Author Topic: AMZN - Amazon.com Inc.  (Read 554739 times)

rkbabang

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Re: AMZN - Amazon.com Inc.
« Reply #2200 on: November 01, 2018, 08:21:24 AM »
Oh no, they are going to the mattresses.

It must be a huge market. It looks like Mattress Firm has a store (or sometimes 2) on every street in every city in America.


Jurgis

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Re: AMZN - Amazon.com Inc.
« Reply #2201 on: November 01, 2018, 08:27:08 AM »
Godfather says hi.
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JRM

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Re: AMZN - Amazon.com Inc.
« Reply #2202 on: November 01, 2018, 08:31:38 AM »
Oh no, they are going to the mattresses.

It must be a huge market. It looks like Mattress Firm has a store (or sometimes 2) on every street in every city in America.

I'm curious how any Amazon shareholders rationalize this kind of business practice as good.  They would rather undercut 3P retailers selling mattresses on their platform (likely AWS or potential AWS customers as well) and instead sell low margin mattresses.  It seems like the former is a better business model (higher margin) and wouldn't be viewed by the regulators as anti-competitive. It's like Amazon is trying to not make money.

I know the online mattress companies typically have a sales portal through their website as well, but most people go straight to Amazon to check reviews.

Liberty

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Re: AMZN - Amazon.com Inc.
« Reply #2203 on: November 01, 2018, 09:22:09 AM »
Oh no, they are going to the mattresses.

It must be a huge market. It looks like Mattress Firm has a store (or sometimes 2) on every street in every city in America.

I'm curious how any Amazon shareholders rationalize this kind of business practice as good.  They would rather undercut 3P retailers selling mattresses on their platform (likely AWS or potential AWS customers as well) and instead sell low margin mattresses.  It seems like the former is a better business model (higher margin) and wouldn't be viewed by the regulators as anti-competitive. It's like Amazon is trying to not make money.

I know the online mattress companies typically have a sales portal through their website as well, but most people go straight to Amazon to check reviews.

To know we'd have to know more variables. If they think they can sell a lot more Amazon brand mattresses than the 3P vendors would because of the lower prices and because of the brand, then the lower margins can be compensated by turnover.

I just had a quick look at the margins of Purple, one of those mattress startups, and right now they're at 44% gross margins, up from the 23% in 2015 (so I don't know if they'll keep rising). Seems like there's a bunch of "your margin is my opportunity" in there for Amazon to have really good prices yet keep pretty high margins, especially if they know they can get to scale really quickly because of the existing transferable brand recognition and distribution.
« Last Edit: November 01, 2018, 09:56:47 AM by Liberty »
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walkie518

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Re: AMZN - Amazon.com Inc.
« Reply #2204 on: November 02, 2018, 07:07:59 AM »
Oh no, they are going to the mattresses.

It must be a huge market. It looks like Mattress Firm has a store (or sometimes 2) on every street in every city in America.

I'm curious how any Amazon shareholders rationalize this kind of business practice as good.  They would rather undercut 3P retailers selling mattresses on their platform (likely AWS or potential AWS customers as well) and instead sell low margin mattresses.  It seems like the former is a better business model (higher margin) and wouldn't be viewed by the regulators as anti-competitive. It's like Amazon is trying to not make money.

I know the online mattress companies typically have a sales portal through their website as well, but most people go straight to Amazon to check reviews.

To know we'd have to know more variables. If they think they can sell a lot more Amazon brand mattresses than the 3P vendors would because of the lower prices and because of the brand, then the lower margins can be compensated by turnover.

I just had a quick look at the margins of Purple, one of those mattress startups, and right now they're at 44% gross margins, up from the 23% in 2015 (so I don't know if they'll keep rising). Seems like there's a bunch of "your margin is my opportunity" in there for Amazon to have really good prices yet keep pretty high margins, especially if they know they can get to scale really quickly because of the existing transferable brand recognition and distribution.
foam is very cheap

one hopes there isn't an off-gassing scandal as cost-cutting becomes the primary lever for the companies with less scale...

Liberty

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Re: AMZN - Amazon.com Inc.
« Reply #2205 on: November 05, 2018, 09:49:22 AM »
Free shipping for everyone in the US during holiday shopping this year:

https://www.businesswire.com/news/home/20181105005293/en/Amazon-Expands-Free-Shipping-Holiday-Season/
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dwy000

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Re: AMZN - Amazon.com Inc.
« Reply #2206 on: November 05, 2018, 11:36:15 AM »
Wonder how much of that was offense in getting people to use the platform and hope they stick around, vs defensive in that Walmart is very aggressively marketing free 2 day delivery with no membership fees.   If my Prime membership was coming due over the next month or two I'd hold off until January to renew.

Liberty

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Re: AMZN - Amazon.com Inc.
« Reply #2207 on: November 05, 2018, 11:49:45 AM »
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Liberty

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Re: AMZN - Amazon.com Inc.
« Reply #2208 on: November 05, 2018, 11:54:14 AM »
Wonder how much of that was offense in getting people to use the platform and hope they stick around, vs defensive in that Walmart is very aggressively marketing free 2 day delivery with no membership fees.   If my Prime membership was coming due over the next month or two I'd hold off until January to renew.

I'm sure there's some of that too. Retail has always been a competitive business, but in this case, what Amazon and Walmart and maybe a few others can do, not many others can do nearly as easily.

In cloud there's more than enough TAM for AWS, MSFT and GOOG. In retail, there's more than enough TAM for AMZN, WMT, COST, etc. Tiny niche players can do well by specializing at being the best at their niches. It's those in the middle that should get the squeeze.
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Jurgis

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Re: AMZN - Amazon.com Inc.
« Reply #2209 on: November 05, 2018, 12:02:50 PM »
If my Prime membership was coming due over the next month or two I'd hold off until January to renew.

I would not. Prime now has tons of other benefits that I'd lose if I did not renew.
"Before you can be rich, you must be poor." - Nef Anyo
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