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Amazon.com Reporting This Holiday Season Their "Best Ever"
In a refreshing break from all the doom and gloom, Amazon.com is calling this holiday season their best ever. Reporting a 44 percent rise in the number of items sold, they are refusing to provide actual dollar amounts, so it is still a very subjective measurement. "Amazon customers ordered more than 6.3 million items on Dec. 15, compared with roughly 5.4 million on its peak day last year, the company said. It shipped more than 5.6 million products on its best day, a 44 percent rise over 2007, when it shipped about 3.9 million on its busiest day. The company did not provide dollar figures and wouldn't say whether the average value of orders had changed, and the jumps it reported Friday are in line with increases Amazon has seen since it started releasing the figures in 2002."
People are going to look for better deals, and when some item can be found for 20 to 50% less online, often with free shipping, of course they are going to turn to the big internet sites.
See Slate's Amazon.con: How the online retail giant hoodwinks the press for details on why this story is idiotic:
Some, but not all, of these accounts went on to concede that Amazon would not provide revenue data for the entire shopping season, or even for its "peak day." Nor would Amazon confirm or deny that one or both of these revenue figures exceeded those for 2007. Without this information, we can't possibly know whether Amazon had a good year in comparison either to other retailers or to its own sales during the previous Christmas shopping season.
The same reasoning or lack thereof applies to the Kindle (which I don't like for its DRM and other problems), since Amazon won't release sales numbers for it.
So, did Amazon have their best ever holiday season? Maybe: but we're unlikely to know enough about the metrics used to make this claim to know.
Just because they sold more items doesn't mean they made as much of a profit as they would have during a non-holiday season.
People are buying more tangible items at cut rate prices instead of handing out gift cards - this helps retailers anywhere move more items.
The kick-to-the-balls is when the profit enters the equation - if the profit margin on those 6.3 million items was razor thin (or there were more "loss leaders" than usual) then this report is crap.
Pointless to respond to an AC, but Amazon has been continuously profitable since 2003.
http://en.wikipedia.org/wiki/Begs_the_question Just sayin'
I judt got a nre Kinesis keybiartf so please excusr ant egregiou typos.
Just another attack by the liberal elite. Why do you hate America?
I judt got a nre Kinesis keybiartf so please excusr ant egregiou typos.
The big-box retailers taking over all the specialty shops across the US are actually reducing the diversity of goods available locally (the ACE hardware actually has more depth than Lowes in many areas for example). So aside from the obvious lower prices and "dropped at your door" convenience, there just aren't any local options for lots of us living in generica if "best Buy" doesn't carry your desired trinket.
Sheldon
The media has been rooting for a recession since Clinton left office.
NPR especially, going so far as to tell me how this is basically the great depression. Yet, everywhere I go I see people driving SUV's to the various outlets to buy crap they don't need.
Amazon represents the second-best reason for a free market economy: efficiency. They can bring you goods and services cheaper than their competitors, you win, they win, competitor looses.
Oh...and I drink YOUR milkshake.
THL phish sticks
Another order that I did place from a manufacturer website did come OK and on time, but it was a nail-biting experience. Although the website offered second-day delivery as an option (actually it was one of those outsourced shopping cart sites), the confirmation e-mail that came directly from the manufacturer said "5-7 business days". I replied to that e-mail asking what was up, but never got a response.
I worry about the day when Amazon gets too big and starts becoming evil (e.g. censorship), but for now, I am a happy and loyal Amazon customer.
They say that just to be on the safe side. Everything I order from them arrives before the *beginning* of the predicted arrival period. So if they say "estimated delivery in 2 or 3 weeks", it arrives in one. Or earlier. I've had orders arrive in a mere 2 working days (ordered sunday, shipped monday and was here wednesday morning).
I usually order from their UK department from another country in europe, but I've ordered from the US in the past. The only time an order ever arrived past their estimated delivery period (it was coming from the US) they refunded me. If they're going to do that, it makes sense from a business standpoint to have broad estimated delivery periods.
