terracore:
"Frankly, I don't know how Amazon can afford to do it."
There is no doubt Amazon loses money on Prime to Hawaii. They seem to have recently raised the expedited fees but they are still absurdly low. And more and more stuff goes out parcel post-- a crap shoot whether it ends up on a boat. In my experience this happens less than 5% of the time though.
We got a Chinese 4500w back up Gennie about a year ago for half what they were going for on the island. I think expedited two day shipping (and it is ups or fedex though sometimes takes three days) was $45 or so? That payed for the membership fee a few times over.
That said I have been rethinking Amazon lately. Still getting an absurd range of stuff from them, but starting to wonder if I am falling for something untoward. I used to think that Amazon was "Walmarting" Walmart, which I viewed as progress. Now with the recent unpleasantness with publishers, and the realization that it isn't just staples that are available on Amazon, but nearly every niche of esoteric merchandise as well...well, they pretty much have the potential to put every goods seller out of business. Not services, but I can _always_ find a part online, and usually from Amazon, that beats anyone selling locally.
They have a tactic of letting the associate sellers test the waters and when something becomes popular, Amazon starts selling that item itself, often undercutting the seller who put it out there in the first place. According to some documentary I watched.
But back to idea of Amazon losing money--that's their business model so far. The financial guys still love them though, if the stock price and related stats are anything to go by.
I remember it being explained to me that the antitrust legislation came about cause the big oil company puts a gas station next to the little guy. Big guy lowers price below cost, small guy goes out of business, big guy then free to charge way more without any competition. Amazon seems to be doing this with every widget under the sun.
Is Prime worth it? If you use it it certainly is in terms of math dollars and cents. Is Costco membership worth it? For many people yes.
Growingly guilty,
Kirt
-Edited for auto correction typo