Amazon Hints At Its Global Domination Strategy

Tyler Durden's picture


While Amazon's online business is booming (in revenues - but decidedly not profits), its somewhat sunning inactions at CES this past week raised more than a few eyebrows. Quietly and with no grandiose Michael-Bay-style presentation, Wired reports the 'we-can-make-a-profit-any-time-we-like-if-we-really-wanted' company placed an Amazon Vending Machine at the Las Vegas Airport. As Wired continues, any foray by Amazon into the world of offline retail is a big deal... when Amazon ventures into the physical world - whether with in-store delivery lockers or grocery trucks or vending machines - the company’s sheer scale and ambition demand that you think in terms of world domination. Hhmmm...


Image via GeekWire:


Via Wired,

...this isn’t just a nice piece of marketing. Those attendees were right to turn their heads. Though there’s nothing new about electronics vending machines, any foray by Amazon into the world of offline retail is a big deal. When Amazon ventures into the physical world — whether with in-store delivery lockers or grocery trucks or vending machines — the company’s sheer scale and ambition demand that you think in terms of world domination.




Picture a near-future where high-tech Amazon vending machines are on every corner selling the kinds of things that typically take shoppers to Walgreen’s or CVS. The machines would take up way less real estate than stores, which would keep overhead low. They could go just about anywhere — say, the basements of big-city apartment towers or the courtyards of suburban residential complexes. And they could be refilled by drivers traveling their daily Amazon Fresh delivery routes (or, you know, by drones).




As Amazon has made abundantly clear, it’s never been content to limit itself to any one identity. Its primary business, online retail, is a booming success with customers. But offline retailers from Barnes & Noble to Bed Bath & Beyond to Sears are floundering, and Amazon may see an opportunity. It reinvented shopping with its online store. Why not do the same offline? Perhaps that humble vending machine is where that starts.


We are a little more skeptical that this is indeed the strategy that will mean world domination but for sure, it means fewer per-sales employees as yet more aspects of the global supply chain from production to sale becoming automated... Of course, one can only hope it helps operating margins...


or free cash-flow...



Though, we suspect it will be merely another way for Bezos to push off any inevitable 'a-ha' moment on the stock for another product cycle.

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Mon, 01/13/2014 - 21:58 | 4329253 Boris Alatovkrap
Boris Alatovkrap's picture

Amazombie Apocalypse!

Mon, 01/13/2014 - 22:35 | 4329347 SafelyGraze
SafelyGraze's picture

boots on the ground report

drove past a "jcp" today. noticed there were zero cars in the parking lot. thought maybe the store had closed.

not closed. saw people inside.

drove around to other entrance. the salon/catalog entrance. counted a couple of dozen cars.

wandered inside. 

three or four people were saloning. catalog desk empty.

9 sales associates were out on the floor. 

11 "shoppers"

did not observe a single transaction during 15 minute tour.

paced off the dimensions of the store: about 275x225 feet, for 60k square feet

so each salesperson had about an 80x80 foot territory

the racks were totally stocked in the store


like being in a museum

go out and video your local retail stores while you still can

upload or otherwise archive

preserve for posterity 

"what shopping was like before amazon"


Mon, 01/13/2014 - 23:32 | 4329585 mmanvil74
mmanvil74's picture

Yup. America's "service economy" is in for a shocker - most of those services are practically worthless.  Who wants to drive to Sears or Walgreens when you can get a toothbrush, a tablet, and a bag of Doritos at a machine down the hall, on the corner, or anywhere else that isn't serviced by any human being but is 30% cheaper than the stores that offer "customer service and knowledgeable staff"?  There is almost nothing knowledgeable about staff these days, apart from how to watch you swipe your card and "thank you" for your purchase.  

So, what does this mean?  Well, to me it means the suburban sprawl with their ongoing retail strip malls become less and less desirable.  People will prefer the extremes... either high density (live in a big city) or ultra low density (live in the country).  The "sub" part of the "burban" becomes a fools life.  

