Displaying items by tag: Amazon

(Seattle)

Last week Amazon made big news as it became clear that the company had plans to launch its own full scale delivery network both for its own shipments and for any retailer. The big players in the space are FedEx and UPS, and Amazon sees an opportunity to grab market share. However, the Wall Street Journal has published a “sense check” type of article showing that it would take a massive amount of investment and many years to gain the delivery scale to truly compete with UPS and FedEx. The WSJ reports that “FedEx has roughly 650 aircraft, 150,000 trucks, 400,000 employees and 4,800 operating facilities globally to handle about 12 million shipments a day”. Amazon has just a tiny fraction of that sort of infrastructure.

FINSUM: It is going to take Amazon several years, and a lot of patience from investors, to get in a position to compete with UPS and FedEx. We would never count the company out, but it is a distant goal.

(New York)

The supposed battle between robo advisors and human advisors has largely fizzled. Evidence indicates that robos are not stealing funds from human advisors, but are instead attracting entirely new ones, increasing the total fee pool overall. However, a new robo has just launched that should perhaps be worrisome. Discount ecommerce retailer Overstock.com, which has a very diversified base of businesses, has just launched a flat fee ($9.95 per month) robo advisor. While the platform itself should not worry advisors, the implication is that much bigger tech players, like Amazon, may soon be involved, which could dramatically change the landscape.

FINSUM: If Amazon, or any of the other huge tech companies, started robo advisors, then there could be a legitimate issue for human advisors.

(San Francisco)

There has been hype for several years about the chances for the growing tech industry to absorb and dominate some of the domain of the finance sector. Examples already abound, such as tech companies taking market share in currency transfers or in every day payments. Amazon is providing payment services and financing to merchants, for example. Now big banks are fighting back, pushing regulators to subject tech companies to the same rules and scrutiny to which they are forced. They argue that not doing so will hinder transparency and threaten the global financial system.

FINSUM: This just seems like another of the many areas where a regulatory push is mounting against tech.

(Seattle)

The Whole Foods acquisition by Amazon has been somewhat of a mystery for markets. While the move sparked a great deal of fear and excitement, it is still not readily clear what Amazon will do with its new asset. That said, prices at Whole Foods are falling, and the company’s in house basic brand, 365, is pushing forward. Whole Foods 365 is the company’s new low price chain of stores. Many thought it would be shuttered under Amazon’s leadership, but it is moving ahead. The first store just opened in Brooklyn and will expand to five more locations this year.

FINSUM: We think a Whole Foods sub brand of lower priced items with the same general theme could work very well in attracting more Millennial shoppers.

(Seattle)

Amazon as a company has been nothing but an unmitigated success. But while the business on the whole has been stellar, there have been missteps, such as the venture into smartphones. But where will Amazon’s next big shot in the arm come from? Bloomberg says it is going to be in healthcare. The company is teaming up with JP Morgan and Berkshire Hathaway to make healthcare more affordable for their employees, and eventually all Americans. Bloomberg summarizes Amazon’s potential to transform healthcare best, saying “Amazon’s e-commerce operation could be used to send medication direct to patient’s homes, saving them trips to a pharmacy. Its cloud-computing division can store patient health-care records so they can be easily accessed by doctors anywhere. And its payments system could be used to automate payments with health-care providers.”

FINSUM: Say what you want from a returns perspective, but from a consumer perspective the US healthcare system is decidedly broken. Hopefully, this sort of initiative will eventually turn it around.