Amazon’s same DAY delivery

We blogged earlier about how online shopping sites have a big advantage over local businesses in not having to charge sales tax.  So states and now Congress have been trying to pass laws to collect those taxes.  Amazon used to fight those efforts, but no longer, saying, in effect, throw me into that briar patch. From Farhad Manjoo in Slate:

Why would Amazon give up its precious tax advantage? This week, as part of an excellent investigative series on the firm, the Financial Times’ Barney Jopson reports that Amazon’s tax capitulation is part of a major shift in the company’s operations. Amazon’s grand strategy has been to set up distribution centers in faraway, low-cost states and then ship stuff to people in more populous, high-cost states. When I order stuff from Amazon, for instance, it gets shipped to California from one of the company’s massive warehouses in Kentucky or Nevada.

But now Amazon has a new game. Now that it has agreed to collect sales taxes, the company can legally set up warehouses right inside some of the largest metropolitan areas in the nation. Why would it want to do that? Because Amazon’s new goal is to get stuff to you immediately—as soon as a few hours after you hit Buy. . . .

It’s hard to overstate how thoroughly this move will shake up the retail industry. Same-day delivery has long been the holy grail of Internet retailers, something that dozens of startups have tried and failed to accomplish. (Remember Kozmo.com?) But Amazon is investing billions to make next-day delivery standard, and same-day delivery an option for lots of customers. If it can pull that off, the company will permanently alter how we shop. To put it more bluntly: Physical retailers will be hosed.

via Amazon same-day delivery: How the e-commerce giant will destroy local retail. – Slate Magazine.

About Gene Veith

Professor of Literature at Patrick Henry College, the Director of the Cranach Institute at Concordia Theological Seminary, a columnist for World Magazine and TableTalk, and the author of 18 books on different facets of Christianity & Culture.

  • Pete

    We’ll drown in a sea of delivery trucks.

  • Pete

    We’ll drown in a sea of delivery trucks.

  • Ray

    I got to visit the Amazon distribution center in Dulles. We had received two copies of an item we ordered but had opened both of them, so when we went to return one, we were told it would cost to send it back. The guy at the UPS store told me I could just drive it back to the seller. I thought the package had come from Seattle, since that’s where Amazon was located, right? Wrong. A quick glance at the return address showed it originated from an industrial park near Dulles airport. When I went there I found a very nondescript warehouse (actually, many). The one I was looking for had the Amazon logo on the door, so I walked in and found a chute for returns. You were prevented, via locked doors and gates, from going anywhere else except the bare lobby and I didn’t see anyone around to ask questions of. Strange.

  • Ray

    I got to visit the Amazon distribution center in Dulles. We had received two copies of an item we ordered but had opened both of them, so when we went to return one, we were told it would cost to send it back. The guy at the UPS store told me I could just drive it back to the seller. I thought the package had come from Seattle, since that’s where Amazon was located, right? Wrong. A quick glance at the return address showed it originated from an industrial park near Dulles airport. When I went there I found a very nondescript warehouse (actually, many). The one I was looking for had the Amazon logo on the door, so I walked in and found a chute for returns. You were prevented, via locked doors and gates, from going anywhere else except the bare lobby and I didn’t see anyone around to ask questions of. Strange.

  • Tom Hering

    Same day? Not good enough – and privacy be damned. I want Amazon to know absolutely everything about me, so they can send me what I want before I order it. Before I myself know I want it.

  • Tom Hering

    Same day? Not good enough – and privacy be damned. I want Amazon to know absolutely everything about me, so they can send me what I want before I order it. Before I myself know I want it.

  • Michelle

    My husband and I shop at Amazon a lot. We are one of THOSE people who “showroom” (go to physical stores only to buy it cheaper online). Some people say it’s people like us who drive up the prices everywhere, but I would never have done it if it weren’t easier and cheaper to buy things online in the first place. Was the chicken or the egg first? The world may never truly know for sure.

    (Also, I don’t particularly feel the need to have same day delivery. I think part of the fun of buying online is waiting for whatever it is that I bought.)

  • Michelle

    My husband and I shop at Amazon a lot. We are one of THOSE people who “showroom” (go to physical stores only to buy it cheaper online). Some people say it’s people like us who drive up the prices everywhere, but I would never have done it if it weren’t easier and cheaper to buy things online in the first place. Was the chicken or the egg first? The world may never truly know for sure.

