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Amazon Prime Is a Blessing and a Curse For Remote Towns (vice.com)
An anonymous reader quotes a report from Motherboard: If access to Prime is reduced, or in some cases, cut off, it can leave many remote towns in the lurch. One dozen five-gallon barrels of hydraulic oil. A 2x4x8 of lumber. A pallet's worth of 10-ply, heavy-duty truck tires. These are just a few of the heavy, cumbersome orders one Redditor on the Alaska subreddit claimed to have ordered from Amazon Prime, with free shipping, before users started to notice difficulty finding eligible products. For many remote and rural communities in the U.S. and Canada, the arrival of Amazon Prime, with its low prices and free, expedient shipping was a boon. Hard-to-get or expensive products were now accessible, and reasonably priced to boot. For the cost of a membership (which now runs $99 per year), residents were able to get deals on everything from food to diapers to truck tires. But sometimes when something seems too good to be true, it is. Prime has proven to be a bit of a double-edged sword for many of these communities. Residents become dependent on Prime as local retailers struggle to compete. If access to Prime is reduced, or in some cases, cut off, it can leave many remote towns in the lurch.
So what happens to many remote towns if access to Prime is reduced, or in some cases, cut off?
Anyone else remember the song about the "Wells Fargo Wagon" from 76 Trombones? That was the end result of a remote order business hooked up to a rail-backed transportation system.
See also "Sears Catalog Home":
https://en.wikipedia.org/wiki/Sears_Catalog_Home
The sorts of things they citing here are prohibitively expensive on Amazon... a 2x4x8 of poplar (didn't poke around long enough to see SPF pine) is around $70 for which I would expect the whole flitched tree. For smaller things that hardware stores can usually wring you for I can see why Amazon is competitive but the examples here seem odd. I've not found anything bigger/heavier than a large sack of dog food that was price competitive.
This is an old trick: sell goods/services below their cost until you drive out competition. You have to swallow some massive losses at first, but in the end you'll secure yourself a monopoly.
It's not free. The price is still paid by the purchaser, it's just baked into the item cost. Same as when a restauarant gives "free" delivery. If they were to itemize the cost you'd see that you're still paying the delivery fee it's just not a separate fee.
>> There's no way Amazon didn't loose money on that.
Read these articles to learn about how/why Amazon does this:
https://www.fool.com/investing/general/2016/03/25/how-prime-makes-amazon-profitable.aspx
http://ben-evans.com/benedictevans/2014/9/4/why-amazon-has-no-profits-and-why-it-works
http://time.com/4084897/amazon-amzn-aws/
In other words, they seem to cover the cost of the occasional dick move (which I'm guilty of too occasionally) by soaking the suckers who overpay for Prime memberships (i.e., who don't fully use their benefits - many subscription models like gyms are also based on this). Then they float in money from their insanely profitable cloud services to make Wall Street happier about the low profitability of their ecomm business, and to keep fueling marketing expansion.
I think someday (dunno when), there will be "peak Amazon" when other competitors (e.g., Walmart) finally figure out how to leverage local store-based distribution and logistics, draining all profits from the retail side and causing it to spin off some weaker bets. I think we also need to keep an eye on Google's cloud platform, which appears to do everything Amazon's cloud does only better and cheaper, and could put a big dent in Amazon's cloud cash cow.
Years ago, not long after becoming a Prime member, I was renting a cottage in a very remote location in the middle of a national forest for a couple weeks. This location was without mail delivery. Population density of the county is maybe two dozen per square mile, so not the sparsest but fairly low density.
I ran an experiment, set that as my main address in Prime, and ordered something (I don't even remember what.) Imagine my surprise two days later when I heard the delivery truck hustling down the country road 4 miles away!
If only that place had consistent, reliable internet service (Verizon worked if you held your phone just right in certain places and the cottage was equipped with Wild Blue? satellite internet) I could see setting up shop semi-permanently, provided I could find a job that allowed me to work remotely.
But I was always concerned about dependency on delivery service, it seemed like a fluke that it worked, there's no way that was economically viable for Amazon.
Couldn't you come up with a story about how you did that instead?
I know this is shocking... sometimes the whole world doesn't revolve me.
https://www.washingtonpost.com/archive/politics/1990/07/30/parcel-post-paying-the-freight-for-alaskans/467be7cf-8962-41b2-804a-6e31c5e14d34/
Really.
