounds like some people live in magical places which are somehow 30 minutes away from the nearest big box store but where the UPS store is next door to them, but it doesn’t matter because the guy just comes and takes the item from their door step, packages it, returns it, then places a crisp $20 under their pillow. Good for you. Most of us live somewhere else. And regardless, if they do that for Amazon, they’ll do that for a sufficiently large competitor, so it isn’t a long-term competitive advantage and again you’re arguing in favor of online shopping in general, not Amazon in specific.

Nonetheless, returns are the least of my gripes and were half tongue-in-cheek. I save some time shopping online and I spend less time than that returning things, so it’s a net win in the time and hassle department. And I’m sure it’s neither a big enough problem, nor an easy enough one to solve, that it’s what I would focus on if I were trying to beat Amazon.

What could be a big problem for them, if anyone takes them on, are high prices and a UI that at times seems almost designed to not sell you what you want. Quidsi (Diapers.com, etc.) built a remarkable business by at least solving the UI problem, though Amazon eventually just bought them for a large amount of money. Jet.com (which has former Quidsi execs on its founding team) is taking them on in both regards. Alibaba is planning to do so as well. I am sure others can’t be far behind.

Will any of the particular companies trying this right now succeed? I don’t know. But I think there’s a market opportunity. It’s very similar, I think, to when people thought Yahoo had search locked up in the 1990’s. I don’t know if Amazon’s head is in the game enough to fix it before it’s too late. They might be too focused on making bad Spotify competitors. Time will tell.

What I do know is that as Wal-Mart ascended and started vanquishing their competition, they didn’t raise their prices. In fact, they used their incredible logistics to lower them and kept growing. I see Amazon doing the opposite and I think it’s a big mistake.

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Amazon Kind Of Sucks And We’ve All Just Come To Accept It

Posted in Startup with tags , on November 10, 2015 by Genius

I hate writing this article because I’ve loved Amazon forever. I still remember my cousin telling me about it back when I was in high school. He was staying with me while my dad was out of town. We were browsing the web on our old Compaq (Intel 386 baby!) via AOL dialup (it was a different time, don’t judge) and I wanted to buy a book. He told me about this new site selling them online. It was so much cheaper than bookstores at the time, which had a markup somewhere between excessive and violating the Geneva Convention.

Over time they came to sell more stuff and I started buying it. When they announced Prime, I signed up right away and have never looked back. Yeah, their Netflix and Spotify competitors are pretty mediocre. The UI on everything Amazon does looks like it was designed by Helen Keller. You’d think a company with $90b in revenue could hire one decent UX and one decent UI guy. They’re ugly but they get stuff done.

And maybe that’s part of the charm. It’s like walking into an Aldi. You don’t expect to see reclaimed wood floors and exposed beam ceilings. If you want that, go pay twice as much to shop at Whole Foods. The place looks cheap because it is cheap, and cheap’s sometimes what you want. 

Except the problem with Amazon is, it’s not cheap. In fact, it’s quite expensive. Yes, Amazon prices are still great on some things. Things that have a high dollar density, meaning the ratio of their cost to their shipping weight and size is high. But for anything else, forget it. I was joking with some friend about how I bought a $5 roll of tape there and something else much more expensive, and of course the $5 roll of tape came in a big bubble-wrap filled box, while the expensive electronic item just had a label slapped on it. And my friend said “you know that roll of tape is like $1 at Home Depot right?” Which killed the joke, but turned out to be true.

I started looking around, comparing prices, and found that this is not unusual. Pretty much anything Amazon sells that is also sold at your local big box store costs much more. That wasn’t true a decade ago when I started ordering paper towels and the like. I mean, it certainly makes sense. They’re cheap but large, so the cost to ship them alone is probably close to what you buy them at Costco for.

