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Daniels, Straight Up | Why Amazon Prime is the best thing to happen to consumerism in the last 10 years
September 9, 2013, 7:36 pm · Updated September 10, 2013, 11:54 pm·
Daniels, Straight Up
I found myself craving Cheez-Its during a study break last night.
After 20 minutes, a trip to CVS and a package of fake-cheesy goodness, I was still hungry — my imprudent single-pack purchase proved too meager for my Havarti hankering. Never again, I declared.
So, tomorrow, I will have 36 packs.
I’m not a glutton — if we don’t count biblical standards — I’m just economical, and I use Amazon Prime. After tax, my 36 Cheez-It bags from Amazon cost the same as roughly eight from CVS. And the 48-hour delivery came at no additional fee.
Amazon Prime is making consumption better than ever, especially for students.
For the internet shopping-disinclined, some background information: Amazon Prime is a subscription-based service that makes two-day shipping free and next-day shipping $3.99, regardless of an item’s price or size.
This first reason Amazon Prime is revolutionary has to do with the money saved from buying in bulk. Daytrips to wholesale retailers like Costco or Sam’s Club are fun and seem nice to your wallet, but they’re a huge hassle and actually not very pecuniarily prudent.
Trekking to a faraway warehouse for doomsday bunker quantities of food is an impediment that allows local grocery stores to charge more for less. Regardless of prices, most days I’d prefer a 20 minute walk to Fresh Grocer for one case of soda over a four-hour expedition to Costco for 10.
These trips also tend to be incredibly excessive and thus inefficient. Since getting to a wholesale retailer is so difficult, better make the most if it and buy tons, right? Did anyone else have a pantry packed with expired edibles your dad assumed would be the future of your family’s eating habits?
Amazon Prime vaporizes these difficulties. By sending items at wholesale prices to our front doors, it allows us to buy only what we need without ever getting into a car.
According to one article, users will recoup the service’s initial fee in saved shipping costs after just five multi-item purchases, so, depending on your consumption habits, it could make amazing sense.
From Amazon’s standpoint, however, there has been much debate on whether or not it is quite so practical.
Little data is publicly available, but some have estimated that Amazon loses around $200 per Prime customer on shipping costs, strangling the company’s already low profit margins. Others have speculated that the initial fee prompts Prime users to shop on Amazon far more than they used to — spending twice as much as an average non-Prime user — which makes the endeavor profitable.
What’s agreed upon, however, is that absorbing shipping costs is far from profit maximizing. So what’s going on here?
According to some analysts, Amazon Prime is part of a huge scheme to alter the way internet consumers consume. The plan would make buyers expect free two-day shipping as the status quo.
Expedited shipping from most internet companies tends to be pretty costly, making us reserve it for emergency situations only — like when I really, really needed pink Christmas lights for my dorm room freshman year. But if shoppers expect it for free, can other e-stores offer anything else?
If this quasi-conspiracy theory is true, it’s another reason why the Amazon Prime revolution is a boon for students.
And chances are it is. The Internet giant’s CEO, Jeff Bezos, has a hobby of resolutely restructuring the retail realm.
In tandem, these two pieces point to a future where consumers can decide between buying in-store or online sans friction. I don’t anticipate a storefront-less future anytime soon, but with universal fast shipping from internet shops and wholesale prices (but not wholesale quantities), the only deciding variable between ordering online or visiting a nearby store is a product’s price. This is all good news for students.
And if everything we need is available online — and from a multitude of sites — busier bees won’t ever have to visit a store again.
The next time you’re about to make a purchase, consult the web first. If you don’t mind a short wait, you could definitely save a few dollars.
And, if you have a free minute, I’m going to need help with all these Cheez-Its.
Ryan Daniels is a College senior from Philadelphia. Email him at email@example.com. “Daniels, Straight Up” appears every Wednesday.