When you buy that amazing $9.99 doohickey from Amazon, the actual cost to them was closer to $2, with a couple of bucks per package for the actual shipping cost. A $400 graphics card probably cost them $300, but didn't cost much more than the $9.99 item to ship. Yeah, they're going to have "loss leaders," especially in those remote shipping areas, but they can afford a short-term loss on some items because they make so much money on the rest. They do notice that they're losing money on the "ship a ton for nothing" items - but they take care of that with a simple "no free shipping to X location."
The thing is, Amazon finally noticed that, due to the effects of not having to pay quite so many people, they can actually sell that cheap gadget for less than a typical store, even to semi-rural areas.
Manufacturer -> marketing to wholesalers -> wholesaler -> marketing to sellers -> seller's warehouse -> seller's stores -> stock in store -> you
(Wal-Mart cut out a lot of this, which is why they're cheaper)
Manufacturer -> ship to Amazon -> ship to distribution center -> ship to you
(marketing went from "paying dozens of people to sell our product" to "paying a couple of people to work on the Amazon page content")
When you cut out so many marketing and handling and stocking steps, things cost less.
Actually, the story is telling a very different story. Amazon Prime endangers local stores. They will close shop, making you fully dependent on Amazon Prime in the end. Which is of course when they'll yank that carpet out under your feet and charge you through the nose for ... well, anything you might want or need.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
I ordered a water heater via Prime this year. Saved a good amount of money on the heater itself, and got the free shipping where every big box in town wanted to charge >$50 to deliver one. That one transaction payed for half a years worth of the prime membership.
Slashdot still doesnâ(TM)t support Unicode after it was added to the HTML standard in 1997.
So, basically, If there are any local businesses which haven't already been destroyed by Safeway or Walmart or Target, Amazon Prime will finish them. Got it.
I'm not actually that glib... the loss of local businesses has negative consequences. But let's not pretend that Amazon started this process.
#DeleteChrome
According to TFA, problem is that once inefficient purveyors (ie local retailers) are driven out by Amazon, locals are fucked over when Amazon decides it isn't worth their dime shipping to the sticks anymore.
Once available locally at price X -->
Next available via Prime for X - Y -->
Now available nowhere
It's undercutting the competition in order to let the locals starve... perhaps not Amazon's original intent, but a potential dark outcome for those who live in remote parts.
Yes, it is expensive to transport goods to remote areas. However, and I'm sure you've seen this too, price gouging most definitely occurs, far beyond the additional expense due to transportation. Little shops in the middle of nowhere have a monopoly, and it is often abused as goods can be double the price and more compared to what you'd pay in a regular supermarket or store like Walmart. I've also literally seen signs in tiny country stores that said the likes of "If you don't start buying your milk here then we will have to stop carrying it and it won't be available locally in case you need it."
I'm just throwing this out there off the top of my head, but one thing that might work is for Amazon to partner with small rural stores. If the customer picked up their order at the store then there could be a slight discount, because Amazon would save on that final mile of delivery which is the most expensive. Amazon could then evaluate what that community is purchasing most often and then allow the store owner to keep an inventory on hand of those items. The local merchant would then get some percentage of the sale of those items. Of course that also brings customers into their store, increasing the likelihood of purchasing other items as well.
However, I doubt the Ruth-Anne type would go for having a big corporation like Amazon working their tentacles into their business. Bonus points if you know who I'm talking about. :)
Better known as 318230.
Amazon Prime does more for northern food security than federal subsidies, say Iqaluit residents
Amazon is the new Walmart, it's been happening for decades just with a different store name.
At a certain point if all local competition is forced to close and Amazon yanks that carpet out, some local entrepreneur will find a way to purchase goods in bulk and sell them cheaper than Amazon but still at a profit. There will be some growing pains but I think this is a case where competition can never be completely removed and prices will remain reasonable.
"Action without philosophy is a lethal weapon; philosophy without action is worthless."
Why the hyperbolic anger???
1. The shipping is being done at a loss. The local provider is not being inefficient; the seller is basically subsidized by Amazon. This subsidy can be pulled at any time, once Amazon decides to tighten the rules on renewal.
2. We're talking about small communities where there may not be that many jobs available. The loss of three of four jobs out of a labor pool of 20-30 people is a major blow. Furthermore, the money that kept in the local shops is now being sent out of the community, leaving even less money available locally.
3. The loss of one local business that goes under may cause issues to other local businesses that depended on it.
And it was the Music Man. 76 Trombones was one of the songs. God I'm old.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
You're paying $100 a year for that "free" shipping. Plus there's usually a profit margin on each item.