    (Also, I don’t particularly feel the need to have same day delivery. I think part of the fun of buying online is waiting for whatever it is that I bought.)

  • Joe

    Michelle — the Chicken was first. Genesis 1:20

  • Joe

    Michelle — the Chicken was first. Genesis 1:20

  • Jon

    What?! Charging sales tax now? Oh well. There goes that advantage. No more Amazon Prime membership for me then.

  • Jon

    What?! Charging sales tax now? Oh well. There goes that advantage. No more Amazon Prime membership for me then.

  • Dr. Luther in the 21st Century

    @#4 I am a compulsive tracking checker.

    I do some show-rooming and depending on price. I may buy at the brick and mortar if the cost is pretty close to the item plus shipping. I also weight if instant gratification is worth it (not often).

    I like the idea of same day shipping, but I doubt Amazon wanting to do same day shipping has any bearing on the fighting sales tax. They have already lost the fight. They lost it the day, the congress critters got the idea into their head. Besides, they will be able to negotiate deals with local governments that will offset the tax burden. The way the economy is right now, municipalities will do just about anything to get a few more jobs in their area.

  • Dr. Luther in the 21st Century

    @#4 I am a compulsive tracking checker.

    I do some show-rooming and depending on price. I may buy at the brick and mortar if the cost is pretty close to the item plus shipping. I also weight if instant gratification is worth it (not often).

    I like the idea of same day shipping, but I doubt Amazon wanting to do same day shipping has any bearing on the fighting sales tax. They have already lost the fight. They lost it the day, the congress critters got the idea into their head. Besides, they will be able to negotiate deals with local governments that will offset the tax burden. The way the economy is right now, municipalities will do just about anything to get a few more jobs in their area.

  • JonSLC

    Won’t shipping companies gain leverage over Amazon? If Amazon creates the expectation of same-day delivery and their shipping contractors know it, can’t the shippers keep increasing the cost for Amazon? Since they’ll know Amazon won’t want to renege on their same-day pledge?

    http://jonathanlast.com/2012/07/12/the-danger-of-overnight-delivery/

  • JonSLC

    Won’t shipping companies gain leverage over Amazon? If Amazon creates the expectation of same-day delivery and their shipping contractors know it, can’t the shippers keep increasing the cost for Amazon? Since they’ll know Amazon won’t want to renege on their same-day pledge?

    http://jonathanlast.com/2012/07/12/the-danger-of-overnight-delivery/

  • Dr. Luther in the 21st Century

    @#8 Easily solved by creating Amazon Shipping. Amazon is big enough that the major players won’t risk it.

  • Dr. Luther in the 21st Century

    @#8 Easily solved by creating Amazon Shipping. Amazon is big enough that the major players won’t risk it.

  • Tom Hering

    @ 8, won’t the shippers compete with each other to get Amazon’s business? By offering the lowest possible rates? Oh, and Amazon wants to make next-day delivery its standard service, not same-day. Same-day would be an upgrade.

  • Tom Hering

    @ 8, won’t the shippers compete with each other to get Amazon’s business? By offering the lowest possible rates? Oh, and Amazon wants to make next-day delivery its standard service, not same-day. Same-day would be an upgrade.

  • JonSLC

    @9 &10: Good points. Competition between shipping companies and the threat of going it alone are bargaining chips that Amazon holds. I was just thinking that when Amazon sets the bar high for shipping speed, any disruption in service (changing carriers, rolling out its own shipping service) might cause them to default on the same-day or next-day promise to customers. They could guard against that to a large extent, though, I suppose.

  • JonSLC

    @9 &10: Good points. Competition between shipping companies and the threat of going it alone are bargaining chips that Amazon holds. I was just thinking that when Amazon sets the bar high for shipping speed, any disruption in service (changing carriers, rolling out its own shipping service) might cause them to default on the same-day or next-day promise to customers. They could guard against that to a large extent, though, I suppose.

  • Tom Hering

    We havn’t discussed the possible destruction of local retail. More than a few people who used to have good jobs now work in retail, and there aren’t enough retail jobs for all the young people who want them. What sector do Americans step down to next for employment? (They won’t become warehouse workers for Amazon, as Amazon is automating its warehouses with robots.)

