Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

phx.corporate-ir.net

Post reply on HN
Print view View original

71–80 of 103 posts

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

#71

Post by vidarh »

leggomylibro wrote: post #52
ryandrake wrote: post #38

Earlier quoted context omitted.

Interesting--I've found myself switching the other way recently. I used to do a lot of purchasing on Amazon, but have moved more and more over to eBay. Prices tend to be better there, even on new items. No sales tax. Most sellers now offer free shipping, and you don't have to fill your cart to $50 or whatever it is to get it, and that free shipping isn't the "carried on the back of a mule" speed like Amazon's.

I can definitely see that; if you didn't have prime shipping, and more importantly imo, didn't live in a huge city where tons of items are deliverable to a plethora of nearby 'lockers' with 24-48-hour delivery. That probably has a lot to do with it, along with my experience that ebay is still pretty 'back of the mule' with shipping electronics internationally. Sometimes it's fast, but usually I forget I ordered somet…

In London a bunch of stuff with Prime is now available for same day delivery. Order before 10 or noon, or something, and get it in the evening.

It has a massive impact on buying decisions, and I probably overpay quite a lot for a lot of things.

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

#72

Post by kgwgk »

twoodfin wrote: post #62
adventured wrote: post #9

Earlier quoted context omitted.

They note in the release that Whole Foods accounted for $1.3 billion in sales. Excluding Whole Foods sales and favorable exchange rates, growth was 29%.

Haven’t followed the numbers closely, so pretty shocked that WF is only pulling in $1.3B/quarter. That means the average American household is spending $3-4/month there. Plenty of room to grow!

There is only one month of Whole Foods in Amazon's quarterly results.

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

#73

Post by javiramos »

vidarh wrote: post #70
jedberg wrote: post #17

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

Do you know Amazons order page lets you see how many orders you place each year? It is quite telling: 2007, 2008, 2009 were 2016: 270... It's all about establishing the habits.

Yes! It's all about the customer LTV.

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

#74

Post by sib »

mistermann wrote: post #61
whoisjuan wrote: post #55

Earlier quoted context omitted.

Compared to Apple that artificially created a consumption cycle of one 700 USD (Now 1000 USD) device per year?

Apple seems to lack the expertise to enter new markets and compete with entrenched players.

Motorola, Nokia, and Blackberry would beg to differ...

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

#75

Post by URSpider94 »

alexbeloi wrote: post #45
kgwgk wrote: post #26

Earlier quoted context omitted.

> prefers to expense everything off What does that mean?

There are different accounting strategies for when you recognize income/expenses. Say you land a long term contract to provide a service for 5 years and you need to buy extra hardware to fulfill this service, you can choose to expense the hardware immediately in the first year while you let the earnings come in over the next 5 years. In the first year you would be taking a huge loss (on paper), and in the following f…

Companies don’t actually have flexibility on this. There are Generally Acceptable Accounting Principles (GAAP) that govern how you must handle various kind of expense or profit.

In the case you provided, the revenue must be booked when it is payable under the contract - if it’s invoices in yearly installments, then it comes onto the books at that point. The capital expense for the equipment must be depreciated over its useful life, not when it is purchased.

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

#76

Post by runako »

twoodfin wrote: post #62
adventured wrote: post #9

Earlier quoted context omitted.

They note in the release that Whole Foods accounted for $1.3 billion in sales. Excluding Whole Foods sales and favorable exchange rates, growth was 29%.

Haven’t followed the numbers closely, so pretty shocked that WF is only pulling in $1.3B/quarter. That means the average American household is spending $3-4/month there. Plenty of room to grow!

WF has Apple stores also draw in people for repairs, etc. via their online presence (e.g. buy online, pick up in store). WF is 100% in-store.

It's astonishing WF is able to generate this level of revenue on so relatively few stores.

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

#77

Post by runako »

adventured wrote: post #53
0xFFC wrote: post #37

I am very curious about Wallmart policies against Amazon growth. With this pace amazon will eat Wallmart eventually. And Wallmart is biggest company on earth. What they are going to do?

Walmart's online business is booming and its offline retail business is still four times the size of Amazon's retail business. Walmart's online retail business is about 30% the size of Amazon's and growing twice as fast. Walmart apparently isn't going quietly. "The discount chain reported on Thursday that U.S. online sales rose a staggering 63% in the first fiscal quarter of the year, following last year’s overhaul o…

This comparison isn't all that favorable to Walmart:

- Walmart's ecommerce growth is from a base so small they don't give revenue numbers for the segment.

- Walmart's overall growth is 1.8%, compared with Amazon's 34% growth. This is the apples-to-apples comparison.

At their current growth rates, Amazon will be bigger than Walmart in ~6 years.

Most recent Walmart earnings: http://s2.q4cdn.com/056532643/files/doc_financials/2018/Q2/Q...

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

#79

Post by alehul »

kgwgk wrote: post #54
alehul wrote: post #42

Earlier quoted context omitted.

The sibling comment regarding avoiding a taxable income is correct. When a company makes a profit, it pays taxes on that income. The dividends are then either 1. distributed proportionally to the shareholders, or 2. reinvested into the company. The general idea is that reinvestment will generate more profit in the long term. In this case, the company reinvests the income into operations and growth during the next fis…

Good luck getting the IRS to accept that "good" accounting choice. In fact the reported statements can be different from those used to calculate the actual taxes paid. But even if the SEC is more flexible, there are still limits on what can be done. They are still reporting capex much higher than net income, if they expensed everything off they would be reporting billions in losses every quarter.

You're right that Amazon has higher capex than income, however this has been intentional; I haven't been in finance for a while, and apparently this is how they're doing it now, but the main point holds true of purposely avoiding income.

From an a16z partner:

> So, though we can’t be sure, it looks like the capex is not going up because Amazon’s existing business has become more expensive to run, but because Amazon is investing the growing pool of operation cash flow into the future. All of this brings us back to the beginning - Amazon’s business is delivering very rapid revenue growth but not accumulating any surplus cash or profits, because every penny of cash is being ploughed back into expanding the business further. But, this is not because any given business runs permanently at a loss - it is because the profits from what is already there are spent on making new businesses. In the past, that was mostly in operations, but in recent years the investment firehose has again been pointed at capex.

Source: http://ben-evans.com/benedictevans/2014/9/4/why-amazon-has-n...

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

#80

Post by alehul »

samfisher83 wrote: post #59
alehul wrote: 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…

You can't just expense stuff like that. For example you buy a warehouse you can't depreciate it all in one year. Retail is a competitive low margin business. Amazon has always had crazy P/E ratio. I could never really understand it. Maybe I could understand aws, but I can't understand the valuation of the core amazon business. Suppose amazon grows to the size of walmart. Walmart is only worth 260B, and they generate…

You're right that it's a more complicated process than it sounds, but it's been a common trick for ages. Apparently, however, in recent years, it has been focused on capex while still retaining the same fundamental idea.

In the words of an a16z partner[1]:

> So, though we can’t be sure, it looks like the capex is not going up because Amazon’s existing business has become more expensive to run, but because Amazon is investing the growing pool of operation cash flow into the future. All of this brings us back to the beginning - Amazon’s business is delivering very rapid revenue growth but not accumulating any surplus cash or profits, because every penny of cash is being ploughed back into expanding the business further. But, this is not because any given business runs permanently at a loss - it is because the profits from what is already there are spent on making new businesses. In the past, that was mostly in operations, but in recent years the investment firehose has again been pointed at capex.

[1] http://ben-evans.com/benedictevans/2014/9/4/why-amazon-has-n...

Post reply on HN