This trend has been in place for a long time and the way Amazon is changing retail just furthers the trend.  Even Walmart could suffer from this trend - maybe they were just an intermediary success while the real trend of manufacturer direct to customer retail srpead its wings.  Who wants to elbow people at Walmart when the stuff they need is either available at a machine on the corner or online with a few clicks?

Fine, so how will people earn or make money in what amounts to a dysfunctional economy?  Bitcoin!  Once you subtract the government and the bankers, its amazing how much money is left over.

Mon, 01/13/2014 - 23:48 | 4329641 walküre
walküre's picture

Yeah, I can see how hundreds line up at a self serve kiosk outside the Costco warehouse and waiting for the kiosk robot to fill their shopping cart, all automated inside with robot driven shopping carts and so on. Promise the kiosk line-ups won't be longer than 10 people at time? Pretty please?

Good luck getting that 32-roll toilet paper mothereffer through a vending machine.

Tue, 01/14/2014 - 01:18 | 4329808 Boris Alatovkrap
Boris Alatovkrap's picture

In Russia, your are wait 10 minute just to find out you are back of wrong line! Praise and glory to be of kiosk and rapid Western style sale transaction!

Tue, 01/14/2014 - 04:48 | 4329667 Say What Again
Mon, 01/13/2014 - 23:59 | 4329675 Stuck on Zero
Stuck on Zero's picture

That wasn't the Downtown Detroit JCP was it?


Tue, 01/14/2014 - 03:24 | 4329983 Magnum
Magnum's picture

Go to Germany and find big specialty stores dedicated to things like shoes. Have a sales rep fit you in just the right pair of well-made shoes. That is living the high life. This online flea market I can do without.

Tue, 01/14/2014 - 16:09 | 4331474 putaipan
putaipan's picture

retail is just a cover for their work as a server farm for the gubbmint. ditto google.

Tue, 01/14/2014 - 09:25 | 4330260 samcontrol
samcontrol's picture

please please please, I know you guys hate trading ideas and shit but can someone PLEASE tell me the best way to short this "thing" ..

Mon, 01/13/2014 - 22:01 | 4329258 Crash Overide
Crash Overide's picture

Amazon is like the digital version of Walmart, Amazombie works...

Mon, 01/13/2014 - 22:30 | 4329328 Boris Alatovkrap
Boris Alatovkrap's picture

Zombie is not work, but is only walk blank stare, distracted, and is consume everything in path. Coming soon to large USSA city near you are!

Mon, 01/13/2014 - 22:54 | 4329418 JackWills
JackWills's picture

Their prices are not so hot actually, been finding better deals on newegg and other merchants

Mon, 01/13/2014 - 23:43 | 4329623 Troll Magnet
Troll Magnet's picture

You've got to be a moron to shop at amazon. They're not cheap, they charge taxes and their delivery is s-l-o-w as fuck. Who the fuck shops at amazon??!

Mon, 01/13/2014 - 22:03 | 4329261 NoDebt
NoDebt's picture

I am unafraid of a retailer dominating the world.  Their claims of a profit "any time they choose" sounds a lot like an alcoholic claiming they could stop drinking and straighten out their act any time they choose.  Or the Fed claiming they could end "emergency" monetary stimulus programs without crashing the financial system.

Mon, 01/13/2014 - 22:33 | 4329338 Boris Alatovkrap
Boris Alatovkrap's picture

For many year, Boris is claim can stop vodka drink any time. Boris recall at least 100 time to quit drinking. Any time!

Tue, 01/14/2014 - 02:33 | 4329905 ebworthen
ebworthen's picture

Tomorrow Boris, tomorrow.

You and me, tomorrow.

Mon, 01/13/2014 - 22:02 | 4329263 Moe Hamhead
Moe Hamhead's picture

In the end, when all is said and done--- Amazon is just another Sears---and will end the same!

Mon, 01/13/2014 - 23:35 | 4329592 Lucius Corneliu...
Lucius Cornelius Sulla's picture

Sears did not have a digital supply chain nor a cloud server service.  Besides, Sears was a great business that dominated retail for decades.  So even if Amazon's physical supply chain is compared to Sears in its glory days then they the comparison puts Amazon in good company.

