Author Topic: AMZN - Amazon.com Inc.  (Read 651033 times)

siddharth18

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Re: AMZN - Amazon.com Inc.
« Reply #180 on: August 02, 2013, 09:41:50 PM »
Warehouses are getting insanely complicated nowadays.  There are trade journals dedicated to operating warehouses.  Unfortunately it's a field I don't understand that well.

Regarding warehouses - have you looked at Kiva Systems Inc? Amazon acquired them a while back and they are currently the leading warehouse solution provider.

The bigger point here I think is that - if Amazon can't beat someone (think Soap.com/Diapers.com Kiva Systems), it will acquire them. Another reason why I think they are at the top of their game.
« Last Edit: August 03, 2013, 11:09:19 AM by siddharth18 »


ItsAValueTrap

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Re: AMZN - Amazon.com Inc.
« Reply #181 on: August 02, 2013, 11:10:58 PM »
It's complicated right?

Apparently these robots can't handle every task (which is mentioned in the article that bashes Amazon in the UK).  So Amazon needs to develop (presumably custom) computer programs to handle a hybrid of the robots and human pickers.

There are other weird things about warehousing.  It's good to have a big warehouse where you have lots and lots of items in your catalogue under one roof.  This way you can handle an order in one shipment (amazon will sometimes break orders up into more than one shipment for various reasons).  But eventually the warehouse gets so big that it takes a long time to go from one end of it to the other.  So then you need to take steps to keep the traveling distances manageable.

The article posted earlier suggests a huge amount of sophistication on Amazon's part.  They are grinding out all these little tiny efficiencies that add up.

2- I really do think that Bezos knows what he is doing.  When it comes to online retailing, scale is an advantage.  Your software development and IT costs are close to fixed.  (*Making software scale for a larger number of users does take a little extra work.  But as your number of users go up, your software development cost per user goes down a lot.)  You get volume discounts for handling lots of sales.  Your brilliance doesn't get watered down with size (unlike investing); size isn't an anchor.  You can get bigger in a cookie cutter fashion- hire more "worker drones", buy more computers, warehousing space, etc.

Another advantage is shipping multiple items in one shipment.  I can buy a kettle and a book at the same time.  This is more efficient that buying a book from one online retailer and a kettle from another online retailer.  The shipping cost of one package is roughly half the cost of two packages (*technically slightly more than half).  Amazon has an "unfair" cost advantage.

I see amazon.com crushing other online retailers for these reasons.
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valueInv

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Re: AMZN - Amazon.com Inc.
« Reply #182 on: August 03, 2013, 09:45:55 AM »
It's complicated right?

Apparently these robots can't handle every task (which is mentioned in the article that bashes Amazon in the UK).  So Amazon needs to develop (presumably custom) computer programs to handle a hybrid of the robots and human pickers.

There are other weird things about warehousing.  It's good to have a big warehouse where you have lots and lots of items in your catalogue under one roof.  This way you can handle an order in one shipment (amazon will sometimes break orders up into more than one shipment for various reasons).  But eventually the warehouse gets so big that it takes a long time to go from one end of it to the other.  So then you need to take steps to keep the traveling distances manageable.

The article posted earlier suggests a huge amount of sophistication on Amazon's part.  They are grinding out all these little tiny efficiencies that add up.

2- I really do think that Bezos knows what he is doing.  When it comes to online retailing, scale is an advantage.  Your software development and IT costs are close to fixed.  (*Making software scale for a larger number of users does take a little extra work.  But as your number of users go up, your software development cost per user goes down a lot.)  You get volume discounts for handling lots of sales.  Your brilliance doesn't get watered down with size (unlike investing); size isn't an anchor.  You can get bigger in a cookie cutter fashion- hire more "worker drones", buy more computers, warehousing space, etc.

Another advantage is shipping multiple items in one shipment.  I can buy a kettle and a book at the same time.  This is more efficient that buying a book from one online retailer and a kettle from another online retailer.  The shipping cost of one package is roughly half the cost of two packages (*technically slightly more than half).  Amazon has an "unfair" cost advantage.

I see amazon.com crushing other online retailers for these reasons.

- Their digital good revenue including books, music, movies (30% of total, IIRC) are vulnerable to the likes of Google, Apple and Netflix.
- Their device revenues which include the Kindle devices are vulnerable to Google and Apple.
- They are probably going to be introducing a smartphone and a set top box which means those revenue streams will be added risk too
- Their cloud business is in the midst of a price war and is vulnerable to Google, Microsoft and others.
- Part of their retail business is vulnerable newer business models that are gain traction including Fab.com, One Kings Lane, Gilt Group, Ideeli and others.

The part that is protected by their scale moat is what is left.
« Last Edit: August 03, 2013, 09:53:27 AM by valueInv »

Liberty

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Re: AMZN - Amazon.com Inc.
« Reply #183 on: August 04, 2013, 11:56:26 AM »
"Most haystacks don't even have a needle." |  I'm on Twitter  | This podcast episode is a must-listen

ajc

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Re: AMZN - Amazon.com Inc.
« Reply #184 on: August 07, 2013, 09:08:51 AM »
In defense of Amazon and Jeff Bezos

FORTUNE -- The news Monday that the Washington Post has been purchased by Jeff Bezos, the founder and CEO of Amazon (AMZN), has launched hundreds of stories and tweets -- including Andy Borowitz's Amazon Founder Says He Clicked on Washington Post by Mistake.

