9-24-2013 12-33-10 PM

Amazon’s Cost Advantage in a Cascade Chart

Ever wonder why Amazon can provide all sorts of products at very reasonable prices with free or very cheap shipping?  The cascade chart below shows one reason why.  Amazon’s cost structure is significantly lower than its multi-channel retail competitors.

McKinsey documented this is a presentation available on SlideShare.

I replicated the vertical cascade chart on slide 5 using Mekko Graphics.  Here’s my chart in SlideShare:
The cascade chart is used to show why Amazon’s cost structure is lower.  Each reason is documented (e.g., Factory gate pricing/direct supplier pick-up) and the cumulative impact of the 3 reasons are shown.  The half-page horizontal cascade gives you lots of room to provide a more detailed explanation on the right-hand side of the slide.
Here’s my chart in SlideShare: