Quote:
Originally Posted by bizaro86
Amazon isnt a monopoly now, but delivering stuff is a business where there are big scale benefits. If you are the biggest, you can have a warehouse in every city versus a small competitor that only has one. Then your items arrive faster, and cost less to ship because they are being shipped shorter distances. Also, shipping more improves the route density, which makes it faster. Amazon already has its own (chartered)air freight, and will probably start express services. For the route density thing, selling more stuff is more efficient.
Imagine two companies each have a Calgary warehouse but one sells 10000 items per day and one sells 10. The big guy can dispatch a van with 50 items for Tuscany and 50 items for rocky Ridge. That driver spends little time between deliveries, and can do lots per day. The little company has to deliver one in Tuscany, one in Sunnyside, one in Strathcona, one in Falconridge, etc,and the transit times are way longer. In practice the small guys pay up for private delivery, while Amazon has its own independent contractor group that does it, almost certainly way cheaper.
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But the only real issue with Monopolies are if they use the power for predatory pricing. In your example if Amazon raises they prices to much, then the other persons product because cheaper.
Unless every store in the world was out of business, then I guess they could use predatory pricing