Nothing gets the chattering classes chattering like the sale of a storied newspaper -- especially when it follows so closely the sale of two other name brand journalistic outlets, Newsweek and the Boston Globe.

But of those hundreds of stories, the piece that is most relevant to Apple investors is the one by Michael Moritz, the former Time correspondent who wrote The Littlest Kingdom, the first inside story of Steve Jobs' Apple, and went on to become one of Silicon Valley's most successful venture capitalists (Google, Yahoo!, PayPal, YouTube, etc.).

As readers of this column know, Amazon is one of the companies most often compared by investors with Apple and found wanting.

Moritz uses Bezos' WashPo purchase as an opportunity to set those Apple investors straight...


http://tech.fortune.cnn.com/2013/08/06/apple-amazon-bezos-moritz/ (the Fortune article)



and the aforementioned 1,700 word Michael Moritz (Sequoia Capital, Chairman) piece,

Stop The Presses: A New Media Baron Appears

http://www.linkedin.com/today/post/article/20130805231302-25760-stop-the-presses-a-new-press-lord-appears

Grenville

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Re: AMZN - Amazon.com Inc.
« Reply #185 on: August 07, 2013, 10:17:51 AM »
In defense of Amazon and Jeff Bezos

FORTUNE -- The news Monday that the Washington Post has been purchased by Jeff Bezos, the founder and CEO of Amazon (AMZN), has launched hundreds of stories and tweets -- including Andy Borowitz's Amazon Founder Says He Clicked on Washington Post by Mistake.

Nothing gets the chattering classes chattering like the sale of a storied newspaper -- especially when it follows so closely the sale of two other name brand journalistic outlets, Newsweek and the Boston Globe.

But of those hundreds of stories, the piece that is most relevant to Apple investors is the one by Michael Moritz, the former Time correspondent who wrote The Littlest Kingdom, the first inside story of Steve Jobs' Apple, and went on to become one of Silicon Valley's most successful venture capitalists (Google, Yahoo!, PayPal, YouTube, etc.).

As readers of this column know, Amazon is one of the companies most often compared by investors with Apple and found wanting.

Moritz uses Bezos' WashPo purchase as an opportunity to set those Apple investors straight...


http://tech.fortune.cnn.com/2013/08/06/apple-amazon-bezos-moritz/ (the Fortune article)



and the aforementioned 1,700 word Michael Moritz (Sequoia Capital, Chairman) piece,

Stop The Presses: A New Media Baron Appears

http://www.linkedin.com/today/post/article/20130805231302-25760-stop-the-presses-a-new-press-lord-appears

Thanks for posting both.

Liberty

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ajc

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Re: AMZN - Amazon.com Inc.
« Reply #187 on: August 10, 2013, 11:11:22 AM »
http://www.fastcompany.com/3014817/amazon-jeff-bezos

A rose-tinted, but at the same time pretty interesting piece about Amazon Fresh and the potential future prospects for the company (and retail industry) as a whole.
 
The writer interviewed Jeff Bezos for it, so a fair amount of his perspective is represented here and some of it is frankly quite awesome.

Based on this, I'm starting to wonder if UPS/FedEx might perhaps be a smart way to bet on the disruptive changes taking place in retailing.

ItsAValueTrap

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Re: AMZN - Amazon.com Inc.
« Reply #188 on: August 10, 2013, 12:10:53 PM »
The trend towards more online shopping has been going on for several years, yet it doesn't seem to have helped UPS or Fedex become crazy profitable.  Look at the performance of UPS, Fedex, and Amazon over the past several years.

I think the wealth will mostly go to Amazon and Google (companies that sell goods and services online often advertise on google; some of these things can't be sold through amazon).  Ebay may do ok.  I think a lot of online retailers will be hurt badly by amazon... if they don't have a niche, amazon will steamroll them.
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Re: AMZN - Amazon.com Inc.
« Reply #189 on: August 17, 2013, 03:22:25 PM »
More about AmazonFresh, this time from NYC.


Amazonís Secret Plan to Sell You Everything!

"Something strange is happening in the township of Woodbridge, New Jersey, just 20 miles outside of Manhattan. It started when a real estate development partner of Amazon.com purchased a nearly one-million square foot warehouse. The previous tenant was a grocery wholesaler and so the building is equipped with refrigeration. Now Amazon (AMZN) has quietly posted job listings for facility and operation managers in the area.

Last week a research analyst put the pieces together and came to the conclusion that Amazon.com is going to expand AmazonFresh into New York City. That means Amazon.com will be taking orders and providing same-day delivery to the nation's largest market. That may not mean much yet, but it suggests that the way eight million people buy groceries is about to change forever..."


http://finance.yahoo.com/blogs/breakout/amazon-secret-plan-sell-everything-113211742.html