Is anyone else totally disillusioned with consumers for things like this? The worldwide economy is crumbling because people didn't know how much was too much. And now, after people know that, they *keep* *buying*. Big screen TVs, _thousands_ in gift cards, other expensive purchases, when they should be starting to save up, conserve. When will people learn?
I think the key isn't "don't buy anything" but the key is "live within your means." The unfortunate thing is that, too many people don't know what their means are. They have no idea about their budget, or what they can afford, or how much they actually spend on X Y or Z each month. (Seriously, ask someone who doesn't budget how much they think they spend on eating out each month.)
Once a person sits down and figures out a good solid budget, money, surprisingly does not present as many issues because, instead of spending it willy-nilly, it's being managed.
And, as you suggested, saving (and investing, if your finances allow for it), is a definite must. Once you are saving and paying your bills then you can go and make that fun purchase.
Of course, that's boring. So what the heck am I saying? SPEND! SPEND MY PRETTIES!
Not sure to which component you're refering. We buy extensively from Amazon.com (can't vouch for .ca, etc.) and the only time it takes weeks is when using one of the business storefronts you mention. We are Amazon Prime members and so two-day shipping is free (or somesuch. Whatever it gives us seems to be worth the annual fee.) Stuff from Amazon itself arrives in two business days (sometimes less, depending on when the order is placed) unless they specifically say it will take longer, in which case, if you're ordering multiple items, in which case at checkout they tell you that you have option to ship as things become available.
Bark less. Wag more.
Yes and No.
Damn easy, great selection, good delivery options, cheap, no crowds... brilliant.
However I'm not sure I like the new trend of having lots of items listed which they don't sell, and farming the actual selling off to smaller companies I've never heard of. And it's easy to miss the small print saying it's supplied by someone else and effectively a marketplace purchase.
Not that I have anything against the marketplace, but blurring the boundaries too much annoys me. This is especially annoying when it comes to things like SD/MemStick cards, as there has been a lot of trouble with fakes lately and I want to buy from a supplier I trust - Amazon.
All that said, it's no wonder some of the shitty high-street chains are going bankrupt. The days when you can overcharge for tat because you're the only game in town are over.
I love Amazon's sell-your-own-stuff service as much as I do the site itself. I finally decided to get rid of the college books I'm never going to touch again, and Amazon makes the entire process insanely simple. In the past week I've made a few hundred bucks and it took almost no effort.
Also, the Amazon music store is fantastic, there's no way I'm going back to iTunes. Real MP3s, 256Kbps, and they sell long songs individually instead of making you download the whole album.
"usage does" is still way better style than "it's use".
Nerd rage is the funniest rage.
Amazon's fulfilment business is up, but that doesn't mean Amazon itself is selling more. More and more, Amazon is doing order processing for others. The fact that they're focusing on number of items shipped rather than revenue probably means revenue didn't go up.
Let me help you there, chucky:
2007: 476 million
2006: 190 million
2005: 359 million
2004: 588 million
2003: 35 million
2002: -149 million
Really, is this shocking information? That Amazon is profitable?
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
If 4% growth in a mature company isn't good enough, then you need to recalibrate your expectations. The big gains in growth and stock price are just after a start-up and IPO. No business can grow at high rates forever, eventually the market for their product/service is saturated.
Language may change over time, but it seems these days that the new meaning is already represented by an existing expression and that the old meaning doesn't have a new or alternate expression. It's this loss of expression that drives me to correct people's writing and speaking.
The "new meaning" of "Begging the question" is already available as "Raising the question".
When you use words intelligently you'll find that your point is often much more clearly understood. Changing language in the means mentioned primarily distracts and confuses the intention of the speaker.
-- i am jack's amusing sig file
Re-read your own post. Something about glass houses comes to mind :)
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
A 44% increase in items sold is nice, if the kind of items are similar to those sold last year. I wonder, however, what part of the raise comes from individual mp3 songs sold through their (very good) online music store. They don't say, so it makes me wonder what the motivation for their silence is. Hmmm...
what? Walmart operates on a 3.4-3.6% net profit margin
are you saying walmart is not doing well?
http://www.hoovers.com/wal-mart/--ID__11600,period__A--/free-co-fin-income.xhtml
10-15% is considered good net profit.
