Retailers complaining about how Amazon is creating a race-to-the-bottom with free shipping calls to mind horse vets complaining about how automobiles are eating into their lifestyles. It's sooooo unfair!
Amazon is changing the world the way Standard Oil changed the world. If it's going in my house and it's not groceries, it's coming from Amazon. The buying and shipping experience is unparalleled. Amazon isn't one of these bespoke SF-only investor-moneygrab services, it's real technological progress on a world scale.
> Retailers complaining about how Amazon is creating a race-to-the-bottom with free shipping calls to mind horse vets complaining about how automobiles are eating into their lifestyles. It's sooooo unfair!
The horse vets found other employment.
The horses, by far and large, were butchered.
The question these days is - which of us are the vets, and which of us are the horses?
Well, most of the horses weren't necessarily eaten before their time - it's just that they weren't replaced, because the price of new horses went down quickly so horse breeders stopped raising so many foals. The working lifespan of a horse is at best 20 years.
> Amazon is creating a race-to-the-bottom with free shipping
This hasn't been true for a while. For at least several years they've been going in the other direction with free shipping. They've raised the minimum purchase requirement for getting free shipping twice in the last few years ($25 to $35 to $49) and the other way to get "free" shipping isn't free, it's $99/year and you have to make a certain number of orders per year to get it to amortize to a reasonable shipping cost (which still won't be free.)
It also gives me a fair deal of schadenfreude (or something in the same vein) to see them missing Amazon's end game in the retail space:
The cost of transportation is going to plummet as we move to electric and driverless vehicles. Amazon's game is the same as Uber's, lose money and win the market, then sit on your customer base as the same price points suddenly become highly profitable.
But Mr. Schwartz is sure free shipping is an unsustainable trend.
At no point was Standard Oil the only purveyor of oil products in the world. They enjoyed a dominant position akin to Microsoft's, but were unable to hold onto it forever.
What Rockefeller eliminated was the refining industry. And he did so starting out as one of those refiners. Just as Amazon was at one point just another online retailer, Rockefeller was once just one of the many many refiners dotting the Cleveland countryside. He did it through his pure, amazing business acumen. He made better products than his rivals, and managed his money better. He built such good relations with the banks that they would pull up to him as he was walking down the street and offer him loan terms.
Industries go through periods of consolidation and breakup all the time. It's just a necessary part of the evolution of the economy and society.
Standard Oil transitioned into a vertically integrated model that controlled 90% of the market in the 1903-1906 timeframe. Clearly Amazon has ambitions to do something similar, which isn't a good thing if you don't work for Amazon.
From the government's anti-trust filing:
> Almost everywhere the rates from the shipping points used exclusively, or almost exclusively, by the Standard are relatively lower than the rates from the shipping points of its competitors. Rates have been made low to let the Standard into markets, or they have been made high to keep its competitors out of markets. Trifling differences in distances are made an excuse for large differences in rates favorable to the Standard Oil Co., while large differences in distances are ignored where they are against the Standard. Sometimes connecting roads prorate on oil—that is, make through rates which are lower than the combination of local rates; sometimes they refuse to prorate; but in either case the result of their policy is to favor the Standard Oil Co. Different methods are used in different places and under different conditions, but the net result is that from Maine to California the general arrangement of open rates on petroleum oil is such as to give the Standard an unreasonable advantage over its competitors.
Amazon is changing the world the way Standard Oil changed the world. If it's going in my house and it's not groceries, it's coming from Amazon. The buying and shipping experience is unparalleled. Amazon isn't one of these bespoke SF-only investor-moneygrab services, it's real technological progress on a world scale.