Fri, February 4, 2005
Priming the Pump
I've had my frustrations with Amazon.com. They're far from perfect, and they've experienced some real growing pains as they tried to turn their revolutionary business model into a profitable one. But it can't be denied that they changed the face of online shopping, and in many ways they provide a convenience that simply can't be equalled elsewhere. (Imagine having to wait 3-6 weeks while your local book store "special orders" some obscure title. There's an 89% chance that Amazon already has it in one of their cavernous warehouses full of shelf-stocking robots and package-shipping droids. And you can order it on the same invoice as snow tires and an iPod and some baby clothes.)
Lately, one of my chief frustrations has been shipping. Early on, Amazon was an excellent alternative because they didn't charge sales tax, and their prices were so low that even with the shipping cost it was cheaper than going to the record store or DVD store. Then they decided it wasn't enough to be the biggest online retailer: they wanted to turn a profit. Prices went up, and suddenly the only way to come out ahead was to combine orders and take the cheapest, slowest shipping option. I started buying DVDs at Best Buy or the Virgin Megastore. For a dollar or so more (six dollars at Virgin), I didn't have to wait for things to make their way across the country to me.
Then, Amazon introduced free "Super Saver" shipping. On orders of $25 or more (most orders of more than one item) you could skip the shipping cost if you were willing to wait a little longer to receive your order. For orders that weren't time-sensitive (gifts, DVDs it would be weeks before I had time to watch anyway), it was an okay deal. The problem was, I couldn't tell exactly what the reason for the delay was. You were saving by not paying for expedited shipping, but what were you getting? Were they simply putting your order at a lower priority for shipping out of the warehouse? Were they shipping it on a later day? Or were they holding up its shipment to encourage you to use one of the faster, costlier shipping options? For a while, it seemed like the first answer was correct: they gave the order a lower priority, so it might still leave at the same time as it would've if you'd paid for regular ground shipping, or it might leave later if they had other, higher priority items going out that day.
Then a few orders arrived really slowly, and it began to seem like the latter answer was correct. The delivery estimates got really long on simple orders and it seemed as though Amazon was packing up the item and then hiding it on a back shelf for a few days, to make the other shipping options seem more attractive. For me, it came to a head with the Indiana Jones DVD box set. I pre-ordered it from Amazon, and selected Super Saver shipping. When the release date came, their delivery estimate told me to expect it in around six weeks. That wouldn't stand. I went to the website to cancel the order and I was told it couldn't be canceled because it had already been prepped for shipping. What?! It wasn't being shipped for weeks! I called them – as usual, the phone number to talk to an actual human rather than sending e-mail was buried and impossible to find – and they said there was no way to cancel the order; I should just mark it refused and send it back for a full refund. I went to Best Buy and grabbed my DVD set off the top of a pile of dozens.
The next day, the Amazon package showed up. So, in a way, they were heroes. The order arrived six weeks early. But the problem is that the system is so screwed up that they can't accurately tell me what to expect. This is just like the problem with the Best Buy "Gotta Have It" store pickup glitches, or the Amazon Associates cancellation process – all the best intentions can't overcome a system that's been designed sloppily. I'd almost prefer slower, more reliable delivery estimates rather than packages which arrive six weeks early. With the six-weeks-early package, I never know what to expect when I see the delivery estimate on my next order. Plus, the whole "we can't cancel an order that's six weeks out" thing just threw me into a frenzy. So I went nuts and told everyone I knew to never order from Amazon again. I went a few months without ordering from them, too. But I crumbled, as I often do. Sometimes you have to turn to Amazon – even with the steep shipping costs and slow shipping times – to get something you can't find at a local store. (I almost had to use them to get the Wonderfalls DVDs.) When I can, I still use Barnes & Noble, but shopping at Amazon is a necessary evil, and I haven't had any crazy experiences like the Indy situation since. I've just had to make my peace with the fact that the delivery estimate is a fantasy – I place my order and take my chances with when it arrives.
Now, however, Amazon is introducing something called Amazon Prime. It's a membership service: for $79 a year, you can get free 2-day shipping on every order (with eligible items – there have to be strings attached!). Overnight is only $4. I don't yet know if this is good for me – I'll have to get into Quicken and crunch the numbers. If I make enough Amazon orders in a typical year that I'm spending $50 or more on shipping already, this would be worth it. Because it stands to reason that there are at least as many orders where I'm paying nothing for shipping, but having to wait longer than I'd like to receive the items. But if (as I suspect) I typically spend $20 or so on Amazon shipping in a given year, then there's really no benefit to spending $60 more for something I won't use that much. I'm still going to buy a lot of things locally, because 2-day shipping still takes two days. It's a nice idea though. Jeff Bezos refers to it as a loss leader in his introductory note on the site's home page. I guess maybe it is. To me, it seems like a lot of free money for Amazon up front – their shipping charges have always been the inflated part of the price, where the profit is anyway. But I guess with power shoppers, they could end up spending a lot more on shipping than the $80 would cover.
Like the Super Saver thing, it feels kind of desperate. Just like A9, the "Gold Box" and all the new stores that are constantly in "Beta" – I've always believed that a successful company should stick to doing a few things excellently rather than trying to do everything pretty well. (That's why a lot of Apple's decisions have saddened me lately.) But it's an interesting idea – I'm curious to see how many people sign up, and how many products qualify as "eligible" for the Amazon Prime shipping rates.
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