Wednesday, December 22, 2010
Loving Cutthroat Low-Margin Retail
One just has to love Amazon.com.
A minute ago I ordered a Sony digital picture frame for my first wife. Guess what, one-day shipping was FREE - a $24 value. Procrastinators rejoice!
And, of course, I ordered it through my son's affiliate links so I'll be sort of reaping a 6.50% discount as well.
They say Amazon's profit margins are a razor-thin 3.15%.
Look for them in the not-too-distant future to cut affiliate commission payouts AND to raise the bar above $25 for free shipping. The latter they have to do with oil pushing higher. This won't be problematic at all on account of scant competition.
How can any brick-and-mortar retailer compete with cheaper and doorstep-delivered?