Amazon Cuts Prices at Whole Foods
Amazon cut the prices at whole foods today by up to 43% on the first day. Whole Foods is known for having high prices garnering such nicknames as “Whole Paycheck.” This first day tactic by Amazon is another genius move by the retail giant. Slashing prices will drive traffic into Whole Foods. People who always saw Whole Foods as over priced will be stepping in to check out the stores.
The Next Steps
In This Post I discussed a possible reason for Amazon purchasing Whole Foods in the first placed. It seemed like an odd move to make considering the fact that Amazon is putting a number of brick and mortar retailers out of business with its efficient supply chain. Lowering the prices on the first day will no doubt hurt all competitors in the space. We currently see a retail ETF down nearly 1% already today. XRT is down .75% as I am writing this article.
Amazon can incorporate Whole Foods into its business model a number of ways. Let’s say that Amazon turns Whole Foods into pick up stations for Amazon Prime orders. This will allow for people to save on shipping costs, but it will also drive traffic into the Amazon Whole Food Stores. Along with the low costs on the products available, people will have more of an incentive to go into the store.
Once Amazon starts delivering groceries for Whole Foods, they can then take advantage of the EBT pilot program they are enrolled in. This program allows people to use their EBT or welfare cards online to purchase goods. This is probably where Amazon will raise the prices along with adding a delivery fee.
How does a small business compete with Amazon in this market? Lately I have been experiencing problems with Amazon. First the UFC app wouldn’t work for the Mayweather/Mcgregor fight. Second, on Friday a neighbor of mine delivered a box to me. The box was left on his front lawn by an Amazon driver. Interestingly enough the tracking number on the package said it was on its way back to a facility in Arizona. I was issued a refund for that package. Somehow Amazon messed that up.
I have posted a few areas where Amazon messed up my deliveries over the past few weeks. It is unlikely that I am the only one experiencing these errors lately. Amazon has generally been good about getting things delivered on time. As the volume grows the mistakes are also growing. This is an issue.
As a small business, you need to make sure that you are doing what you say. Deliver your products on time, be engaged with your customers. Follow up after the package was delivered. Go above and beyond for your customer because you never know who is going to be upset with Amazon. If you are selling on Amazon, follow up with those orders as well. Amazon may have messed up your delivery, and if that is the case then you will need to follow up with them to make your customer happy.
Amazon is not making a profit. At some point, the investors will want the company to make changes that cut costs or raise prices. When this happens, Amazon will have to give up a competitive advantage somewhere in its supply chain.
If you don’t have a store set up online yet. I recommend you look at Big Commerce to get started. They have a free trial, and you can link directly with Ebay. Click this link:
Because we are a small business blog still. We want to help you grow your business and make more money. As a result, we are looking at ways you can compete with Amazon. But, it is not only Amazon you need to compete with. There are other retailers out there, and you need to know how to compete with them as well. Furthermore we want you to grow your business.
Another function of this blog is to keep you aware of what Amazon is doing. Maybe you are on Amazon as a seller, but this doesn’t mean you shouldn’t be aware of how they are moving in the market. Furthermore, if you are a seller, then it is actually more important for you to stay up to date on Amazon.
Finally, we want to thank you for reading. We know you are almost where you want to be, and hopefully this blog helps you get you where you want to go. We are small business blog, and we want you to succeed. Share and subscribe!