Will Amazon occasionally find that there are some customers that cost more than $100 a year? Obviously. Will Amazon find that across their entire Prime membership, the average will ever go above $100? Doubtful. Most of us buy an item from Amazon one or twice a month - given the volumes involved across all of Amazon's customers, I doubt we're getting close to half of that subscription price.
If you doubt this, look at the fact Amazon has been expanding the Prime benefits ever since it started. We get free video, free music, storage, and some deliveries are now one day instead of two. How is it able to afford to do so?
You are not alone. This is not normal. None of this is normal.
Actually, nope.
In many, many remote places, high-speed Internet is a bit, shall we say... curtailed. Most of my 'neighborhood' in the Oregon Coastal Range has exactly one option for anything faster than dial-up: Satellite Internet. Mind you, Sat Internet almost always comes with bandwidth caps, so doing all your shopping on Amazon (let alone 'cutting the cord') is either a no-go, or gets expensive as hell (best deal I've found is Exede, which costs $170/mo. for a soft 30GB cap.)
Even with slightly inflated prices (due to transport costs), the nearest stores (20 miles off from my house) are *still* cheaper than paying $170/mo + $10/mo for Prime + 2 days waiting for stuff to arrive. Don't get me wrong, Amazon is still useful out here, but not for day-to-day things.
I won't even go into heavy detail in describing the nightmare of using only Amazon for ordering stuff like lumber, bulk livestock feed/supplies, gasoline/diesel, mulch and/or topsoil (think 50 bags or more at a go), gravel (10 cubic yard was my last order), propane (hint: we use more than a puny 5 gallon tank each year), vegetables (where folks almost always want to see and touch it before buying), etc.
Quo usque tandem abutere, Nimbus, patientia nostra?
As small towns get smaller there are fewer employees to work in these shops thus increasing pressure on wages which increase costs.
It is a vicious cycle, that has no real solution.
Actually, it does: people need to abandon these small towns and move someplace more sustainable. The small-town lifestyle is not sustainable, and only works when it's being subsidized by the cities. Most of these dying towns don't have any real industry left anyway, so it's time for the people there to pack up and leave. 100+ years ago, this is exactly what happened, which is where there's a bunch of "ghost towns" in the western US (most of these are nothing more than some building foundations now, if that): when the local mine petered out, there wasn't any help from the state or federal government to keep the people living there from starving, so they packed up and moved out. This is what we should be doing now, except these days it'd be nice for the government to give poorer people a little temporary assistance to aid the transition to someplace with a stronger economy, but the end goal should be shutting these little towns down if they're no longer economically viable on their own.
You'd be surprised. BP (Before Prime) people used to fly to one of the (four) 'large' cities (Anchorage, Fairbanks and to lessor extents Juneau and Ketchikan), go to the Walmart / Costco / etc and fill up an small airplane or part of a barge and ship a year's supply of stuff home. Some even go to Seattle and barge stuff up.
In the two years or so before Amazon wised up, you could do this from the safety and comfort of your own Tyvek strapped shack anywhere you had a Post Office and an Internet connection. Good times. I just loved the looks at the Post Office when you had six 40 pound bags of dog food to pick up. And so did your neighbor. Benjamin Franklin would have been .... confused.
The small-town lifestyle is not sustainable, and only works when it's being subsidized by the cities. Most of these dying towns don't have any real industry left anyway, so it's time for the people there to pack up and leave.
That seems rather simplistic, since cities are not self-sustainable at all - they're entirely dependent on products and supplies from the outside. Wall off a city, and people there will starve really fast. Wall off a farming community, and they'll probably last a while.
There is a balancing act at play here. You need some percentage of your population to work the farms needed to feed everybody. You can certainly talk about automating much of that... but frankly most city jobs are capable of being automated away as well.
#DeleteChrome
It's not a scam; the people were simply playing the game by the rules that were set up for them. Blame the Mint for selling dollar coins below cost: whenever you sell something and accept a credit card, you're paying a ~3% fee to Visa/MC for the privilege of accepting that card and getting payment that way. So the US Mint was selling $1 coins for roughly $0.97 each. That's where the free frequent flyer miles were coming from. If they had sold the coins for $1.03 each, this wouldn't have happened.
Amazon is the new Walmart, it's been happening for decades just with a different store name.
That is not correct. Amazon is the new Sears. Sears grew to tremendous power via mail order catalog - exactly the same as Amazon with just a different method of initiating an order is all. Sears was an unbelievably huge company. They built the tallest building in the world (at the time). They had $1 billion in sales in 1945 (non-adjusted currency). In 1960 one in three Americans had a Sears credit card. 1 in every 200 workers in the country worked for Sears.