Mon, 01/13/2014 - 22:05 | 4329268 NoWayJose
NoWayJose's picture

I am hard pressed to see any profits if Amazon sets up same day delivery (more infrastructure and internal logistics costs), has to pay drone flight insurance, and if this expansion stops their sales tax exemptions.

Tue, 01/14/2014 - 00:39 | 4329757 andrewp111
andrewp111's picture

Amazon already collects sales tax since it has a physical operation in damm near every state. They are collecting in Virginia now.

Tue, 01/14/2014 - 02:26 | 4329900 bunnyswanson
bunnyswanson's picture

Destroying competition is the first goal.  The profits will be there when there is no where else to shop but Amazon.  The Wal-mart store is even losing business to Amazon where delivery to your door saves time and cost of gas.  Free shipping if total is something like 50.00 or if you are a card carrying Amazon shopper, possibly all of the time.

When there is no competition, the gloves come off.  Business loans have become obsolete so they will not have to worry about competition.  American businesses on Main Street are being left in the dust, along with the jobs and revenue which keep the local street lights on, paving the road to Agenda 21 entering with that special kind of funding which is nonbinding but binding at the same time.

This is an attempt to destroy America.  Not through armed attack but financial war and every other strategy, now that the "jesuits" have all their pawns in place in every major industry and decision-making body.

There was a discussion in a room about this - about this war that was won but wasn't.  Snipers R Us is calling the shots now.  USD will be worth less than nothing by the time the financial snipers are finished making the US citizens pay for their "over turn unagreeable standing govts in the name of democracy and make Americans pay for it."  Bag of socks will be 500 bucks.

Mon, 01/13/2014 - 22:10 | 4329279 fijisailor
fijisailor's picture

Yea I saw that machine in Vegas.  The prices were the usual outrageous airport prices.  The gadgets are much cheaper on Amazon on the web.

Mon, 01/13/2014 - 22:29 | 4329325 Skateboarder
Skateboarder's picture

Craigslist has the best deals. People often buy accessories, use stuff for a few days, and sell it off on CL (because they already have iPad Edible and iPhone(N!) (<- factorial)). I saw a brand new Nexus 7 + OEM case for $150 on CL yesterday. If I had a lesser conscience, I would grab that shit in a heartbeat, but I'm still on the search for the ultimate x86 tablet to run traditional full-desktop Linux OSes on.

All native Amazombie/Sploogle/Microballs OS builds are sketch.

And lololo at the idea of vending machines selling shit at every street corner. Nigga please.

Tue, 01/14/2014 - 01:15 | 4329802 Tijuana Donkey Show
Tijuana Donkey Show's picture

Reload that shit with Linux or

Why x86? The only option is something from M#FT and friends, and it will be shitty. My preference is Macbooks with Linux. Via la Root

Tue, 01/14/2014 - 02:01 | 4329879 Skateboarder
Skateboarder's picture

Ubuntu is compromised post 10.04, methinks. 10.04, though unstable, is a decent build. 9.04 is more stable. However, Puppy Linux is the best, and I want to be able to put it on a nice piece of touch hardware and write drivers for it. Get the puppy tablet community going. Execution from RAM, low resource consumption - these are the hallmarks of great operating systems.

Tue, 01/14/2014 - 03:12 | 4329943 Musashi Miyamoto
Musashi Miyamoto's picture

After a bout paranoia this weekend I have moved 50% of my web traffic and all of my productivity into Whonix-Workstation. While I admit it is lacking in certain eye-candy related aspects it serves several unmet needs. I recommend it for all those that want the premium privacy platform.

"This is the only way we know of that can reliably protect your anonymity from client application vulnerabilities and IP/DNS and protocol leaks"

Tue, 01/14/2014 - 02:32 | 4329904 ebworthen
ebworthen's picture

OMG...bought a refurb Gateway mini-desktop for $144 with Windows 8 so I can learn it if I have to support it for the job I am still trying to obtain.