  • Tom Hering

    We havn’t discussed the possible destruction of local retail. More than a few people who used to have good jobs now work in retail, and there aren’t enough retail jobs for all the young people who want them. What sector do Americans step down to next for employment? (They won’t become warehouse workers for Amazon, as Amazon is automating its warehouses with robots.)

  • http://www.redeemedrambling.blogspot.com John

    Um, no. Amazon ships from Kentucky because the UPS hub is in Louisville. A large portion of the US population can get next day service shipping ground from this centralized location. And Amazon has an interest in internet taxes – they can survive, but startups won’t.

  • http://www.redeemedrambling.blogspot.com John

    Um, no. Amazon ships from Kentucky because the UPS hub is in Louisville. A large portion of the US population can get next day service shipping ground from this centralized location. And Amazon has an interest in internet taxes – they can survive, but startups won’t.

  • Klasie Kraalogies

    Tom @ 12: I think that what could happen with retail is the move into specialty / experience retail – personal, face to face attention, high quality help etc – which means that high-end retail will survive on the one end, and sheer volume retail on the other (Box stores), with less and less in between.

    Online grocery shopping is still relatively slow to develop here in Canada, it seems, but in South Africa it was already common in the big centers when I left in ’06. That is a major game changer in itself…

  • Klasie Kraalogies

    Tom @ 12: I think that what could happen with retail is the move into specialty / experience retail – personal, face to face attention, high quality help etc – which means that high-end retail will survive on the one end, and sheer volume retail on the other (Box stores), with less and less in between.

    Online grocery shopping is still relatively slow to develop here in Canada, it seems, but in South Africa it was already common in the big centers when I left in ’06. That is a major game changer in itself…

  • Lumpenkönig

    Wal-Mart has an extensive distribution network and brick and mortar stores. Buy online and have the option to pick it up at the store. I could see Amazon building itself a distribution network similar to Wal-Mart.

    On the other hand, I always thought Amazon was not a retailer, but a broker. Observe how many independent sellers use Amazon and ship products directly to you from their locations and not via an Amazon warehouse.

  • Lumpenkönig

    Wal-Mart has an extensive distribution network and brick and mortar stores. Buy online and have the option to pick it up at the store. I could see Amazon building itself a distribution network similar to Wal-Mart.

    On the other hand, I always thought Amazon was not a retailer, but a broker. Observe how many independent sellers use Amazon and ship products directly to you from their locations and not via an Amazon warehouse.

  • Helen K

    Ray @ 2. Interesting you could make a return at a distribution center in TX. Couple of years ago, I ordered the wrong kind of detergent. It was liquid and pretty heavy. It came from a distribution a.k.a. warehouse about 20 miles down the road from us in the greater Phoenix area. I called Amazon to inquire about returning. They insisted I had to send it back to the “returned items” center in Kentucky. Because it was my carelessness in ordering the wrong formula, I ended up paying about $20.00 to return it. I’m wondering if the customer rep I spoke with on the phone knew the correct procedure, but he claimed they had no mechanism for returns here locally. I use Amazon frequently and have Prime. Much of their merchandise comes from Las Vegas and that may be a reason I get items so quickly. Just found your experience interesting. In fact yesterday I placed a small order though Prime expecting it to arrive tomorrow. Surprise, it was on the doorstep when we arrived home this afternoon.

  • Helen K

    Ray @ 2. Interesting you could make a return at a distribution center in TX. Couple of years ago, I ordered the wrong kind of detergent. It was liquid and pretty heavy. It came from a distribution a.k.a. warehouse about 20 miles down the road from us in the greater Phoenix area. I called Amazon to inquire about returning. They insisted I had to send it back to the “returned items” center in Kentucky. Because it was my carelessness in ordering the wrong formula, I ended up paying about $20.00 to return it. I’m wondering if the customer rep I spoke with on the phone knew the correct procedure, but he claimed they had no mechanism for returns here locally. I use Amazon frequently and have Prime. Much of their merchandise comes from Las Vegas and that may be a reason I get items so quickly. Just found your experience interesting. In fact yesterday I placed a small order though Prime expecting it to arrive tomorrow. Surprise, it was on the doorstep when we arrived home this afternoon.


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