Amazon.com quietly launched a beta online grocery service a few weeks ago, with 10,000 items reportedly stocked and extensive gourmet, organic, low-carb, veg/vegan, and low-sugar offerings. "Household savings tips" columnist Stephanie Nelson wrote this analysis of pros and cons:

Amazon sells standard size boxes of Kellogg's cereals 17.6 oz. in a four pack, at an average price of $3.68 per box. That same variety and size of cereal is currently selling for $2.50 per box at my store this week. I'm not sure buying four boxes at that price offers enough convenience to offset the higher "bulk" price!

However, any strategic shopper knows how to figure out the rules of a store to take a strategic approach to getting lower prices. Although Amazon does not accept traditional grocery coupons, they do have regular promotions. For example, their site is currently promoting a special promotion for Kraft and Planters products. If you buy $39 or more of selected Kraft or Planters products, you get $15 taken off your order immediately as an instant rebate with a coupon code provided by the site.

In that case, I could buy a 12-count case of Kraft Deluxe Macaroni and Cheese dinner 14 oz. boxes for $28.80 and a 15-count case of Balance nutrition bars for $11.54. I would qualify for free shipping and there would be no sales tax. After the $15 instant rebate was deducted, I would be paying $1.51 per box for the Kraft dinner and 48 cents for each nutrition bar, which are pretty good prices for those items. Therefore, if you are a shopper who likes the convenience of online shopping, and has the storage space to keep an inventory of your purchases, you may be able to find some grocery bargains on typical items from Amazon.com. Even so, I wouldn't order those items because I could probably find them at lower prices with coupons at my stores when they were on sale, without having to buy them in bulk quantities.

Reader comment: Nathan Becker says,

Just a humorous note on that. A co-worker and I found it very amusing that they list out "Product Features" for the food...take for example Bananas: "Great in Cereal."

A few comments on Amazon's grocery offerings. First, their prices on organic products are pretty good--comparable to my local very large food coop, Puget Consumers Coop (PCC) on their regular days. (PCC offers two days a month with 5% off and a monthly 10%-one-shopping-trip coupon.) For people who live in places that don't stock organic products, this is probably a godsend because they can get competitive big city prices without driving 50 to 500 miles.

Second, Amazon includes groceries (the ones I checked) in Amazon Prime. My wife and I pay $79 a year total (not per person) to get two-day free shipping on most Amazon-stocked products. We order just enough from Amazon and have just a few last-minute needs that the $79 offsets the shipping we ordinarily paid them and then we order other things more cheaply because of it (versus paying shipping or waiting weeks at Amazon or other stores).

Third, our toddler goes through a fairly small number of diapers these days, but as he gets bigger, they get more expensive. At our local department store, we were paying over 50 cents a diaper for size 5's in the brand we prefer, and we have a heck of a time buying them in stock. Diapers seem to often be out of stock in particular sizes. So Amazon is offering Pampers Cruisers size 5's for about 30 cents each in a nice sized box before tax (we pay about 9% in WA state).

This resulted in the indignity of a poor UPS driver dropping off a box of 124 diapers sent second-day air at *no additional expense to us* this morning. Ha! What is this -- 1999?

posted by Xeni Jardin at 09:32:51 PM permalink | Other blogs' comments