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July 26, 2006

AMAZON'S STOCK IS DOWN, and this report from the investor's conference call suggests that there are limits to just how far down the Long Tail Amazon can afford to go.

I notice from the transcript that a lot of people are worried about Amazon's grocery business because it's low margin. I hope that this succeeds -- as I said before, if anyone can make the Internet grocery business work, it ought to be Amazon. Then again, I haven't actually ordered anything from their grocery service yet, and I'm a huge Amazon customer. Anybody out there used them? What has it been like?

UPDATE: Reader Antoinette Aubert emails:

have ordered some things from Amazon grocery, not a lot but things I have difficulty finding in my local grocery stores. For some items it only takes a few days, but the specialty tea I ordered took 2 weeks. I didn't mind because I can't find that tea anywhere else this side of the UK pavilion at EPCOT center. So for that sort of thing they are very useful.

Because they can't stock perishable items mostly only sell in bulk they aren't good for regular grocery service. Therefore I can't use their grocery service except as a supplement so I don't know if they are going to be able to make a profit. If they could come up with a regular milk delivery service like a good milk man I would LOVE that. But I am probably wishing for the moon on that one.

Tom Holsinger emails:

I ordered a half dozen boxes of banana bread mix from Amazon just before Christmas as my local stores were out of it. Amazon's delivery from a New York grocery chain was immediate - two days as requested, and I baked a bunch of loaves for my family in time for Christmas.

I'll use Amazon again for groceries when I need something not in my local stores.

BTW, Chicago pizzerias have delivered to other states for years.

Maura Seger writes:

I've used Amazon Grocery about half-a-dozen times so far for bulk (carton or more) purchases. Ordering is easy, the selections are good and delivery is fast, especially on the two-day, all--you-eat prime deal. I'm really hoping this venture succeeds for Amazon. Backed up by a local grocery delivery service, also on-line, this means I may never have to set foot in a supermarket again.

On the other hand, David Caplan emails:

I ordered some Jay’s Potato Chips from Amazon on June 1 and today I got the third (I think) notice that there was a delay in the shipment. I suspect they’ll never send them. I can understand running out of stock in various consumer items, but potato chips? It seems as if something else is going on here.

But Grace Nunez writes:

I recently ordered dishwashing detergent tablets at a competitive price. I had to order 5 packages at one time, but that was no big deal.
And shipping was “free” using Amazon Prime.

I anticipate ordering much more. What’s not to like – I don't enjoy grocery shopping, shipping is free, clicking items with my mouse is way easier than a pushing a cart down the store aisles and I've been very pleased with Amazon’s service. I'm surprised that more people are not using this new feature.

I guess I'll have to try it.

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