1. Amazon Prime, I Heart You

    I’m not much of a stock-watcher these days, but I’ve seen a great deal of chatter on the internet regarding Amazon’s latest quarterly report. Their stock (ticker: AMZN) blew out the roof upon announcement of Amazon’s apparently-fabulous earnings, and rose about 15 percent on Friday. Yay for AMZN longs, I guess, and “ouch” for AMZN shorts. (I am not a knowing holder of AMZN, though the funds my family owns may or may not own AMZN.)

    This gives me an opportunity to talk about not AMZN, the stock, but Amazon, the company. And it’s something Amazon-related which I think I’ve overlooked to this point:

    My household hearts Amazon Prime.

    I love Amazon Prime. My wife loves Amazon Prime. I would contend that the $79/year which Prime costs us is possibly the best $79 I spend each year, when looked at from a “No, really, I’m happy to spend it!” angle.

    It isn’t the availability of streaming movies which delights us, as we’re not big movie-watchers. And we haven’t taken advantage of the Kindle e-book borrowing services which Amazon recently unleashed. Yes, both of those services are fine and dandy. But for us, it’s all about the unlimited two-day shipping.

    Put simply: Short of groceries and clothing, there’s very little that I can’t find a better-than-anywhere-else price on when it’s on Amazon. And as long as it’s something we don’t need right now, you can bet Amazon will get our money.

    But But But Local and B&M Businesses Are Suffering!

    Does my buying of PC components, Elixir electric-guitar strings, and damn near all books on Amazon mean that my local, bricks-and-mortar retailers lose business and/or “suffer?”

    Absolutely it does.

    Do I really care?

    Most of the time, no.

    The way I see it, the local and bricks/mortar retailers could’ve targeted the internet shopper the way Amazon did, back in the day. But they elected not to do so. Amazon did what it did, and bricks/mortar did what it did. One team won, and one team lost.

    Take, for instance, Best Buy. Lisa and I used to really enjoy visiting Best Buy. And we bought a fair amount of stuff from them over the years. But these days, it’s my opinion that Best Buy is nothing more than Amazon’s showroom, and a sparse, poorly-employed one at that. Something tells me that I’m not alone in this view.

    Could I get strings and such for my Gibson Les Paul at a local music store? Sure I could. Would I pay roughly 40 percent more for them if I did this, rather than buy through Amazon? Yes. Yes I would. If I needed new strings right the heck now, then spending locally is what I’d do. Otherwise, no. Amazon gets our cash. And we get our stuff in a couple of days, tops.

    Amazon Prime: Our Selling Points

    Amazon Prime, how I love thee? Let me count the ways. Amazon Prime …

    1. Saves us gas money, as we don’t make special trips to buy this stuff. Nor do we have to drive around OKC or Dallas trying to find a retailer who has what we want in stock.
    2. Saves time, for same reasons as above.
    3. Saves headaches, as we don’t have to wait in line to buy what we need. (As a grumpy parent, I now officially hate standing in line to spend money.)
    4. Means no more worrying about holding small-dollar purchases in Amazon’s cart to eventually qualify for Super Saver shipping. If I want to order a $14 cable on Monday and have it Wednesday, with no extra shipping fees, Amazon Prime makes it happen.
    5. Means quicker access to Amazon’s vast product selection. And their buying/checkout/account-monitoring processes were already the best I’ve ever seen.
    6. Is only helped by Amazon’s great customer service, which, the few times I’ve needed it, has been stellar. This, plus Prime benefits, means I have no problem giving them even more of our business.
    7. Allows us to get next-day shipping for an additional $4 or $5 per item, when necessary. (Which isn’t often.)

    I could probably come up with a few more positives, but I think these pretty much cover it. As mentioned earlier, the moderate selection of free Amazon Instant Videos available to Prime members isn’t a big deal to us; rather, it’s just icing on the cake. (Though, I’ll admit, it is more appealing now that Amazon Instant Video is available to PS3 owners, which we are.)

    Anybody out there still “on the fence” with Amazon Prime?

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  2. 1 Response to "Amazon Prime, I Heart You" ...

    1. On May 2, 2012 @ 2:22 am,
      Rourke wrote:

      …I’m still firmly on the fence. I like Amazon and $79/year is easily affordable to me — but I’m a bit frugal by nature.

      You overlooked a significant factor — ‘Amazon Prime’ subscribers spend MORE at Amazon than they did before subscribing.

      Once they join Prime, a typical Amazon customers’ overall purchases increase from $400 a year to $900 in their first year of membership, according to industry analysts.

      On average, Prime members spend 130 % more than regular Amazon customers. Thus, in reality, Amazon-Prime costs consumers much more than the mere $79 they think they’re paying.

      The PRIME purpose of Amazon-Prime is customer motivation to buy MORE than they otherwise would… and it works.

      An Amazon vice-president reported that Prime is the best method they have ever seen in getting customers to purchase new product lines in the ever expanding Amazon offerings. Prime broke even financially for Amazon after only 3 months… though Amazon expected it to take 2 years.

      ‘Vijay Ravindran’, a former Amazon-Prime team employee…stated:
      “It was really about changing people’s mentality so they wouldn’t shop anywhere else.” That $79 price for Prime membership was chosen entirely for psychological (not financial cost) reasons– a cozy price point that would ‘appeal’ to customers, forging loyalty to Amazon.

      || Other notes: Best Buy prices are much more competitive/lower than they used to be. Best Buy is 10% cheaper than Amazon on PC’s I’m currently interested in. I still buy some electronics there, but only after comparison with online competitors… and overall convenience.

      Amazon does play games with prices — raising the displayed price if I surf back to the same item on their website. I’ve noticed this mostly with jewelry/watches… not all their stuff. Amazon seems to have sophisticated software that tracks customer interest in specific items– increasing the price if the customer shows interest… and factoring in how well the item is selling. Don’t like those Amazon tricks.



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