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Though food is generally a low-margin business, AmazonFresh might have some profit potential: 1)...

Though food is generally a low-margin business, AmazonFresh might have some profit potential: 1) Amazon's (AMZN) push into grocery delivery could help it sell more general merchandise as consumers bundle orders, according to Wells Fargo analyst Matt Nemer. 2) The company charges customers in the Seatttle area about $8 to $10 for most deliveries to help it cover costs, although orders over $100 can be free. 3) An anecdotal report from a pie maker in Seattle suggests Amazon slices off $2 for every $9 pie sold through AmazonFresh. 4) A buzz-worthy rewards program could also help the company boost overall sales and ratchet up margins.
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Comments (7)
  • HS
    , contributor
    Comments (215) | Send Message
     
    Why would the profit margins of AMZN be significantly better than FreshDirect and Webvan?

     

    Does adding TV sets, books and other merchandize into expensive airconditioned deliveries make a lot of financial sense?

     

    AMZN is trying to compete with pretty much everyone (ebay, GOOG, WMT, NFLX - just to name a few) and has yet to find the single market where they managed to create a significant barrier to entry.
    6 Jun 2013, 09:04 AM Reply Like
  • Gary J
    , contributor
    Comments (4784) | Send Message
     
    Do you mean does adding merchandise (correct spelling) to deliveries as opposed to adding nothing make sense? Of course!
    6 Jun 2013, 09:09 AM Reply Like
  • jumpnjoey77
    , contributor
    Comments (601) | Send Message
     
    Don't think I would ever embrace having someone else choose my fruits and veggies vice going to the farmer's market.
    6 Jun 2013, 09:09 AM Reply Like
  • Philip Marlowe
    , contributor
    Comments (1067) | Send Message
     
    Yeah, I want to fondle my tomatoes before I buy them.
    6 Jun 2013, 01:18 PM Reply Like
  • jpintoctr
    , contributor
    Comments (460) | Send Message
     
    Amazon was a great when it was considered a pioneer in the e_Cultural Industry. Books and lettuces don't mix well.
    6 Jun 2013, 09:09 PM Reply Like
  • Gary J
    , contributor
    Comments (4784) | Send Message
     
    Nor do they need too.
    7 Jun 2013, 07:30 AM Reply Like
  • HZLIU
    , contributor
    Comments (212) | Send Message
     
    Amazon just feed the Wall Street what they want, the revenue growth at any cost. (1) My local grocery offers online shopping and delivery for couple of years. I don't think it will improve any margin. (2) Selling Kindle in China is a must move, otherwise you can not explain to Wall Street. Whether there is any money to be made is another story? The tablets in China are much cheaper than Kindle and E-books and Apps are easily downloaded everywhere.
    7 Jun 2013, 10:49 AM Reply Like
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