I’m willing to put up with the fact that Amazon, despite having some of the best programmers in the world, can’t do a simple price sort. Seriously, pretend you just want the cheapest iPad that’s currently made. Go there, type in “iPad”, and search from lowest to highest. I’m too lazy to figure out which page the first one pops up on, because I gave up on page 12. Even if you sort by Apple as the manufacturer, you get a bewildering array of crap that isn’t what you’re looking for. Walk into an Apple store or Best Buy and you can figure it out in seconds.

And half the time, their price sort doesn’t even manage to sort by prices! I think it has something to do with the fact that one item can be sold by multiple vendors at multiple prices. Whatever the reason, it’s confusing.

On top of that, returning stuff to Amazon sucks. Here’s the Amazon return process.

1. Go to site, fill out a form to get a shipping label.

2. Print said form. That’s pretty much all I use my printer for because it’s not 1998 anymore. I even upgraded to a wireless one so I don’t have to plug my damn laptop into it every time I want to return something.

3. I probably threw away the Amazon box. Gotta dig up a suitable one from the pile of spares I have in the attic just for returning stuff to Amazon.

4. Print packing slip, insert in box.

5. Now I have to bust out the old packing tape. You know that stuff always comes out of the little guides on the side no matter how careful you were, so you have to un-stick it. Do so while seething in rage that nobody has yet invented packing tape that doesn’t stick to itself.

6. Shellack that damned label to the box with tape. I don’t have shipping labels for my printer because what am I, FedEx? So I cover it in like 8 strips of tape.

7. Go to whichever shipping service Amazon sent it from because unless you ordered a tiny USB cord, it’s too big to fit into their drop box. It could be USPS, FedEx, or UPS, all of which are located next to the Best Buy where I could have just dropped the damned thing off in way less time and without having to fight a roll of packing tape.

This isn’t Amazon’s fault really. I don’t know what they could do better on the return angle. Maybe they could make a deal with UPS, so people with returns can just come drop the product off in a bin at any UPS store, without having to repackage, and not have to deal with it? Perhaps that’s excessive, I just know that if something isn’t at least $20 I’m probably just going to throw it away due to the hassle.

I’m willing to deal with the fact that a lot of searches are far harder than they need to be because Amazon lets a bunch of sellers list things as iPads that are either iPads so ancient nobody could possibly want them, or iPad accessories. I’m willing to deal with the fact that when I search for something and try to filter by Prime Only, I get lots of results that are in fact not Prime only, despite the fact that Amazon has some of the world’s best programmers but a CS101 student would be failed for that. I’ll even very grudgingly accept the returns process because I don’t know what they can do better, and how often do you return something anyway? They once took back an expensive remote my dog chewed on, so the issue isn’t their customer service policy.

But when everything they sell costs substantially more than I could get it for somewhere else, I start re-thinking my options. Nowadays I just order it from Home Depot or Best Buy or Sam’s Club online and pick it up the next time I’m near one. If you live in suburbia, that’s never long.

I think that’s why Jet.com is doing what it does. If you follow tech news, you’ve probably seen a lot of people laughing about $500m being given to a company that appears to be selling things at a loss.

Amazon’s real advantage, though, and why their pricing has crept up so high, is that they’re the internet’s everything store. People are skipping Google and going straight there. If you spend some time Googling, you can find almost any product Amazon sells sold somewhere else reputable for cheaper. And it’ll ship to you freely and quickly too, they just don’t call it Prime. But Amazon has gotten to the point where people don’t spend time Googling anymore. They just search for stuff they want to buy there.

A legitimate competitor might change that. If Amazon had to face the idea of people looking elsewhere for general purchases, they would be forced to be more price competitive. And maybe they could write a functioning price sort too.

To get from nowhere to an Amazon competitor is going to be very tough. It’s going to require building out a world-class distribution system. It’s going to require spending a lot to get customers in the door. I don’t know that Jet.com is burning $50m a month because they’re doing things the right way, and it’s entirely possible they’ll crash. But I think that if someone does become a serious challenger to Amazon, it’ll have to look a lot like this at the start. 

I sure hope someone gets there, because Amazon has grown to kind of suck, and I’d love to have another option than just accepting it.