Depends on the industry. Walmart in '07 made 12.7 billion on 378.8 billion of revenue. That's almost exactly the same margin.
Amazon is very up-front with investors that they use cash-flow per share as their main metric rather than earnings per share.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
Over here in Germany shippings quite often arrives as soon as the next day. So in terms of shipping I couldn't be happier. However Amazon does still have lots of fault. For one there is their search engine, which totally sucks, spell a single character wrong and you won't find anything (i.e. Spiderman vs Spider-man). Their product catalog is also full of stuff that is either no longer available or only through third party and there is no easy way to filter that out or to see shipping cost for those third parties in the search list. Their user interface for third party stuff is also terrible, since it is in a complete different corner of the webpage then then normal orderings and requires a seperate login, which is pretty confusing and feels like a quick hack. And last not least there is the trouble that they don't properly group items, you have a DVD and want to see the page of the sequel? Can't do that, there is no button for that. Its even worse for comic books and other stuff, finding all the books that belong to a series is quite annoying and often requires a visit to Wikipedia to find out what is out there. And finally there is their pricing scheme, which feels very arbitrary at times, since for some products the price varies greatly over the course of a few days, so it becomes quite a guessing game to buy a thing at the right time.
But even with all those faults, Amazon is still quite a bit better then all the competition I tried so far.
Damn easy, great selection, good delivery options, cheap, no crowds... brilliant.
You neglected one extraordinary feature that no one else has mentioned in any of these comments-- no sales tax. When it comes to high-dollar electronic purchases, I always go to Amazon or Newegg. Brick and mortars can not compete when they have to pile on a sales tax. For instance, I just bought a Nikon D90 camera with a couple of lenses. Sales tax in Austin, TX. boosted the price more than a hundred dollars over what Amazon was charging.
As the economy continues to crumble, more people will probably recognize this cost-saving opportunity and Amazon will be able to brag amount recession-resistant sales figures. Not that this article indicates they have actually made more money than in previous years.
Seth
$5 / month hosted VPS on linux = awesome!
10-15% is an average gross margin for non-boutique retail. After overhead, making any money is good, and 3% isn't terrible when your sales number begins with a b.
Back when there were smaller stores, the margin was typically 40%. But those days are over, and why I chuckle every time I hear someone complain about the service at a Best Buy or whatever. America traded in knowledgeable electronics dealers for cheap, plastic, slave-labor constructed garbage that are a tenth of the price and last about as long. That is, if you don't break the connectors that are glued to the pcb instead of screwed to plates, as they used to be. Now those same stores employing kids are charging three hundred dollars to fix the crappy electronics they sold them in the first place.
Ah well. There is no free lunch. But there are a lot of people who aren't smart with their money. What were we talking about again?
With that sort of attitude I would recommend shopping elsewhere until they treat their staff properly.
4% isn't good enough.
When T-bills, municipal bonds, and FDIC insured CDs outperform your business, it's time to find a different strategy.
4% growth is not the same as return on investment. If those things you mentioned have a higher return on investment than your stock, you are right, But where would I find the GROWTH rate for CDs? How many FDIC insured CDs were sold last year? How many were sold this year? Where do you get the GROWTH rate for FDIC insured CDs?
The truth is that all men having power ought to be mistrusted. James Madison
and when I mail items overseas or receive them from overseas, I never mark them as "gift" if they were actually purchases
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
every time a company reports weak growth or a drop in revenue they always say something like this to make it seem nice.
"Every Time" - really? Let's not get too far ahead of ourselves with the absolutes shall we? Amazon's 2008 results will be published in January 2009 - so we have until then to determine your predictive accuracy. Amazon issues a post-holiday press release - has done for years. It's reported revenue increases every year in that press release that have been verified in more detail in it's annual report. It's seeming that your "every time" comment may be a little off the mark...
