Stratechery The Amazon Empire Strikes Back
Dec 6, 2021
Dive into Amazon's ambitious moves in shipping and logistics, including leasing aircraft and chartering vessels. Discover how these strategies shape their holiday inventory management amidst rising shipping costs. The power dynamics shift, revealing small merchants increasingly reliant on Amazon's services amid container shortages. Explore Amazon's competitive edge in logistics and advertising, illustrating how its integration fosters efficiency for third-party sellers while impacting market trends favoring large platforms over smaller rivals.
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Amazon's Shipping Strategy
- Amazon chartered ships, made containers, and leased planes to control shipping.
- This helped them avoid port congestion and long wait times during supply chain chaos.
Container Confusion
- Amazon's 53-foot containers are not for shipping due to standardization issues.
- They're for domestic delivery, showing investment in that area.
Economics of Shipping
- Shipping has high fixed and marginal costs, demanding maximum utilization.
- Amazon, like Apple with foundries, cannot profitably manage this alone.