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The Critical Path #103: The Amazon Electric Car

A history of retail as a series of innovations in transportation. How to think about Amazon in a continuum of changing consumer behavior. The source of Amazon’s market power and its hypothetical disruption. What would Amazon do and not do to improve its business.

via 5by5 | The Critical Path #103: The Amazon Electric Car.

(Note:  This recording took place a few days before  Amazon announced the drone-based Prime Air prototype service.)

  • Les_S
  • stefnagel

    Great podcast. Not to be missed. Left me with this thought: When companies start plumping sovietstyle Five Year Plans like Glasses and Maildrones, the flop sweat is wafting our way: they are covering up a complete lack of coherent, comprehensive business vision with pure technowampum, trollware, aka smoke and mirrors.

  • Christian Huund

    This episode is outstanding! Some thoughts on how linking producers and consumers could disrupt Amazon. The value Amazon provides is that it shields the customer from the idiosyncrasies of individual producers. (iTunes does this for music, books, movies and apps as well.) Amazon has one interface and deals with billing and returns. Unless producers don’t exhibit a much more uniform interface to consumers, consumers will want to avoid dealing with them individually. Any other aggregator who provides this service would have to compete with Amazon on its home turf and this is going to be difficult. So for linking producers and consumers a new common protocol or service would be needed.

    • Kizedek

      “Amazon has one interface and deals with billing and returns. Unless producers don’t exhibit a much more uniform interface to consumers, consumers will want to avoid dealing with them individually. Any other aggregator who provides this service would have to compete with Amazon on its home turf and this is going to be difficult. So for linking producers and consumers a new common protocol or service would be needed.”

      This isn’t the issue. There are numerous companies that provide “uniform interfaces” now. And as Horace notes, Amazon are not particularly groundbreaking in this area. There are all sorts of market places that provide the uniform experience between vendors and buyers: Shopify, Craigslist, Etsy, Cafepress, etc.

      It’s the fulfillment that needs solving.

      Think of the independent sellers that use the Amazon service. When you buy a secondhand or cheaper item from one of Amazon’s sellers listed alongside Amazon, then that person takes care of the fulfillment right now: they package the item themselves and send it to you from their location. It doesn’t go through an Amazon warehouse first. Amazon just protects your money and holds the seller accountable through ratings, etc. Just like eBay.

      As Horace said, the next disruption is to cut out the middleman. Cut out Amazon’s warehouses.

      I could see someone making use of all these “white van” delivery services in a local region. Right now, a private white van brings our services from the post office or package depot to our house, when we order from marktplaats.nl or H&M or something.

  • oldpaperboy

    Hi Horace. Long time listener first time commenter. After listening to Critical Path 103 It just occurred to me a great reason for the Bezos purchase of the Washington Post. He automatically gets a local distribution network. He can test his package delivery system with a great dying resource; newspapers! He can set up the system initially to distribute the bundles to the carriers. Each bundle probably has a fixed weight (30lbs?) He gets to figure out maps and neighborhoods (probably by using google or apple maps) Distribution of bundles can happen in the early morning hours after printing (probably alleviates airspace restrictions?) Or he can use the existing truck network to go to certain locations and the quadcopters can do the heavy lifting from there. Newsprint bundles are already thrown around so can probably surfive the drop from whatever height the quadcopter has to travel. :) This of course provides an opportunity to test the type of packaging needed if something more than amazons standard cardboard box are needed. Once youre working with local entities can probably work more with US Postal Service in certain areas to do limited or full fledged mail delivery.

    • oldpaperboy

      PS Field trials are always so much more fun when in the evaluators (FAA) back yard! :)

  • Bruce_Mc

    I think one thing that makes Amazon popular are the customer ratings it shows for products. The ratings and reviews make it very convenient for people to shop, and very inconvenient for them to leave. Providing a record of past purchases for users is another attraction.

    Perhaps Amazon could be disrupted by somebody like Craigslist offering their own product ratings and purchasing history. CL wouldn’t have to do any fulfillment whatever, which wold lower their overhead considerably. I think Abe Books works like this already.

    Another source of disruption that is talked about a lot on Asymco is from suppliers. If UPS or FedEx asked me to rate the products they ship me, I would be inclined to do so. They must already have databases full of businesses and the products the businesses ship. Opening that up to the buying public could be relatively easy and inexpensive. And they could make their own electric cars! :-)

    I guess Ebay/Paypal is in the mix as potential Amazon disruptors as well. They qualify as aggregators of sellers and enablers of shopping and of sales transactions.

  • http://www.onebyone.io/ Anthony

    I would love to get some of the charts at large poster size. Nice idea.

  • Watcher

    Linking to the mentioned graph (or maybe the perspective presentation?) would be helpful, even if not telling the whole story in an engaging way.

    • http://www.eugenegordin.com/ Eugene Gordin

      Agreed.

      I found a much more limited version of the graph in this post (http://www.asymco.com/2013/07/30/that-competition-thing/) but I believe Horace said that the graph he was referring to was over a period of 6 years.

      Horace can you please provide the graph?

  • Zantage

    Enjoyed the episode as always, but disagree with the observations about fulfillment services. Bezos realized early on that Warehouse Automation Systems had capability for pick/pack/ship, but no consumer-facing front end. Amazon provides the connection to the consumer, not fulfillment services. They just make it look good by establishing an M2M connection with the WAS, Amazon logo boxes, and a printer. Many, many Amazon products, including Prime, are shipped that way. High velocity (defined by vector of dollars and turns) products get peeled off into the growing Amazon fulfillment system. Google’s role could perhaps be a better front-end.

    • Kizedek

      I think you are talking about the independent sellers whose products are listed alongside “Amazon’s products”, as cheaper or second-hand alternatives.

      Right, they are doing their own fulfilment. Whereas, the “major” producers/suppliers whose products Amazon is “retailing” are having fulfillment performed by Amazon, since their products get rounded up at Amazon warehouses ready to be picked and shipped by Amazon’s workforce.

      So, unless you are big company whose products are being stocked in Amazon’s warehouses, no, there aren’t any Amazon fulfillment services for *you*…

      …and I think that was rather Horace’s point with his observation:

      If someone can crack Fulfillment for those who need it (ie, all those of us who don’t have own factory producing products that Amazon is interested in stocking wholesale, but who want to sell more than 1 item per week and scale up to something profitable without it being too labor intensive for one person) …then whoever cracks it could be disruptive to Amazon.

      I think Horace agrees with you, and you agree with Horace. If you want to sell some t-shirts, Amazon isn’t doing anything for you. Someone else could.

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