Rich people are eccentric. Poor people are strange. Me, I'd be happy with odd.
There are a few things that can make a huge difference...
First, stores, of any type, need a good location. Even when they are large chains, and can purchase the land and building outright, the property taxes are still much higher than Amazon's distribution centers. In addition, they need to build, heat and maintain a much larger number of stores/warehouses than Amazon. You can't build a single Home Depot to service a 5 state area - but Amazon can build a single warehouse, in the middle of nowhere, to service that area.
Second, a reduced number of employees. In a regular store you have people who have to worry about stocking and maintaining their areas; working the cash registers; and shifting products around to make the shelves "look good". At Amazon, the cash is handled by their servers, so no one needs to work the registers. They don't need to spend a lot of time straightening shelves, sweeping or other maintenance activities. Plus, they can gain by economy of scale and automate a lot of things.
Third, they probably save a ton in insurance compared to regular stores. Since customers don't walk through the doors, they don't have to carry billions in insurance to cover potential claims from someone who hurt themselves trying to take bricks off a shelf that's marked "Ask For Assistance Retrieving Items On This Shelf".
I'm sure there are many other reasons Amazon can have lower prices, even after factoring in free shipping, but these are what I came up with off the top of my head.
Reading code is like reading the dictionary - you have to read half of it before you can go back and understand it.
Have you tried to buy hdmi / dvi cable lately (and by lately I mean this was about 1.5yr ago)?
Local store price for 6' section: $35-45
Online vendor price for 6' section: Bout 7 bucks.
And now I pretty much buy everything online. It's so much better and comparing prices doesn't burn up my time or gas.
... still waiting for this free-as-in-beer free beer I keep hearing about.
Bloody colonials.
Be nice to us, or we'll start our own language standard. We'll start switching "s" around with "z" and pretty soon you'll have to start calling our version "American English".
By the way, the same thing seems to be happening on your side of the pond.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
If your job is secure, an economic downturn is the time to look for deals. If you buy at maximum bubble, you're almost certainly paying too much.
For instance, I ride a Harley. (I actually ride mine, I don't just keep it under wraps in the garage and occasionally pose with it.) During the dot com bubble, Harleys were going for thousands over MSRP because there was a lot of new disposable income and it was considered by some to be a status symbol. When the dot coms detonated in 2001, there were suddenly a lot of nearly-new bikes on the market for thousands *less* than MSRP. If you were going to buy a bike, that would have been the time.
The same is pretty much true now. I'm told the local shops are crammed with 2008 models they can't move, and they aren't taking in any more on consignment. If you're in the market, why wait until prices go up?
I agree with you -- now is not the time to buy purchases you can't afford. Your first priority is to pay down debt and concentrate on the essentials. That said, we bought a widescreen TV in November. Why? Because our old one had crapped out and couldn't be fixed (we were victims of the Sony Grand Wega fiasco) and we lucked into a deal that got us a replacement at 1/4 retail (about 1/3 street) that would not be repeated. So we gritted our teeth, ate soup for a couple weeks, and paid cash. On the surface it may sound like mindless consumerism, but I saved more than $1K over what it would have cost me had I waited until the economy improved.
Look at it another way: Say the economy is going great guns, and you decide it's time to buy that Lexus. THEN the economy crashes. You're left with iffy job prospects AND a car you paid way to much for. That you can't sell.
Oliver's law of assumed responsibility: If you're seen fixing it, you will be blamed for breaking it.
Listen Chucky, I made that all up. I'll type real slow so you can understand: I... called... you.. Chucky... because... you... are... an... idiot.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
While there are advantages and disadvantages to each, it's not black-and-white. In my opinion, it is too simplistic to look to one metric as a "main" metric, but at least Amazon is upfront about it. They make an argument in their 2004 annual report, right at the front.
I have to admit, it's not a bad argument, and they did manage to survive the dot-bomb... mainly it seems that they would like to take the emphasis off of growth and look more at the long-term health and sustainability of the company.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.