Re:Amazon Unveils One-Hour Delivery Service
by saosebastiao on Thursday December 18, 2014 @12:53PM
(#8768610)
Dominos can do it for Pizzas because the profit margin on Pizzas is about as close to 100% as you can get, and delivery-person pay is about as low as you can get, combined with subsidy via tips. A $20 pizza will have a higher total gross margin than a $100 anything-retail.
Amazon is going to lose money on this, and it will probably only ever be feasible (even as a net loss) in a handful of zip codes in the US.
If Dominos can do it for pizzas, amazon can do it for much bigger ticket items.
PLUS they are not incurring the cost of shipping the item to a prime member. Right now for every physical good prime purchase they spend money on shipping.
Also see: Amazon is not worried about short term profit [1]
They have probably planned to not profit for a while in exchange for increased cashflow. Again for Amazon, profit isn't first, the customer is.
[1] http://www.businessinsider.com/amazons-jeff-bezos-on-profits...