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About convenience

Why I Buy (almost) Everything from Amazon

Burgess COMMENTARY

Peter Burgess

Why I Buy (almost) Everything from Amazon

There are a lot of things that I like about Amazon. Good pricing, wide selection, and ease of shopping. These qualities have been part of their ecosystem for a long time, but it was never enough to make me an Amazon loyalist like I am today.

So, what changed? Amazon Prime.

For an annual fee of $79, I can order whatever I want, whenever I want with absolutely no shipping cost. None. What this means to me is that I can now shop and order at the exact moment that I need something. I ordered from Amazon (using Prime) on three different occasions over the past week.

My daughter has shown an interest in building and engineering. Rather than adding another task to my already extensive to-do list, I grabbed my phone and ordered her two building toys in less than two minutes. I knew the price was good. Even if it wasn’t the best price, once you had on shipping or gas to go to the store, I was confident that I was paying a fair amount.

The next day, I realized that I misplaced my space heater in a recent move. Again, I grabbed my phone, searched prices and reviews and ordered it up.

This morning, I met a goal that I had set for myself. My reward was a FitBit Flex. While I was cooling down from my workout, I ordered it on Amazon and carried on with my day.

The amazing thing about their payment system is that it is one button ordering, so it really doesn’t take more than 2 minutes to place an order. Also note that I purchased three items on three consecutive days. They weren’t in one order. That is the real gold of Amazon Prime. I don’t have to package all of my items in one order. I can order them in the moment that I’m thinking about it.

I know that Amazon Prime has allowed me to spend more money than I typically would have at Amazon, because they make it so easy. I’m happy to pay the $79 annual fee to keep my mind clear of “to-do” clutter.

Do you use Amazon Prime or have you had any similar experiences where the means of payment has prompted you to become an extremely loyal customer?

This entry was posted on Monday, September 30th, 2013 at 12:47 pm and is filed under Payments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

From the perspective of a buyer who wants to be ‘efficient’ this anecdote suggests that Amazon is the best thing since sliced bread … and from this limited perspective Sharon is probably right. Amazon has a business model that makes buying things really easy, and a supply chain that is global and efficient and therefore reasonably low prices for the buyer and reasonably good profits for Amazon. All the things that big name business schools teach students how to optimize are being done well.

The bigger problem is what Amazon’s success is doing to everyone else. What are business schools teaching about productivity? Certainly productivity means more production for less cost, but in turn less cost becomes less employment and this in turn becomes less aggregate demand (but not until the economy has consumed all sorts of consumer credit and home equity finance) and in the end the economy tanks. We saw a bit of this in 2007 … but massive increases in money supply has hidden the long term impact for the time being.

Reduced aggregate demand has another face. It is the face of an unemployed person, a family with no breadwinner and communities without the multiplier effect of a local payroll.

Low price products that are profitable often have a supply chain that has lots of bad impacts. Typically the buyer never knows about this because there is little easily accessible data about the supply chains used by big global marketing organizations. This should change … and it might do relatively soon.

And of course easy buying has a mirror image, easy junking. The waste chain arising when easy buying is matched up with easy junking is a cost to society (planet) that everyone talks about but nobody does much actually to change

Better metrics that make impact on people, place and planet as obvious as price and convenience will be a huge help in making a society and economy that has better balance than what we have now.

Peter Burgess TrueValueMetrics