Feb 082016
 

Amazon-prime

One of the first things I did when we moved to the United States was to subscribe to Amazon Prime.  The early days especially were a non-stop flurry of boxes from Amazon, containing all the things we thought we needed as we transitioned from living in a relatively smaller high-rise condo, to a much larger single family home.

Almost exactly four years later, we cancelled our Prime subscription.  I’ll share the reasons why below, but it had an unexpected side effect – saving money.  I’m not just talking about the $99/year subscription fee either.

Why Cancel?

Given my affinity with Chromecast, the straw that broke the camels back is going to be fairly obvious – but in truth, a number of things had already happened that gave me increasing concern about the nature of being a Prime member.  These were roughly as follows:

  • Service Bundling.  When Amazon raised the price of Prime from $79/year to $99/year, they justified it by the “extra services” they had recently added – by which they mean Prime Instant Video, their competitor to Netflix (and later, Prime Music).  This was simply a service I didn’t want, and never used.  The incremental content it provided over Netflix at the time was minimal (and Netflix had the kids programming and a kid-friendly UI that we depended on), and the interface for actually finding anything was poor.  To me, there was zero reason to bundle two completely unrelated services – free shipping on physical purchases, and online streaming video/music.  Ultimately, I rationalized that the convenience of fast, free shipping alone justified the $99/year, and stuck with the service.
  • Hachette Books Dispute.  I don’t even buy books, generally speaking, but the tactics of holding physical books hostage in negotiations over ebook pricing seemed a little questionable.  I don’t really know enough about the issues on either side to comment on who was really right or wrong in this dispute, but it did make one thing clear – Amazon knew that I, like others, was a captive audience (as opposed to a group that would simply buy elsewhere if Amazon didn’t carry something), and was using this as a negotiating tool.
  • Movie Studio Dispute.  One category of items I’ve consistently purchased via Amazon is movies and videogames, as they’ve got a great policy of having it to you on release day, at the lowest price the item had any time between when you ordered, and when it shipped. Despite the convenience of streaming, when I really care about watching the film in the highest quality I can, I still buy the Blu-ray disc. Then something very odd happened; the release date of something I’d been waiting for was coming up, yet the item wasn’t even visible on Amazon for pre-order. While there wasn’t a lot of press around this, what did exist pointed to an ongoing negotiation between Amazon and the studio for this film (I don’t remember which it was).  I finally did pre-order it, with the usual promise of release day delivery.  But disappointingly, release day came and went, and that weekend, I had to skip watching the film despite it being available at Costco for the same price, because it was already in transit from Amazon.  It felt like a worse outcome for me, so that Amazon could strike a better bargain.
  • Banning Chromecast (and Apple TV).  This one hit far closer to home, but also – in my likely biased opinion – crosses way many more lines than the above.  If you didn’t see this, Amazon decided to remove both Chromecast and Apple TV, on the basis that it was “confusing” to their customers that these products did not work with Prime Instant Video.  As some articles pointed out, this argument didn’t make a lot of sense; Chromecast (and now also Apple TV) allow app developers to support the device if they so choose.  More importantly, this was a very clear sign that Amazon didn’t actually intend to be “the everything store“, and that it would favor its own products over others.  Chromecast might have been the first publicly visible example of this, but what about the Amazon Basics products I’d bought – were competitors against Amazon in other areas being treated similarly?

The net of all this is that Amazon lost the trust I once placed in it to act in its customers’ interests first and foremost, and to be a great source (even if not the absolute cheapest on everything) of anything I wanted to buy online.  Moreover, I didn’t want to buy a “buys-everything-on-Amazon” Prime subscriber that allows them to make moves like the above that are only in their own interests.

Saving Money

In cancelling Prime, I expected to save $99/year, at the cost of waiting a few extra days for my purchases, and not being able to impulsively order something that cost $5.  Entirely unexpectedly, I’ve saved far more than that.  You might be expecting a noble tale about how this led to an epiphany about the plague of excess consumerism, but unfortunately while we do definitely buy way too much stuff as a society, I don’t have such a tale to tell.  My experiences with not defaulting to Amazon are actually quite different:

  • Some things are just cheaper elsewhere.  Amazon offers good prices and never tries to float a price that’s a ripoff compared to other sources, but it’s not always the best.  Once my shopping tended to start with search instead of on amazon.com, I found that I’d occasionally get the best deal on what I wanted with B&H Photo, Monoprice, Newegg, or some other source.  It’s a little more hassle to have accounts with various sellers, but not being lazy had some benefit.
  • Brick & mortar makes sense for some items.  In the early days of e-commerce, retail stores generally still had margins that ensured that buying online was virtually always a better deal, unless you picked up a loss leader on Black Friday.  But that’s changed, and retailers now understand they can’t sell non-impulse items at higher-than-online prices.  In fact, for some items, the manufacturer dictates the same price across both online and offline sellers.  This was the case with an LG OLED TV that I bought to replace my monitor; Amazon, Best Buy, and other sources all had identical prices (technically, Amazon had it for $2 less).  Purchasing it in an actual Best Buy came with three benefits.  First, I had it home and setup the day I hit a particular personal goal I’d gated this decision on.  Second, we could choose when to go to the store, rather than having to set up a 4-hour delivery window (or greater), probably on a weekday, that would have been inconvenient.  But finally – and per the “save money” comment – a promotion to sign up for a Best Buy Visa led to a 10% discount, which in the case of this TV made a $300 difference!
  • Minimum advertised price is not minimum price.  In some categories, retailers seem to be held to a requirement that the prices they can post/offer online have a certain minimum.  I’d previously assumed that this was just “the price”, and if it seemed reasonable enough I’d buy it from Amazon.  But as I looked at replacing two key components of our home theater that have provided close to a decade of service but are getting somewhat dated, I discovered that A/V dealers you still have to call over the phone can still do better than “minimum advertised price”, even when they are authorized dealers.  My replacement projector was $200 less from a dealer than from Amazon; the updated A/V processor I went with was $250 less through that dealer.  The right dealer will also be very knowledgeable; I actually wound up making a different choice on the projector after speaking with the dealer and doing some additional research.

It’s hard to quantify the small items, but the three big-ticket items (which I hope will last a decade, like their predecessors!) added up to $850 in savings over my previous “Buy with 1-click” default behavior.  And so far, we’ve only had to pay $5 once for expedited shipping.  Add in the $99 annual fee, and that’s a net improvement of $944 not counting smaller items!

Amazon is still a great source of many things, and whenever I’ve had to reach out to their customer service, they’ve been great.  When I am buying something online, I don’t avoid shopping there, and I’m glad that by going to smile.amazon.com, you can elect to support a charity with a small portion of your purchases.  Cancelling Prime just means I don’t default to shopping there – and so far, that’s saved me a ton.

 Posted by at 12:02 am

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