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Amazon.com Announces Third Quarter Sales Up 34% to $43.7B

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Re: Amazon.com Announces Third Quarter Sales Up 34% to $43.7B

#21
post #15

Once again, AWS is the reason Amazon made any money at all. AWS earned $1.1B in profits for the quarter.. a 25% profit margin.

Correct me if I'm wrong, but isn't that just due to their accounting preferences? Amazon has had the capability of making profit for years, but prefers to expense everything off in an effort to grow rather than pay increased taxes. Their skyrocketing market cap hasn't been due to a change in the company's direction so much as investors gradually realizing this strategy and the raw growth potential of where Amazon has…

[deleted]

Re: Amazon.com Announces Third Quarter Sales Up 34% to $43.7B

#22

Wow. How is that even possible? Growing by a third in one year at that scale is completely mind boggling to me.

Anecdotally, I've started using Amazon FBA for things that I used to use eBay for.

Say I want a 2.2" ILI9341-driven TFT screen. That's not exactly something that you need everyday, so I could go to AliExpress/Taobao and get N for $3 ea in ~3 weeks, or eBay to get one for $4-5 in a lottery of anywhere from 3 days to 2 months. But now, I can get one from Amazon for $10 tomorrow.

It has prime shipping, which means you gotta figure they use the whole 'Fulfilled By Amazon' thing; I think that's like $3 a pop for small items. Heck, I was thinking of trying to make some money off of that kind of arbitrage, but it wouldn't be stable income since it's so dependent on a single 3rd-party company. Also, you'd literally be profiting off of China's sweatshop factories and lack of compunction around IP, which I feel sort of 'eh' about. At least using the things, you can argue there might be an end to justify the mildly shady means.

And it's just as likely to work as one from those other sources. If I wanted ethically-sourced reliable hardware I'd pay like $40 to get one with fast shipping from Adafruit. I really appreciate all that they do, but I also can't afford to ignore price for every purchasing decision that I make - and I am definitely not alone there, so there's probably still a lot of benefit to being "the everything store."

Re: Amazon.com Announces Third Quarter Sales Up 34% to $43.7B

#23
post #15

Once again, AWS is the reason Amazon made any money at all. AWS earned $1.1B in profits for the quarter.. a 25% profit margin.

Correct me if I'm wrong, but isn't that just due to their accounting preferences? Amazon has had the capability of making profit for years, but prefers to expense everything off in an effort to grow rather than pay increased taxes. Their skyrocketing market cap hasn't been due to a change in the company's direction so much as investors gradually realizing this strategy and the raw growth potential of where Amazon has…

perhaps, but AWS is so profitable even AMZN cannot reinvest all its proceeds.

Re: Amazon.com Announces Third Quarter Sales Up 34% to $43.7B

#25
post #17

That was me and my wife. I'm pretty sure our baby stuff accounts for most of that growth.

Gratz! lol My wife and I just added our own registry there...

Protip. Put expensive stuff you want for yourself on the registry. It's unlikely that anyone will buy it (but hey if they do great!) but after the due date they send you a coupon for 20% off if you buy everything left on your registry.

We got a bunch of lego sets for the older kid that way, and the discount counted!

Re: Amazon.com Announces Third Quarter Sales Up 34% to $43.7B

#26
post #15

Once again, AWS is the reason Amazon made any money at all. AWS earned $1.1B in profits for the quarter.. a 25% profit margin.

Correct me if I'm wrong, but isn't that just due to their accounting preferences? Amazon has had the capability of making profit for years, but prefers to expense everything off in an effort to grow rather than pay increased taxes. Their skyrocketing market cap hasn't been due to a change in the company's direction so much as investors gradually realizing this strategy and the raw growth potential of where Amazon has…

> prefers to expense everything off

What does that mean?

Re: Amazon.com Announces Third Quarter Sales Up 34% to $43.7B

#27
post #26
post #15

Earlier quoted context omitted.

Correct me if I'm wrong, but isn't that just due to their accounting preferences? Amazon has had the capability of making profit for years, but prefers to expense everything off in an effort to grow rather than pay increased taxes. Their skyrocketing market cap hasn't been due to a change in the company's direction so much as investors gradually realizing this strategy and the raw growth potential of where Amazon has…

> prefers to expense everything off What does that mean?

I think the parent means, they prefer to aggressively spend their cash flow on growth rather than produce a nice taxable income figure. It's an odd way to phrase it, one wouldn't use "expense everything off" in that way normally.

Re: Amazon.com Announces Third Quarter Sales Up 34% to $43.7B

#28

Wow. How is that even possible? Growing by a third in one year at that scale is completely mind boggling to me.

Aren't very high sales for a store expected? They don't manufacture (most) stuff - they buy it for X, sell it for X+Y%, so better economy = more consumer spending = higher sales for stores. The real key for Amazon is how good their profit margins are on these sales.

Re: Amazon.com Announces Third Quarter Sales Up 34% to $43.7B

#30
post #28

Wow. How is that even possible? Growing by a third in one year at that scale is completely mind boggling to me.

Aren't very high sales for a store expected? They don't manufacture (most) stuff - they buy it for X, sell it for X+Y%, so better economy = more consumer spending = higher sales for stores. The real key for Amazon is how good their profit margins are on these sales.

Is the economy so much better than last year that everyone is buying 34% more stuff than they did last year?
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