AMZN - Amazon.com Inc.

[Liberty]

My silence in relation to his post shouldn't be taken as an endorsement.

 

Was trying to see what kind of multiple would be needed to justify the valuation. Talking about amazon's valuation is like talking about politics, it brings the worst out of people.

 

You're post was good, Cameron. I just happened to disagree with parts of it and pointed out some of the reasons why.

 

AJC's post on the other hand was just a way for him to insult me because I've disagreed with him in other threads and he obviously holds a grudge.

[fareastwarriors]

This guy is providing a much needed service.  I'd much rather pay more to buy something on Amazon than need to walk into a Walmart.  I guess I'm not the only one.

 

This 28-year-old's company makes millions buying from Walmart and selling on Amazon

 

It sounds like a bad version of flash boys.

 

I know a friend doing that too. I'm still surprised the profit is not arbitraged away [yet].

[Liberty]

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/current-economy/80/

 

Doesn't that sort of imply that Amazon isn't providing the lowest price.

 

They definitely don't have the lowest prices on everything. It's very hard for any retailer to do that unless you have a very limited number of SKUs and mostly focus on bulk (f.ex. the Costco model, which can't handle millions of SKUs, at least not as efficiently. I've seen estimates that Amazon has over 400 million SKUs. A Costco has about 4,000 SKUs according to the company: https://www.costco.com/about.html).

 

But they're certainly making an effort to keep the value proposition high for customers (convenience, breadth, speed, customer service, flat fee & extras with Prime, price-matching, etc) so that they're less tempted to even look elsewhere (become the starting point for all product searches, which has been trending that way). Or even be ready to pay a bit more because they're getting a known experience that they trust (I know I've sometimes avoided ordering things from other online stores because I had no idea how things would go, and whether they would make it right if I had any problems).

[Guest Cameron]

This guy is providing a much needed service.  I'd much rather pay more to buy something on Amazon than need to walk into a Walmart.  I guess I'm not the only one.

 

This 28-year-old's company makes millions buying from Walmart and selling on Amazon

 

It sounds like a bad version of flash boys.

 

I know a friend doing that too. I'm still surprised the profit is not arbitraged away [yet].

 

Ironically this is pretty good chunk of eBay's business, people arbitrage from Amazon. Jet.com did this, if they didn't have the product they would order it for you from the lowest e-commerce website they could find. It makes me wonder about the economic benefit of what they are doing. It sounds like retail market making.

[Guest Cameron]

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/current-economy/80/

 

Doesn't that sort of imply that Amazon isn't providing the lowest price.

 

They definitely don't have the lowest prices on everything. It's very hard for any retailer to do that unless you have a very limited number of SKUs and mostly focus on bulk (the Costco model, which can't handle millions of SKUs, at least not as efficiently).

 

But they're certainly making an effort to keep the value proposition high for customers (convenience, breadth, speed, customer service, flat fee & extras with Prime, price-matching, etc) so that they're less tempted to even look elsewhere (become the starting point for all product searches, which has been trending that way). Or even be ready to pay a bit more because they're getting a known experience that they trust (I know I've sometimes avoided ordering things from other online stores because I had no idea how things would go, and whether they would make it right if I had any problems).

 

It definitely makes sense, just looking at the shear amount of product they have in their warehouses and how little inventory that they carry on their balance sheet, which is also mixed with their other in house products that they make, I wonder what % of the product in their warehouses isn't theirs, I want to say 70-80%.

 

 

[Liberty]

It definitely makes sense, just looking at the shear amount of product they have in their warehouses and how little inventory that they carry, which is also mixed with their other in house products, I wonder what % of the product in their warehouses isn't theirs, I want to say 70-80%.

 

That's a good question. Negative working capital certainly is nice when you can get it too..

 

A warehouse can be optimized very differently than a store. Seems to me like there are so many kinds of "buffers" built-in a store's inventory because things have to be there for people to look at pick up, you can't have near empty shelves or quick-order from a different store even if that would be the most efficient inventory for certain SKUs. But with warehouses/fulfilment centers, you should be able to optimize inventory better for maximum turnover per sq/ft. And if you have decades of sales data and thousands of machine-learning and logistics engineers, I suspect you should be able to get pretty good at this kind of inventory management.