Decent hardware and a steal considering I'd pay $90 for the O.S. alone.

Windows 8 is the biggest dump Microsoft has taken in a LONG time.

I've used Ubuntu but need to stay current on sheeple-ware.

Ubuntu was head and shoulders above Gnome.

But...wading into the weeds as far as support.

Linux users don't need support ;-)

Apple is just too damn expensive.

Marketing O.S.'s anymore.

Not Operating Systems.

Mon, 01/13/2014 - 22:14 | 4329289 Cabreado
Cabreado's picture

Amazon is in the very slow process of hurting itself, and it doesn't know how to stop.

For it to start making money (rather than feed ego), it must change its personality, and that just doesn't happen...

Tue, 01/14/2014 - 00:09 | 4329696 odatruf
odatruf's picture

I think it is in the works.  I expect a deal with a major retail outfit *cough - Staples - cough* anytime.  Follow the restructuring at Staples and compare managment org charts and small online delivery 'locker' based projects.



Mon, 01/13/2014 - 22:18 | 4329297 GumbyMe
GumbyMe's picture

Webvan in the making.

Tue, 01/14/2014 - 01:04 | 4329783 pitz
pitz's picture

Amazon actually bought the corpse of WebVan.  Tells you everything you need to know.

Mon, 01/13/2014 - 22:18 | 4329298 wisehiney
wisehiney's picture

I am of a mind to buy the little mom and pop shop down the street and kick amazon in her big ass.

Mon, 01/13/2014 - 22:18 | 4329299 Catullus
Catullus's picture

Amazon is building a drone delivery service. Amazon has spent an incredible amount of money developing a tablet that no one uses. Amazon has never made a net profit over any 12 month period. Amazon has a vending machine in the lobby of their corporate offices that gives out 25 cent blowjobs which employees jokingly call the "Cone of Silence".

Only one of those things is false.

Tue, 01/14/2014 - 00:26 | 4329740 css1971
css1971's picture

Drones? To deliver stuff? Are you taking the piss?

Big companies turn into fishing expeditions when they run out of ideas in their core business. Amazon, Google et al are there. This is where they burn shareholder value on their executive's "genius" egos.

Mon, 01/13/2014 - 22:19 | 4329303 Rising Sun
Rising Sun's picture

buy puts

Mon, 01/13/2014 - 22:24 | 4329316 DirkDiggler11
DirkDiggler11's picture

Amazon sucks, it's that simple. A few years ago they actually did a decent job. Common everyday items at the lowest price around, if you didn't mind waiting for the item and shipping costs. Now they "sell" far too much crap, and most of it from 3rd party "vendors" who are some shady operators. Buyer Beware no doubt !

There is a niche in the market for people that actually carry inventory these days. A few months ago we had our washing machine go out, and the dryer was not far behind. So, I wanted to get a new washer and dryer that weekend while I had time to install them. Nobody had any damn inventory where I could purchase the unit there on the spot and take the damn thing home with me. EVERYONE, Home Depot, Lowes, Sears, Best Buy, you name it all would have to order them from some other warehouse and it would take a minimum of a week to get the units in. Of course the wait at Sears was almost a month, go figure. I never have liked those bait and switch assholes anyways. Long story short, I ended up at Brandsmart, a regional appliance chain that I don't exactly love, and they only have about 3 stores in Atlanta. You walk thru the door and you have to beat the sales people off you with a stick. They have bright neon signs all over the store that remind me of something "Crazy Eddie" would have loved. Anyways, at least their salespeople know the product they are selling, unlike the dumb-ass 20 something's at Best Buy that are just wondering when they can next sneak out back behind the dumpster and take a few more bong hits. So, Brandsmart had the units I wanted in stock, so I loaded them up in my truck right before they closed and took them home, managing to get both units installed right before midnight. There is something to be said for actually having inventory on hand these days, which is why local retailers such as Ace and True Value hardware stores are making a comeback and popping up left and right around Atlanta.

