Amazon is not Webvan 2.0

Amazon selling groceries? Yes, we too thought the idea sounded crazy at first, but only for a second. There are at least three crucial differences between what Amazon is doing and what befell Webvan, one of the largest of all dot-com failures.

First, Amazon is dealing in non-perishable goods; Webvan set out to build a $1 billion warehousing operation of the future, an outrageously expensive investment to handle fresh meats and produce, as well as items with longer shelf lives. Second, Amazon is not trying to deliver groceries in real time, a critical component to Webvan's service that it thoroughly botched by stretching itself too thin, among other problems.

Third, Amazon has a decade of distribution experience under its belt, so it presumably knows how far it can expand its operations without overextending them. If anything, Amazon's food move seems positioned against Costco, Wal-Mart and, to a lesser degree, Target--hardly in danger of following the fateful path of Webvan, Kozmo and other dot-com delivery services.

Blog community response:

"What we have here is scale. And with the economies of scale, low price. Top that with easy Amazon shopping, free shipping, and secure payment systemsÂ…Well, I'd use it. You bet."
--Blogaholics

"Granted, I could probably get the same thing at Sam's Club or Costco, but those places suck. Amazon is much more friendly."
--Ramblewords

"Now I won't have to leave my house for any reason whatsoever. Except to buy milk. And beer. And the whole job thing."
--Garm Howling