Anyone scared Amazon is going to destroy X, Y and Z needs to recall that we've already been down this path with Sears before.
Better known as 318230.
Let's not forget Amazon Fresh, which is next level grocery shopping. Have you heard of Prime Now? They delivered diapers to me while I was in Disney World and saved my marriage.
If your spouse can't handle the fact that sometimes you shit your pants, they don't really love you.
Amazon is a boon for rural folk. There are NO stores in our town.
Drive further to the next towns beyond that and there is only an expensive gas station with a very limited and high priced selection chips, soda, milk, candy, ice cream, etc.
If you drive for about 60 minutes round trip there is a town with limited selection of goods in stores, a hardware store, a lumber yard, a few restaurants and grocery store.
My purchases on Amazon are not taking dollars away from local stores, not even stores within an hour of me. Rather I'm buying things I simply can _NOT_ buy here. I would have to drive another hour to get even a quarter of the things I get on Amazon and even then there are many things I simply could not get.
This is very common in rural areas. Urbanites, who make up most of Slashdotters, don't understand this so they are not likely to appreciate just how wonderful Amazon is for rural folk.
The other issue on this topic is that many people seem to think that Amazon is some monolithic seller. Amazon is not. Amazon is more like a mall filled with many small and larger sellers. Amazon helps some of those sellers with fulfillment but most of all Amazon offers search features, product description and reviews. All of these are valuable and NOT available through local or even regional stores in the brick-and-mortor world.
How's life in the hypocrite lane?
Douche bag is upset that Amazon no longer chooses to subsides his expensive....
.... you're a fucking idiot.
"to subsidize" (or "to subsidise", depending on your location).
There, FTFY, you fucking idiot.
The small-town lifestyle is not sustainable, and only works when it's being subsidized by the cities. Most of these dying towns don't have any real industry left anyway, so it's time for the people there to pack up and leave.
There is a balancing act at play here. You need some percentage of your population to work the farms needed to feed everybody.
Isn't it down to something like 1% now?
Don't assume agriculture is the only good or service rural areas provide. It's a LOT more complex than that. Water, for example, is often provided by rural areas. Power as well, especially in those areas serviced by hydroelectric. Large military bases are often located in rural areas - in the USA the military is an important path out of poverty for many people, many of whom come the cities, which means the rural areas effectively supplement the welfare programs of the cities. Similarly, many former city dwellers retire to the rural areas, which allows people to retire with less money due to the lower cost of living - that in turn makes more money available to the city government and economy before these people retire. Another big rural economic product is support for vacations and tourism, allowing city dwellers to escape from the stress of city life. Rural areas also provide education and child care in the form of camps for the children of city dwellers.
Yet anther big group of rural products is wood and mining products. A fair amount of refining and manufacturing takes place in rural areas as well - it's often more cost effective to do this closer to the source of the raw materials, rather then in the cities. Then there's science, a fair amount of which has to be done in rural areas by the nature of the task (examples include agricultural research, many aspects of environmental science, geology, atmospheric science research, even mundane things like monitoring the water being pumped into the cities). Presumably nobody will question that science is of value to city dwellers, at least over the long term. All this means people are needed in rural areas, at least part of the year - more than just farmers.
Another thing to think about: once you take into account all of these goods and services, you need some way for city dwellers to take advantage of them. This means a transportation infrastructure - bridges, roads, rail, canals, motels, restaurants, rest areas, and so forth. Agriculture also requires some of this infrastructure - in addition to the irrigation infrastructure (dams and so forth) required to support crops. You also have infrastructure for water transport (piping it into the cities), and power transport. All this needs to be maintained - and that means you need people living in rural areas near the things being maintained, since otherwise the maintenance won't be cost effective.
Just like their urban counterparts, the people in rural areas need schools, markets, hospitals, law enforcement, coast guard, and so forth, which means you need even more people. Often, of course, you don't need a lot of people in any given location, which means you tend to end up with a lot of small towns. The small town lifestyle is a sustainable lifestyle so long as the cities continue to need the goods and services produced by (or moving through) particular rural areas.
There are two ways infrastructure can be paid for: one is by higher prices in the market, and the other is government taxes. A lot of people mistakenly believe that urban areas are subsidizing rural areas. That's generally a myth: what's really happening is government taxes are being used to lower the prices city dwellers would otherwise have to pay in the market for the goods and services provided by the rural areas. If farmers, for example, had to pay for all the costs of the transportation network needed to bring goods into the cities (instead of the government), the cost of food would go up and city dwellers would pay an increased