So, let Amazon keep expanding, and I will keep on shopping local until that beast explodes because they can do nothing better than their competition.

Mon, 01/13/2014 - 22:33 | 4329337 willwork4food
willwork4food's picture

Thanks for that post. It's good to have actual inventory, and you might have given us ideas of starting a new trend. But having it tends to be costly, which is why everything from building materials to condoms has been JIT delivery.


Mon, 01/13/2014 - 23:08 | 4329477 walküre
walküre's picture

As long as you don't pay yourself billions in stock options and have to worry about shareholder value and making your board members filthy stinking rich at the expense of your product, your service and last but not least at the expense of the quality of your staff, you simply cannot go wrong with decent inventory on hand in the next coming years when this whole online shopping craze peaks and customers get pissed off enough to wander into your store to pick up what they need right then and there and maybe pick up something else.

It's the greed of corporate America that has destroyed the economy. Strip away the greed, trim the real fat at the top and become a successful retailer, merchant or manufacturer.

Oh by the way, you are actually putting real people to work and paying real wages that can make a difference in your community where you live and maybe want to become politically involved at the grass roots level.

Trust me, the parties in the Hamptons with the same people, boring each other to death and just gloating how much more money they have than the next guy are not for you.

TPTB, Wall Street, Corporate America, Corporate Washington all that is so ineffective and unsustainable which is why they need to constantly give each other blow jobs and invent a new scheme for the circle jerk where only they get rich and screw everyone else.

It's done. They're done. They are useless and obsolete. They are a human error, a malfunction. Completely undesired and outnumbered. As humans we shed the tail so to speak, and as humans we're going to shed the parasites.

Mon, 01/13/2014 - 23:19 | 4329530 U4 eee aaa
U4 eee aaa's picture

Having it tends to be costly but not as costly as losing the sale to the guy who actually has stock on hand and is stealing your customer

Tue, 01/14/2014 - 00:42 | 4329761 FilthyPhil37
FilthyPhil37's picture

It's not costly when you're the only one with inventory and transport prices create arbitrage opprotunities. Monopolies make extraordinary profits. 

With everyone owning increasingly dematerialised securities (i.e. USD or BTC, if you like that), seems like having real shit (farmland, gold, inventory, water, food) is the obvious counterposition.  

Mon, 01/13/2014 - 22:29 | 4329327 overexposed
overexposed's picture

Is Amazon really as bad as the Tylers say it is?  Or are they using amazing non-GAAP-compliance to avoid the hell out of "earning" income, in the interests of avoiding every tax everywhere?

Mon, 01/13/2014 - 22:52 | 4329413 Catullus
Catullus's picture

You can't lie about cash flows. They suck.

Mon, 01/13/2014 - 22:55 | 4329421 overexposed
overexposed's picture

They can't divert cash elsewhere before it "hits" the books?

Tue, 01/14/2014 - 01:02 | 4329781 pitz
pitz's picture

Cash would actually have to exist in order for it to be diverted. 

Mon, 01/13/2014 - 22:38 | 4329355 WmMcK
WmMcK's picture

Or as we gamblers prefer saying -- "one time".

Mon, 01/13/2014 - 22:44 | 4329372 NOZZLE
NOZZLE's picture

Still cant get Amazon merch delivered to Belgrad Serbia. Let me know when they fix that last mile.

Mon, 01/13/2014 - 23:15 | 4329510 U4 eee aaa
U4 eee aaa's picture

I believe that would be the last 1,000 miles would it not?

Mon, 01/13/2014 - 22:46 | 4329378 Everybodys All ...
Everybodys All American's picture

Price to earnings ratio of over 1400 tells me it's a sell and to let someone else own it if and when it becomes solidly profitable.

Mon, 01/13/2014 - 22:48 | 4329395 Atomizer
Atomizer's picture

Still waiting on the (3) AR-15’s and 20,000 rounds of bullets to be delivered by your drone service. Step up to the plate or be gone as a supplier source.




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