Why Amazon Has No Profits and Why It Works
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Re: Why Amazon Has No Profits and Why It Works
#2Interesting note: Over 50% of the volume and driving force of Amazon's huge merchandise growth mentioned in the article is from small ($100k - $20m a year) mom and pop businesses around the country selling on Amazon. I wrote a blog post about it a while ago - http://www.kevinlordbarry.com/amazons-little-known-world-cha....
a16z touches on this, but it has wider reaching implications than just Amazon's revenue.
Re: Why Amazon Has No Profits and Why It Works
#3Excellent analysis.
> Amazon has perhaps 1% of the US retail market by value
> With Amazon, Bezos is deferring that profit-producing, investor-rewarding day almost indefinitely into the future. This prompts the suggestion that Amazon is the world’s biggest ‘lifestyle business’ – Bezos is running it for fun, not to deliver economic returns to shareholders, at least not any time soon.
Re: Why Amazon Has No Profits and Why It Works
#4It'll be interesting to see how their profitability trends as they adjust their prices. I've seen a trend over the past year or more of dramatically higher prices for things I've previously purchased from Amazon. I can do a 1-for-1 comparison on receipts, and see the huge bump. In some cases, those products are more expensive everywhere, but in most cases, I'm able to find those items at a price close-to or better than what I'd originally paid at Amazon if I shop around. It'll be interesting to see if they've trained consumer mindsets enough to retain them as customers if more shoppers notice a similar trend.
Re: Why Amazon Has No Profits and Why It Works
#5Interesting note: Over 50% of the volume and driving force of Amazon's huge merchandise growth mentioned in the article is from small ($100k - $20m a year) mom and pop businesses around the country selling on Amazon. I wrote a blog post about it a while ago - http://www.kevinlordbarry.com/amazons-little-known-world-cha... . a16z touches on this, but it has wider reaching implications than just Amazon's revenue.
$20m / year is a mom & pop business?
Re: Why Amazon Has No Profits and Why It Works
#6From: http://paulgraham.com/good.html:
In Patrick O'Brian's novels, his captains always try to get upwind of their opponents. If you're upwind, you decide when and if to engage the other ship...
In this case, Amazon is upwind of becoming a giant, profitable company. They could have taken profits earlier but it would have shrunk their overall pie.
Re: Why Amazon Has No Profits and Why It Works
#7From: http://paulgraham.com/good.html : In Patrick O'Brian's novels, his captains always try to get upwind of their opponents. If you're upwind, you decide when and if to engage the other ship... In this case, Amazon is upwind of becoming a giant, profitable company. They could have taken profits earlier but it would have shrunk their overall pie.
That would certainly explain the smell.
Re: Why Amazon Has No Profits and Why It Works
#8From: http://paulgraham.com/good.html : In Patrick O'Brian's novels, his captains always try to get upwind of their opponents. If you're upwind, you decide when and if to engage the other ship... In this case, Amazon is upwind of becoming a giant, profitable company. They could have taken profits earlier but it would have shrunk their overall pie.
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Re: Why Amazon Has No Profits and Why It Works
#9Interesting note: Over 50% of the volume and driving force of Amazon's huge merchandise growth mentioned in the article is from small ($100k - $20m a year) mom and pop businesses around the country selling on Amazon. I wrote a blog post about it a while ago - http://www.kevinlordbarry.com/amazons-little-known-world-cha... . a16z touches on this, but it has wider reaching implications than just Amazon's revenue.
$20m / year is a mom & pop business?
They are family owned and operated, yes! In almost all the cases I know of. I may be using the term wrong though.
Re: Why Amazon Has No Profits and Why It Works
#10Interesting note: Over 50% of the volume and driving force of Amazon's huge merchandise growth mentioned in the article is from small ($100k - $20m a year) mom and pop businesses around the country selling on Amazon. I wrote a blog post about it a while ago - http://www.kevinlordbarry.com/amazons-little-known-world-cha... . a16z touches on this, but it has wider reaching implications than just Amazon's revenue.
$20m / year is a mom & pop business?
Momma's got needs!