[Guest Cameron]

It definitely makes sense, just looking at the shear amount of product they have in their warehouses and how little inventory that they carry, which is also mixed with their other in house products, I wonder what % of the product in their warehouses isn't theirs, I want to say 70-80%.

 

That's a good question. Negative working capital certainly is nice when you can get it too..

 

A warehouse can be optimized very differently than a store. Seems to me like there are so many kinds of "buffers" built-in a store's inventory because things have to be there for people to look at pick up, you can't have near empty shelves or quick-order from a different store even if that would be the most efficient inventory for certain SKUs. But with warehouses/fulfilment centers, you should be able to optimize inventory better for maximum turnover per sq/ft. And if you have decades of sales data and thousands of machine-learning and logistics engineers, I suspect you should be able to get pretty good at this kind of inventory management.

 

This is the biggest mystery for me when it comes to their inventory because an independent book publisher like MacFarland Books (http://www.mcfarlandbooks.com/) you can tell by looking at their prices they charge for individual book buys to retailers (dropshipping) that Amazon makes a healthy profit, from the ones I've checked its between 5-20% on some books and they are charging MSRP. These books get such little orders yet they have every single on in stock with Prime that its pretty obvious that they don't have these items in their warehouses but somehow Amazon gets it to you in 2 days, these specifically don't come in Amazon boxes.

[Liberty]

This is the biggest mystery for me when it comes to their inventory because an independent book publisher like MacFarland Books (http://www.mcfarlandbooks.com/) you can tell by looking at their prices they charge for individual book buys to retailers (dropshipping) that Amazon makes a healthy profit, from the ones I've checked its between 5-20% on some books and they are charging MSRP. These books get such little orders yet they have every single on in stock with Prime that its pretty obvious that they don't have these items in their warehouses but somehow Amazon gets it to you in 2 days, these specifically don't come in Amazon boxes.

 

That's interesting scuttlebutt... They come in the large envelopes that 3P sellers often use or something else? Where do you think they get them from? Could it just be that they come form within the Amazon logistics system but use smaller packaging because they're air-shipping them from farther away to get them in 2-days? Another benefit of leasing your own planes once you're at scale, you can do more of this just-in-time inventory juggling at lower cost than if you had to use Fedex and UPS.

[Guest Cameron]

This is the biggest mystery for me when it comes to their inventory because an independent book publisher like MacFarland Books (http://www.mcfarlandbooks.com/) you can tell by looking at their prices they charge for individual book buys to retailers (dropshipping) that Amazon makes a healthy profit, from the ones I've checked its between 5-20% on some books and they are charging MSRP. These books get such little orders yet they have every single on in stock with Prime that its pretty obvious that they don't have these items in their warehouses but somehow Amazon gets it to you in 2 days, these specifically don't come in Amazon boxes.

 

That's interesting scuttlebutt... They come in the large envelopes that 3P sellers often use or something else? Where do you think they get them from? Could it just be that they come form within the Amazon logistics system but use smaller packaging because they're air-shipping them from farther away to get them in 2-days? Another benefit of leasing your own planes once you're at scale, you can do more of this just-in-time inventory juggling at lower cost than if you had to use Fedex and UPS.

 

They come in regular envelopes, since they are based in North Carolina thats the return address. I found them from an article because Amazon wanted them to lower their wholesale prices from 20% of MSRP, and they refused because they have a policy where they charge everyone the same.

 

I have to assume that they do all the packaging etc. then deliver the packages to a local Amazon warehouse and Amazon takes the rest from there. Since they have so many warehouses around the country I have a feeling thats what they do for most of these obscure products.

[mrholty]

This guy is providing a much needed service.  I'd much rather pay more to buy something on Amazon than need to walk into a Walmart.  I guess I'm not the only one.

 

This 28-year-old's company makes millions buying from Walmart and selling on Amazon

 

It sounds like a bad version of flash boys.

 

I know a friend doing that too. I'm still surprised the profit is not arbitraged away [yet].

 

I sell a little on Amazon as well.  Its gotten harder each and every year.  The guy who is doing this is selling the video that he is going into Walmart scanning a few things and moving on.  The reality is the majority of what he is doing is selling wholesale but even most of that is a lie.  The real story is he's basically outsourced his wholesale business and he is selling training to newbies.  He's selling a dream. 

 

 

[mrholty]

This is the biggest mystery for me when it comes to their inventory because an independent book publisher like MacFarland Books (http://www.mcfarlandbooks.com/) you can tell by looking at their prices they charge for individual book buys to retailers (dropshipping) that Amazon makes a healthy profit, from the ones I've checked its between 5-20% on some books and they are charging MSRP. These books get such little orders yet they have every single on in stock with Prime that its pretty obvious that they don't have these items in their warehouses but somehow Amazon gets it to you in 2 days, these specifically don't come in Amazon boxes.

 

That's interesting scuttlebutt... They come in the large envelopes that 3P sellers often use or something else? Where do you think they get them from? Could it just be that they come form within the Amazon logistics system but use smaller packaging because they're air-shipping them from farther away to get them in 2-days? Another benefit of leasing your own planes once you're at scale, you can do more of this just-in-time inventory juggling at lower cost than if you had to use Fedex and UPS.

 

They come in regular envelopes, since they are based in North Carolina thats the return address. I found them from an article because Amazon wanted them to lower their wholesale prices from 20% of MSRP, and they refused because they have a policy where they charge everyone the same.

 

I have to assume that they do all the packaging etc. then deliver the packages to a local Amazon warehouse and Amazon takes the rest from there. Since they have so many warehouses around the country I have a feeling thats what they do for most of these obscure products.

 

Incorrect.  Cameron they are doing what is called Seller Fulfilled Prime. 

When I sell on Amazon via Prime my fees are now about 30% of the average item price I sell. 

Once a seller has certain metric they can apply to an Amazon program and you can sell via prime but it comes from your warehouse.  You just have to hit the delivery window.  I know 3 guys who tried it. 2 quit as it hurt his overall metrics and 1 does it for just his state and neighboring states.

[Guest Cameron]

This is the biggest mystery for me when it comes to their inventory because an independent book publisher like MacFarland Books (http://www.mcfarlandbooks.com/) you can tell by looking at their prices they charge for individual book buys to retailers (dropshipping) that Amazon makes a healthy profit, from the ones I've checked its between 5-20% on some books and they are charging MSRP. These books get such little orders yet they have every single on in stock with Prime that its pretty obvious that they don't have these items in their warehouses but somehow Amazon gets it to you in 2 days, these specifically don't come in Amazon boxes.

 

That's interesting scuttlebutt... They come in the large envelopes that 3P sellers often use or something else? Where do you think they get them from? Could it just be that they come form within the Amazon logistics system but use smaller packaging because they're air-shipping them from farther away to get them in 2-days? Another benefit of leasing your own planes once you're at scale, you can do more of this just-in-time inventory juggling at lower cost than if you had to use Fedex and UPS.

 

They come in regular envelopes, since they are based in North Carolina thats the return address. I found them from an article because Amazon wanted them to lower their wholesale prices from 20% of MSRP, and they refused because they have a policy where they charge everyone the same.

 

I have to assume that they do all the packaging etc. then deliver the packages to a local Amazon warehouse and Amazon takes the rest from there. Since they have so many warehouses around the country I have a feeling thats what they do for most of these obscure products.

 

Incorrect.  Cameron they are doing what is called Seller Fulfilled Prime. 

When I sell on Amazon via Prime my fees are now about 30% of the average item price I sell. 

Once a seller has certain metric they can apply to an Amazon program and you can sell via prime but it comes from your warehouse.  You just have to hit the delivery window.  I know 3 guys who tried it. 2 quit as it hurt his overall metrics and 1 does it for just his state and neighboring states.

 

Thats interesting, and when you do this is it shown as Amazon being the seller on the page? Or does it show yourself?

 

I figured it would be something different since MacFarland is a supplier and not a 3p seller.

[Liberty]

Incorrect.  Cameron they are doing what is called Seller Fulfilled Prime. 

When I sell on Amazon via Prime my fees are now about 30% of the average item price I sell. 

Once a seller has certain metric they can apply to an Amazon program and you can sell via prime but it comes from your warehouse.  You just have to hit the delivery window.  I know 3 guys who tried it. 2 quit as it hurt his overall metrics and 1 does it for just his state and neighboring states.

 

Thanks MrHolty. I had even read about that, but they have so many programs and initiatives that I had forgotten about it.

 

Another way to allow third parties to plug into the Amazon API. Makes all the sense in the world.

[rogermunibond]

Discount provided by Amazon program - cuts prices on 3rd party sellers to match online best price.  The fight for market share is real.

 

https://www.wsj.com/articles/amazon-snips-prices-on-other-sellers-items-ahead-of-holiday-onslaught-1509883201

[mrholty]

This is the biggest mystery for me when it comes to their inventory because an independent book publisher like MacFarland Books (http://www.mcfarlandbooks.com/) you can tell by looking at their prices they charge for individual book buys to retailers (dropshipping) that Amazon makes a healthy profit, from the ones I've checked its between 5-20% on some books and they are charging MSRP. These books get such little orders yet they have every single on in stock with Prime that its pretty obvious that they don't have these items in their warehouses but somehow Amazon gets it to you in 2 days, these specifically don't come in Amazon boxes.

 

That's interesting scuttlebutt... They come in the large envelopes that 3P sellers often use or something else? Where do you think they get them from? Could it just be that they come form within the Amazon logistics system but use smaller packaging because they're air-shipping them from farther away to get them in 2-days? Another benefit of leasing your own planes once you're at scale, you can do more of this just-in-time inventory juggling at lower cost than if you had to use Fedex and UPS.

 

They come in regular envelopes, since they are based in North Carolina thats the return address. I found them from an article because Amazon wanted them to lower their wholesale prices from 20% of MSRP, and they refused because they have a policy where they charge everyone the same.

 

I have to assume that they do all the packaging etc. then deliver the packages to a local Amazon warehouse and Amazon takes the rest from there. Since they have so many warehouses around the country I have a feeling thats what they do for most of these obscure products.

 

Incorrect.  Cameron they are doing what is called Seller Fulfilled Prime. 

When I sell on Amazon via Prime my fees are now about 30% of the average item price I sell. 

Once a seller has certain metric they can apply to an Amazon program and you can sell via prime but it comes from your warehouse.  You just have to hit the delivery window.  I know 3 guys who tried it. 2 quit as it hurt his overall metrics and 1 does it for just his state and neighboring states.

 

Thats interesting, and when you do this is it shown as Amazon being the seller on the page? Or does it show yourself?

 

I figured it would be something different since MacFarland is a supplier and not a 3p seller.

 

Normally it shows Amazon or the 3P sellers name.  However, I know of at least 1 agreement that Amazon has with a company where Amazon is the "seller" and they send a file 2x daily to the company who books and ships the orders.  I assume this is Amazon is doing.  (I ran into this when I tried to become an 'Amazon distributor' for them.  Lots of companies are really struggling to figure out how to work/sell on Amazon.  Amazon will not follow MAP if they are the seller and they are really a pain in the ass for brand with weird order patterns, high returns, etc.

[Guest Cameron]

This is the biggest mystery for me when it comes to their inventory because an independent book publisher like MacFarland Books (http://www.mcfarlandbooks.com/) you can tell by looking at their prices they charge for individual book buys to retailers (dropshipping) that Amazon makes a healthy profit, from the ones I've checked its between 5-20% on some books and they are charging MSRP. These books get such little orders yet they have every single on in stock with Prime that its pretty obvious that they don't have these items in their warehouses but somehow Amazon gets it to you in 2 days, these specifically don't come in Amazon boxes.

 

That's interesting scuttlebutt... They come in the large envelopes that 3P sellers often use or something else? Where do you think they get them from? Could it just be that they come form within the Amazon logistics system but use smaller packaging because they're air-shipping them from farther away to get them in 2-days? Another benefit of leasing your own planes once you're at scale, you can do more of this just-in-time inventory juggling at lower cost than if you had to use Fedex and UPS.

 

They come in regular envelopes, since they are based in North Carolina thats the return address. I found them from an article because Amazon wanted them to lower their wholesale prices from 20% of MSRP, and they refused because they have a policy where they charge everyone the same.

 

I have to assume that they do all the packaging etc. then deliver the packages to a local Amazon warehouse and Amazon takes the rest from there. Since they have so many warehouses around the country I have a feeling thats what they do for most of these obscure products.

 

Incorrect.  Cameron they are doing what is called Seller Fulfilled Prime. 

When I sell on Amazon via Prime my fees are now about 30% of the average item price I sell. 

Once a seller has certain metric they can apply to an Amazon program and you can sell via prime but it comes from your warehouse.  You just have to hit the delivery window.  I know 3 guys who tried it. 2 quit as it hurt his overall metrics and 1 does it for just his state and neighboring states.

 

Thats interesting, and when you do this is it shown as Amazon being the seller on the page? Or does it show yourself?

 

I figured it would be something different since MacFarland is a supplier and not a 3p seller.

 

Normally it shows Amazon or the 3P sellers name.  However, I know of at least 1 agreement that Amazon has with a company where Amazon is the "seller" and they send a file 2x daily to the company who books and ships the orders.  I assume this is Amazon is doing.  (I ran into this when I tried to become an 'Amazon distributor' for them.  Lots of companies are really struggling to figure out how to work/sell on Amazon.  Amazon will not follow MAP if they are the seller and they are really a pain in the ass for brand with weird order patterns, high returns, etc.

 

Considering that Amazon truly doesn't need to stock this item to have an 11-20% profit margin I would venture to guess they have more of these agreements with sellers.

 

I don't remember if I mentioned it before but Wayfair does this with a network of suppliers.

[LC]

And as long as current tax laws remain in force.

 

Aggressively reinvest, build a huge empire, 'lobby' the government to change their tax laws.

 

Changed to what? Taxing revenues?

 

Just saw this. I was talking about tax rates. It makes sense to defer taxes now as long as Amazon's future tax rate is the same or less.

[mrholty]

And as long as current tax laws remain in force.

 

Aggressively reinvest, build a huge empire, 'lobby' the government to change their tax laws.

 

Changed to what? Taxing revenues?

 

Just saw this. I was talking about tax rates. It makes sense to defer taxes now as long as Amazon's future tax rate is the same or less.

 

For sellers this has been issue #1 for a few years.  Beyond fee increases, changes to Amazon's buy box algorith, etc.  The 2 issues on every Amazon sellers minds are:

1.  How (When) is Amazon going to get a coherent strategy on IP claims.

2.  How can I manage what sales tax I am responsible for by state.

 

#2 is what we are talking about.  With regards to states Amazon's policy has always been to not collect sales tax on behalf of the 3rd party unless the 3P requests to.  Most 3P sellers only collect where they have a physical nexus (office, warehouse) and do not count where Amazon's warehouses are located.  This is because frankly its impossible to manage and once my goods hit an Amazon warehouse they move it all around.  I cannot say to them I only want to pay sales tax in these 5 states so put my goods in only those locations.  Therefore Amazon argues to states that they are simply a platform and the 3P sellers have to manage the agreements with the states.  Yet with regards to 3P sellers they argue that the customers are Amazon's and that I can't have much personal access.  Frankly they argue both ways when it is convenient.

 

Many states have sent letters to sellers for an amnesty program allowing them to set it tax collection in multiple states.  South Carolina has taken the lead and sued Amazon stating that the customers are Amazon's and not the 3P seller and therefore they do need to collect the revenue.  The lawsuit claims that South Carolina is owed $12.5M for Q1 2016.  On an annual basis that means the state is missing out on $60-75M.  If the money collected per state is consistent NY state is looking at a quarter of a billion $ annually.

 

 

 

[Liberty]

When Bezos asked his people to find the next Game of Thrones, they literally went back to the original well:

 

http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-newsArticle&ID=2316587

[Liberty]

http://www.reuters.com/article/us-china-amazon-cloud/amazon-sells-off-china-cloud-assets-as-tough-new-rules-bite-idUSKBN1DE0CL

[Liberty]

Amazon launching the Echo in Canada (about time!):

 

http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=RssLanding&cat=news&id=2317019

 

Also added Amazon Music to Prime subscribers in Canada. Starting with 1 million songs, which isn't that much, but guessing it'll grow over time like the Prime video library has been slowly growing in Canada..

[KCLarkin]

https://www.recode.net/2017/11/15/16653862/amazon-fresh-usps-postal-service-shutdown-grocery-delivery

 

"Amazon created the service in 2007, but did not expand it outside of its hometown of Seattle until 2013"

 

10 years since they launched Amazon fresh? Wow.

This is why I think the bears are overreacting on CVS and WBA. Amazon hasn't even decided to launch a drugstore yet. And if they do, I assume they've waited this long because they thought it would be harder than grocery.

[Liberty]

https://www.recode.net/2017/11/15/16653862/amazon-fresh-usps-postal-service-shutdown-grocery-delivery

 

"Amazon created the service in 2007, but did not expand it outside of its hometown of Seattle until 2013"

 

10 years since they launched Amazon fresh? Wow.

This is why I think the bears are overreacting on CVS and WBA. Amazon hasn't even decided to launch a drugstore yet. And if they do, I assume they've waited this long because they thought it would be harder than grocery.

 

I think groceries is kind of specific. Amazon tends to run small experiments and expand them when they work. I think with groceries, the problem is that until you have scale in both inventory and demand, you just waste too much food and/or don't have what people want as fresh as people want. Their problem was always getting to that scale, which they're now trying to solve with Whole Foods, jumping directly to being scaled in most major cities.

 

Drugs aren't perishable (at least not in the way that fresh food is), so the barrier to entry is a bit different. Seems to me like it would be mostly a regulatory/safety kind of challenge. But I wouldn't take the fresh food experience and necessarily extrapolate it to drugstore supplies. They might pass on it if they can figure how to make it work, but I doubt it'll just stay a small experiment for 10 years if they decide to go for it.

[KCLarkin]

https://www.recode.net/2017/11/15/16653862/amazon-fresh-usps-postal-service-shutdown-grocery-delivery

 

"Amazon created the service in 2007, but did not expand it outside of its hometown of Seattle until 2013"

 

10 years since they launched Amazon fresh? Wow.

This is why I think the bears are overreacting on CVS and WBA. Amazon hasn't even decided to launch a drugstore yet. And if they do, I assume they've waited this long because they thought it would be harder than grocery.

 

I think groceries is kind of specific. Amazon tends to run small experiments and expand them when they work. I think with groceries, the problem is that until you have scale in both inventory and demand, you just waste too much food and/or don't have what people want as fresh as people want. Their problem was always getting to that scale, which they're now trying to solve with Whole Foods, jumping directly to being scaled in most major cities.

 

Drugs aren't perishable (at least not in the way that fresh food is), so the barrier to entry is a bit different. Seems to me like it would be mostly a regulatory/safety kind of challenge. But I wouldn't take the fresh food experience and necessarily extrapolate it to drugstore supplies. They might pass on it if they can figure how to make it work, but I doubt it'll just stay a small experiment for 10 years if they decide to go for it.

 

I guess they now have the scale to make a more immediate impact, but I still think people vastly underestimate how difficult it is to break into these kinds of businesses.

 

--

Barrier to entry in drugs is different, but I don't even think regulatory is the main barrier:

1) Scale: CVS and WBA have enormous negotiating power with drug manufacturers, especially generics.

2) 3rd Party Payors: PBMs and insurance companies create an extremely complex system. Again, CVS and WBA have negotiating power.

3) Habit: When you buy drugs, you aren't just buying a product. How/when you use the drugs makes a big difference. Many people are more comfortable having the option to discuss with a pharmacist.

4) Demographics: The bulk of drug spending is by seniors. They are not typically first adopters.

5) Regulatory

 

I don't really want to turn this into a specific discussion about drugs. I just think the market generally is overreacting to the *potential* threat from Amazon.

 

It is probably true that Amazon's entry into these types of complicated businesses will eventually payoff for Amazon investors. I just think it will take much longer than the market thinks. The typical Seeking Alpha type analysis I see says that Amazon has immediately destroyed every category it has entered. But that is simply not true. And actually, is probably the exception rather than the rule.

 

Just a few examples:

2005 Industiral distributiion (smallparts.com)

2006 Streaming video (amazon prime)

2006 Fashion (shopbop)

2007 Online Music

2007 Groceries

 

And these aren't the "experiments" (e.g. Fire Phone). These are categories that Amazon has consistently invested in, year after year, for the past decade.

 

[Liberty]

I don't happen to believe that Amazon destroys any industry that it enters.

 

But I also don't see why a majority of common, routine drugs couldn't be sold at lower prices online by a company that hires a bunch of pharmacists.

 

A lot of the arguments about inertia were the same arguments that people had for Uber, AirBNB, and even e-commerce in general (including most recently apparel). Of course drugs are in some ways a lot more sensitive, but in many other ways, a lot easier to get people to swallow (ugh) as a mail-order-service than to go sleep in some stranger's bed or get in a stranger's car.

 

I think over time the market will likely segment itself, and the more complex stuff might stay face-to-face and the routine stuff can be mail-order. But I have no idea how fast. I think that Amazon, as a trusted online source with the best logistics network in ecommerce, is well positioned to do well there if they can figure out an approach that makes sense.