Monday, January 23rd, 2017

How Amazon Got $100 Million Worth of Free Marketing

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Amazon's "Prime Air" package drone, which it convinced Charlie Rose and 60 Minutes would soon be delivering packages right to your front door.

Amazon’s “Prime Air” package drone, which it convinced Charlie Rose and 60 Minutes would soon be delivering packages right to your front door.

Did you catch the Cyber Monday silliness that Amazon wrought?

Apparently, the online retail giant had even the venerable Charlie Rose convinced that it was deploying an army of package-carrying drones to make same-day delivery available to the masses.

Well, whether or not the stunt was designed to captivate 60 Minutes audiences and keep the buzz churning throughout the week (looks like I’m buying right in!), there was a great snippet in this Wired write up that pretty much encapsulates the niche that same-day couriers occupy and how we distinguish ourselves from the likes of UPS and FedEx:

The point here is that same-day delivery is expensive because it requires a fundamentally different logistics model. Amazon and every other big retailer relies mainly on a “hub-and-spoke” model of distribution. A large central warehouse serves as a hub from which orders travel in different directions, or “spokes.” A typical Amazon order will go from a distribution center — the Amazon hub — to a UPS or FedEx sorting facility (another hub), from which they are then divvied up among trucks to make local deliveries.

Same-day delivery, on the other hand, requires a point-to-point model. In the hub-and-spoke model, the additional steps of connecting with a same-day shipper take too much time to actually make a delivery on the same day. Instead, merchandise must travel straight from its origin to the customer, which at any kind of distance becomes deeply inefficient.

On a large scale, this inefficiency is difficult to remedy, but for individual couriers there are tremendous efficiencies to be found.

And by creating this efficiency, we create value for our clients.

I just hope we can all be as creative (and effective) as Amazon in our marketing efforts!

  • Robert Tew

    Sam, I am employed with a distributor of electrical devices and machine automation. This week I needed to have a part delivered that day to a customer over 200 miles away whose operation was down due to a faulty part. We frequently use couriers for this type of urgent deliveries, but the problem is finding a quality, dependable source for those deliveries. For example, the aforementioned delivery was accomplished using a courier service that was selected out of 6 sources. One source had a disconnected phone, two did not answer the phone call, and two more had voicemails. One of the voicemails directed me to another phone number for “immediate attention”, where I had to leave a voicemail. The last source answered the phone, and stated the driver would be at the pick-up site within 30 minutes. The driver arrived over an hour later, and was dressed as if they were going to the mall, not as the representative of a professional company performing an important business service. The last point is that the delivery took over 4-1/2 hours to complete a run of 210 miles with the majority of the route being interstate and 4-lane divided highways.
    OK, this is somewhat involved, but the point is that a courier is a business person, and the image of being capable of performing this service is as important as the task itself. So when a courier has pride in their appearance, and presents a professional picture to the client, it makes the delivery fee more palatable to both the client and the ultimate receiver of the package being delivered.
    Even if you are a small operation, you can benefit from big company tactics by being an image for reliability and dependability. Hoorah for Amazon!

    • Thank you for posting this, Robert. This is exactly the type of situation that creates an opportunity for a new business owner to come in and outperform the competition.

      It also goes to show that understanding your competition extends far beyond knowing how many “courier businesses” show up in the search results in your area. In your search, you found 6, but 5 out of those 6 didn’t even have a shot.

      We preach this all the time: if you’re a “one man band,” professionalism is key. Reliability, professionalism, polish — when you are the representative of another company, especially as a subcontractor, this is one of the key components to the value you provide.

      It’s also a good case for the type of one-off situation that can be profitable for someone who can do the job well. The price tag of having an operation shut down must be astronomical, so paying even a high price to have someone drop everything and make a 400+ mile delivery becomes cost effective.

      Do you mind me asking what part of the country you are in? If there’s someone near you thinking of making a go for it, maybe this will provide the motivation they need!

      Best of luck and thanks again for sharing your experience.