Yes. Although Amazon.com is an ecommerce marketplace it can also be utilized as a search engine. In many cases buyers use Amazon to compare prices and find products they are interested in purchasing. Sellers often use Amazon for market research, when deciding new products to sell online. Additionally, with the introduction of Alexa, Amazon.com data is often used to answer voice search queries.
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Seim: We were really interested in the cost side more so than consumer benefits. So, we tried to project out what Amazon’s shipping costs might have been had they not chosen to expand their shipping center network but instead stuck with where they had their initial fulfillment centers. We did a back-of-the-envelope calculation of what shipping costs would have been from serving all of the new demand from the original set of locations compared to where they are today. Then we used that to think about how much might their margin have increased purely because of the distribution center growth and the cost savings that come with that.
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