Amazon Patents Bad Service For Bad Customers

mikesd81 writes "Techdirt reports that Amazon has been awarded a patent for Generating Current Order Fulfillment Plans Based on Expected Future Orders. Essentially, if Amazon deems that you won't be a long time customer or ordering again soon, your order will take longer to be expedited."

Re:Purpose of patents..

[Protonk]

Your idea of 'good' or 'bad' ideas doesn't really factor in to what patents are or aren't supposed to protect. They protect novel ideas.

Nothing to with customers

[acvh]

As it seems that no one has read the damned patent - here is the concise version:

This has nothing to do with Amazon deciding that Joe Smith projects to be a lousy customer so lets not care about the order he just placed.

This is all about trying to determine the most profitable way to fill orders from multiple distribution centers, using projected future orders for those centers.

Of course, it's much cooler to be a sheep and follow the herd, isn't it?

Oversimplified, I think.

[baboo_jackal]

I think you (and most other posters) missed the point by oversimplifying it. I don't think this is a system that gives more frequent customers better treatment, and less-frequent ones worse. Here's why I think that - take a look at this:

Sample table from patent [flickr.com]

The system allows them to prioritize delivery methods according to potential goodwill cost. Here's a simple example: Say Amazon has only two customers - you and me. We both frequently buy expensive stuff. I don't really care when it arrives, just so it arrives. You, on the other hand, complain if things arrive late. The system would allow Amazon to know that they should prioritize your shipments over mine.

Now, extend this to many, many customers with widely varying buying habits, and varying attitudes to early, on-time, and late deliveries. It's kind of cool, if you think about it. Say I buy stuff from Amazon very infrequently, but when I do, it's always *really* expensive, and I *hate* it when stuff arrives late. Then there's this other guy who buys less expensive stuff, but buys all the time, and *he* LOOOOOVES it when stuff shows up early, but doesn't much care if it's late. Then there's this chick who buys, on average, one book every month and never says anything positive if it's early, never complains if it's up to a week late, but rants and raves and swears to never buy again from Amazon when something's over a week late...

The system allows Amazon to prioritize shipment plans among their millions of customers, all with varying buying styles and delivery-time cares. They do it because it allows them to maximize their profits, which, it seems, most people on here don't like. But look at the effects - you get, not only *what* you want, but you get it within a timeframe that's acceptable to you!

That having been said, in a very simple sense, you and most others are right that it rewards "frequent customers," but in a limited way. The only way this system gives frequent customers preferential treatment is because frequent purchasers provide more information about buying habits and delivery-time cares to enable Amazon to prioritize. A more accurate statement would be: "This system will give preferential treatment to customers who spend the most money and complain the most if stuff is late and like it when stuff is early." Which makes sense.

Another thing to consider is that Amazon has a limited pool of shipping resources. This system is a method to accurately distribute those resources, but not just according to pure cost - it actually takes into consideration "goodwill cost!" For crying out loud, it takes into account your feelings!

This is an application of free-market principles to an internal resource distribution problem, and it's actually a clever solution. They increase their profit, and you get what you want. I don't see the down side to this. (Other than the patent.)

Re:In other words ...

[Anonymous Coward]

Now I'm not going to read the article, but ... They're predicting future repeat business and then holding shipments for people who their system thinks won't shop there again regularly. So it is in fact punishing customers (aka bad service)

That is ridiculous. I have read the article and everything it links too (not much) and I see no text to support your idea or the trollish summary/title. They hold the shipments in order to get "better customer's" packages out the door faster. They have to ship everyone's package sometime, they are not going to sit idle on their hands to intentionally punish poor customers - that would make no business sense. I usually do the free shipping option, and I've noticed that my package is often shipped ahead of the (delayed) predicted ship date. I see no reason to believe that they won't ship your package as soon as they can, after they've already pushed the priority customer's packages out the door.

Re:I thought they were already doing this...

[synx]

This is not true - you're describing postal injection, which does not involve sending packages "in the right direction". It's highly calculated and precise - based on zip3 (the first 3 of your zip). Generally most postal injection lanes pick up 3 days/week. If there is no postal injection available and your super-saver shipment is due in 3 days, it'll go UPS ground. Not to mention that PI is expensive to run if there isn't high utilization, hence it isn't run all year long.

There is much more controls on how super-savers are treated. The overriding rule though is to ship by promised-ship date to ensure delivery by the promised delivery date. Check those dates on your order, they are extremely important and used to prioritize everything. Basically the thinking is "we promised to deliver on X so we will do so".

I should know - I designed and coded the controls for these systems.

Re:Buying from them at Christmas could be iffy the

[synx]

I used to work in supply chain at Amazon, thank god I don't anymore.

But simply put, if you have an 'arrives on' date of the 24th or sooner then you will get it on the 24th. If they have to upgrade you from super saver to next day air, then so be it.

Of course due to reasons beyond Amazon's control (eg: vendors didn't deliver) some people don't get what they ordered. In which case we email them on the 23rd after we're certain it's not going (or sooner if possible) and let you know that you won't get it.

I will order my gifts from Amazon this year as much as possible. Beats the hell out of going to a mall. And I have absolute confidence in the supply chain. Plus I have Amazon Prime to second day shipping is free for me.

Re:Waitaminute

[Smidge204]

It was a joke. Amazon didn't patent "treating customers like crap" no matter what the summary or linked article say.

What Amazon patented is a predictive model used to optimize inventory handling and shipping.

In other words, they start to figure out the best way to ship you the crap on your "recommended items" list before you even order it. That way, should you actually buy any of that, they will already have figured out the best warehouse to ship it from and the best carrier to use. They also try to predict when you might buy those things, so they can figure in anticipated shipping costs, inventory levels and operating capacity of their various distribution centers. They want to avoid things like inventory shortages and overloading their packaging lines.

The patent says NOTHING about penalizing "bad" customers, or even giving "good" customers a specific advantage. The name of the game is to anticipate orders and optimize the order fulfillment process ahead of time. The only reason a "good" customer would benefit more is because there is more history to build the predictive model with, and thus it will be more accurate.
=Smidge=