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Amazon Is Jumping Into the Services World – Will It Work?

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Amazon is not stupid. They see the cash flow being generated by service companies like Geek Squad for their parent company, Best Buy. 

Amazon Is Jumping Into the Services World – Will It Work?

Amazon is not stupid. They see the cash flow being generated by service companies like Geek Squad for their parent company, Best Buy. 

“Over the past decade, Geek Squad has been a cash cow for Best Buy. […A]nalysts estimate Geek Squad generates a gross profit margin of 40 to 50 percent based on a minimum annual revenue of $2 billion, or about 4 percent of Best Buy’s total revenue of $50 billion.” (Techcrunch)

The question is will it work?

At this point, Amazon is not planning on creating a rate card or standard service pricing, so many decisions will be price which often doesn’t benefit the customer. Also, if there are lots of vendors per service category, so customers may abandon due to offer exhaustion. 

Our take on this: we think that a standard pricing model with a few select vendors would create the best customer experience and ROI for Amazon. We can’t wait for the data in the meantime. 

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