Amazon is no longer on Day 1?

Amazon is well-known for focusing on customer experience. Its founder, Jeff Bezos, famously said that the company must always be on Day 1 to keep itself hungry and creative. However, my recent disappointing experience with its services makes me wonder whether the company is no longer on Day-1 mode. Here is what happened to me

It’s usually more expensive than other sites

Amazon used to boast reasonable prices and unrivaled convenience. For a lot of product items, you could save a few cents at other retailers, but when combined with frictionless delivery that Prime offered, the competitive prices were tough to beat. Unfortunately, prices on Amazon nowadays in many cases are anything but competitive.

Merchants love to sell through Amazon because they bring unmatched traffic and additional revenue. However, the giant retailer also charges up to 19% of sales for the privilege of being on their online store, BEFORE any other fees. Sellers either have to eat the cost in exchange for more sales volume or raise prices to maintain their profit margin. As a result, we see merchants choose the latter option, making prices on Amazon so much higher than on other retailers. Here are a few examples:

Mochiko Sweet Rice Flour is 33% cheaper on H-Mart than on Amazon
Yamaroku Soy Sauce is twice as expensive on Amazon as it is on The Rice Factory
E-Fa Tapioca Pearls are 20% more expensive on Amazon than on Walmart

I assure you that I didn’t have to spend hours finding these examples. They are just a few among the items that my wife and I wanted, looked for and bought somewhere else to save money. It happened so often that we now consider Amazon the first check on item and the last resort. In other words, we looked for stuff on Amazon to get reviews and information before going to other sources for more competitive prices. If there is no better option, we head back to Amazon for consideration. I became a Prime member in 2017. For the first 3 years or so, shopping on Amazon was almost my automatic first choice. That’s how far my experience with the company has fallen.

The phenomenon is not exclusive to Amazon’s online store. They recently raised the minimum grocery order threshold from Amazon Fresh for free delivery to $150. That’s many times higher than the usual $35 threshold mandated by other retailers like Target or Walmart. The change was reportedly aimed at raising the profitability of Amazon Fresh. You must wonder how unprofitable it has been before and how much Amazon leadership really cares about customer experience.

Deliveries are late more often

I ordered a cat toy one week ago and today learned that the order was canceled because it was undeliverable. My wife order some hair clips during Christmas 2022. The item was never delivered. I contacted Amazon Customer Service and was assured that a replacement would arrive in 4-5 weeks. Today, I was informed that order was, too, undeliverable and had to be canceled. When I shared my experience with two of my colleagues, they concurred, saying that it recently took longer for their orders to arrive as well. I would understand if we were still restricted to stay at home like we were during Covid. But we are not. Hence, what reason could there possibly be? Why would delivery quality decline so badly? If prices are higher and convenience is not a guarantee, what could justify the Prime membership that customers pay to Amazon?

Search results are littered with ads

One of the biggest benefits that Amazon brings is the amazing range of products and merchants on its platform. Type any product you want and Amazon will return with possible selections, along with reviews from other buyers. However, search results on Amazon’s website are not as authentic as they once were. A formal complaint by a coalition of labor unions claimed that around one out of every four Amazon search results on Amazon are paid ads. An investigation by Washington Post found that in some cases, third-party sponsored products made up most, if not all, search results. Worse, ads on Amazon look indistinguishable from authentic listings. As a consequence, buyers are NOT presented with the best options based on prices, value and customer reviews. Instead, buyers see what hungry sellers want them to see and Amazon lets them because that high margin from advertising dollars is just too good to pass up.

Source: Washington Post

In short, as a long-time Prime member, I have been pretty disappointed with my recent experience with Amazon. As a shareholder, I am worried about the company’s future outlook. I know my wife, my two colleagues and I are only a sample of four. Our experience might be an outlier, but at the same time, I don’t know how it is for millions of other customers. Customer orientation and satisfaction were once the bedrock of Amazon’s competitive advantages. They leveraged the trust and loyalty of customers into great bargaining power in negotiations with vendors. Yet, I can’t help but feel that the tech/retail giant is losing its mojo. And for the first time since I came to the US, I consider not to renew my Prime annual membership and to take my business elsewhere.

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