Quite frankly, at the rate they are growing, I wouldn't be surprised if they began to offer their Prime service for free or at a lower rate. One of Amazon's core competencies is their ability to keep a large enough stocked inventory that will fulfill customer's orders at anytime. Their Prime service only enhances this core competency making their products available to customers at a reasonable time frame.
I think that one of Amazon's biggest weaknesses is the inability to deliver products almost instantly. The few times I have chosen to purchase an item locally over Amazon is when I needed said item right away. While two days is nothing considering how far the inventory travels to reach customers, the reality is that most people want instant-gratification and two days is still too long.
Amazon know this. They realize that by not being able to offer true instant-gratification to shoppers, they are losing out on many sales. This is why they offer same-day shipping to some of the bigger cities in the U.S. and I imagine that it is only a matter of time before either Amazon itself or their shipping carriers are able to offer faster shipping to more locations as a way to compete with physical stores.
If this is the case, I imagine Walmart, Target and many other retail stores will see themselves in a world of trouble since Amazon already offers very competitive prices.
Is anyone familiar with other aspects of Amazon as a company? I'd be interested to know about the culture and how that affects their sales, structure and bottom line.
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