I Want It Today - How Amazon’s ambitious new push for same-day delivery will destroy local retail.

[FarCenter]

But suddenly, Amazon has stopped fighting the sales-tax war. Last fall it dropped its repeal campaign in California and instead signed a deal with lawmakers to begin collecting sales taxes later this year. That was followed by several more tax deals—over the course of the next couple years, Amazon will begin collecting sales tax from residents of Nevada, New Jersey, Indiana, Tennessee, Virginia, and on July 1, it began collecting taxes from Texans. It also currently collects taxes from residents of Kansas, Kentucky, New York, North Dakota, and its home state of Washington. After all the tax deals go into effect, the company will be collecting taxes from the majority of its American customers.

Why would Amazon give up its precious tax advantage? This week, as part of an excellent investigative series on the firm, the Financial Times’ Barney Jopson reports that Amazon’s tax capitulation is part of a major shift in the company’s operations. Amazon’s grand strategy has been to set up distribution centers in faraway, low-cost states and then ship stuff to people in more populous, high-cost states. When I order stuff from Amazon, for instance, it gets shipped to California from one of the company’s massive warehouses in Kentucky or Nevada.

But now Amazon has a new game. Now that it has agreed to collect sales taxes, the company can legally set up warehouses right inside some of the largest metropolitan areas in the nation. Why would it want to do that? Because Amazon’s new goal is to get stuff to you immediately—as soon as a few hours after you hit Buy. (Disclosure: Slate participates in Amazon Associates, an "affiliate" advertising plan that rewards websites for sending customers to the online store. This means that if you click on an Amazon link from Slate—including a link in this story—and you end up buying something, Amazon will send Slate a percentage of your final purchase price.)

It’s hard to overstate how thoroughly this move will shake up the retail industry. Same-day delivery has long been the holy grail of Internet retailers, something that dozens of startups have tried and failed to accomplish. (Remember Kozmo.com?) But Amazon is investing billions to make next-day delivery standard, and same-day delivery an option for lots of customers. If it can pull that off, the company will permanently alter how we shop. To put it more bluntly: Physical retailers will be hosed.

http://www.slate.com/articles/business/small_business/2012/07/amazon_same_day_delivery_how_the_e_commerce_giant_will_destroy_local_retail_.html

[Zalatix]

1. Not likely to work. Amazon typically charges WAY too much for quick delivery.

I can imagine what they'll charge for same-day delivery. This article claims that Amazon often makes deliveries overnight or faster-than-normal anyway. I haven't had that experience.

If they really can do same-day delivery, and without needing their stupid "Amazon Prime" subscription, then retailers are in trouble.

[Ruby the Liberal]

3. Happened to me.

I ordered a headset for my work phone that I couldn't buy locally. That was at about 9pm at night. It arrived in our offices the next morning. It was freaky.

[robinlynne]

4. You didn't pay attention to the Op. it siad Amazon NOW ships from far away states, BUT it will

now set up warehouses in the big cities. That makes same day delivery, or next day delivery not a diffiuclt task.
I send things here in the city via first class mail, and they often arrive within 24 hours.
fedex or ups would make that more than easy.

[spin]

10. If you have an Amazon Prime membership 2 day shipping is free. ...

I live in a little town in Florida and the nearest big brick and mortar store (a Walmart) is a 40 mile round trip. Better stores often involve a sixty mile round trip or more. I also am a candidate for a hip replacement and while I have a handicapped sticker, the Walmart rarely has any open handicapped parting slots. Consequently I order almost everything I buy with the exception of perishable food from Amazon.

The prime membership only costs $79 a year. This membership also has other benefits that I rarely use but many others might enjoy. Amazon also has the best customer service that I have ever encountered. (To be fair I've only had to use it a couple of times although I have been a Amazon prime member for 5 years.)

Amazon Prime

Amazon Prime is a membership program that gives you and your family unlimited fast shipping, such as FREE Two-Day shipping to street addresses in the contiguous U.S., on all eligible purchases for an annual membership fee of $79. Amazon Prime members in the U.S. can enjoy instant videos: unlimited, commercial-free, instant streaming of thousands of movies and TV shows through Amazon Instant Video at no additional cost. Members who own Kindle devices can also choose from thousands of books -- including more than 100 current and former New York Times Bestsellers -- to borrow and read for free, as frequently as a book a month with no due dates, from the Kindle Owners' Lending Library. Eligible customers can try out a membership by starting a free trial.
http://www.amazon.com/gp/help/customer/display.html?nodeId=13819211

I realize that Amazon.com might eliminate small retailers but to be honest few remain near where I live. The big box stores killed them off before Amazon came on the scene.

For me in my situation the Amazon prime membership is well worth the yearly cost.

[Zalatix]

16. Yes, I mentioned Amazon Prime. I don't want to have to subscribe for faster delivery.

To each their own, though. I can see it being beneficial to some.

[silverweb]

2. Could be a good thing.

[font color="navy" face="Verdana"]I'm of two minds about this. I love the idea of people leaving their cars at home more and polluting less, but I hate the idea of fast home delivery possibly putting local retail stores out of business.

Or ... would this just spur competition with those same local retailers, who could also provide fast home delivery for those who want it? After all, Safeway (a large California grocery chain) already delivers within an hour for $12.95 or less, and I intend to use that service on occasion.

[HiPointDem]

6. how do you figure there will be significantly less pollution with those trucks driving to everyone's

houses?

i think it's a wash, at least.

[silverweb]

9. I don't think it's quite "a wash."

[font color="navy" face="Verdana"]First, I didn't say "there will be significantly less pollution." What I said was, "I love the idea of people leaving their cars at home more and polluting less."

Getting to the actual pollution part of this, a great many people take the car to "run to the store" for one or two items multiple times a week; this is very inefficient. A great many people also don't maintain their vehicles properly for optimal fuel efficiency and clean operation. (There are multiple reasons for this, often beyond people's control, so I'm not assigning blame here, just stating a fact.)

Delivery vehicles are generally routed with multiple deliveries along the way, which is considerably more efficient. Also, companies that maintain fleets of vehicles for business use (i.e., deliveries) are strongly motivated by economy, which necessitates good maintenance and fuel efficiency. (Google "fleet efficiency" for USPS, UPS, and Fed-Ex.)

I don't own a car and I don't want one. I walk or take public transit when I can, and sometimes I go with my daughter when she does her shopping. When what I want is not something easily located or picked up, I'll order on line and have it delivered -- and I like the idea that it is just one of many deliveries on a regular route in a well-maintained, fuel-efficient vehicle.

Overall, unless a person maintains their car optimally and plans errands to accomplish the most while driving the least, I think having things delivered actually is less polluting. Multiply that by a few million trips to the store and it adds up.

[HiPointDem]

11. i doubt it.

[silverweb]

19. Okay.

[font color="navy" face="Verdana"]I don't follow your reasoning, since you haven't shared it, but skepticism is a valid opinion.

[madokie]

14. We own two vehicles and I still buy online

as I see it as a way to save money from having to drive our vehicles to a city thirty five miles away and looking for a place that sells what I'm wanting to buy. So I go online and find it and buy it and have it delivered. The truck that delivers whatever it is has other stuff in it that it is delivering to others so I think by my staying home I am responsible for less pollution even though I've shifted that pollution from my vehicles to someone elses. I see the ups or fed ex truck leave here and make a stop across the street to make a delivery quite often, sometimes to pick up something. I see it as a win win for everyone too

[silverweb]

17. Exactly.

[font color="navy" face="Verdana"]We're definitely on the same page.

[dballance]

5. The mom and pop local retailers are already gone

The only "local" retailers this will impact are the Wal Marts, Costcos, and big box Best Buy and Target type stores.

I don't see how it really much matters.

[HiPointDem]

7. amazon is the new walmart. just a more up-market demographic.

[exboyfil]

8. Actually it appears that retail is evolving to an optimum

by a select few companies who can kick butt on logistics. That is Wal Mart's big advantage.

[HiPointDem]

12. kick butt on logistics? evolving to an optimum? what are you talking about?

[exboyfil]

13. Wal Mart's big advantage (besides is obvious size)

is its logistics network. That is how it has grown to the size it currently is. Lots of academic papers have been written on it. The technique has been so effective that most other large box stores have tried to emulate (Target etc). The optimum approach is to geographically ship an entire households needs/wants to a location relatively close to the household to be picked up on a weekly or sooner basis. Alternatively with sufficient volume having carriers deliver packages for time sensitive materials (those you have to have or would like to get sooner without having to bother to drive). Postal carriers already run 6 times/day (UPS and Fed Ex already tied into them). What if WalMart, Amazon starts delivering packages to them in morning before they go out on rounds (presupposes that excess space and time to deliver in schedule already exists). Marginal costs of additional deliveries will be very low. Of course UPS, Fed Ex, and possibly a retail companies own delivery fleet could be employed as well with sufficient volume.

I am not making a value judgement - I am just saying what it would take to optimize delivery of goods.

[snooper2]

20. Every time a tube of toothpaste is scanned their central distribution

hub knows about it instantly...

They know exactly how much of what to ship when...


I guess it beats the days of taking inventory and faxing it in

[MADem]

15. I don't buy everything from Amazon, but I do buy stuff I cannot find locally or that is overpriced.

The Petco down the road overcharges for the same parrot food I can get on Amazon, free super saver shipping, for several dollars less. The nearest place for me to buy replacement batteries for my phone is radio shack, they charge twice as much for batteries as Amazon does.

I haven't done the Amazon prime thing, but now they offer free streaming movies with Amazon prime. If you're a non-cable TV person, that might be a selling point.