Ex-Amazon employee Eugene Wei on Amazon's "profitless business model" fallacy, and why the claims that Amazon is not profitable are fundamentally wrong.
"If Amazon has so many businesses that do make a profit, then why is it still showing quarterly losses, and why has even free cash flow decreased in recent years? Because Amazon has boundless ambition. It wants to eat global retail. This is one area where the press and pundits accept Amazon's statements at face value. Given that giant mission, Amazon has decided to continue to invest to arm itself for a much larger scale of business. If it were purely a software business, its fixed cost investments for this journey would be lower, but the amount of capital required to grow a business that has to ship millions of packages to customers all over the world quickly is something only a handful of companies in the world could even afford." Wei also previously touched on this in Amazon, Apple, and the beauty of low margins.
As Amazon and the RIAA go head to head over the Amazon Cloud Player
(esentially Dropbox with streaming) it seems like a good time to recap the turbulent history of the humble MP3
, upender of the music industry business model.
10 out of 13 million tracks available for purchase online didn't sell a single copy.
Jut how Long can that Tail
be, after all?
Is the length of the tail mentioned in the article down to piracy or the state of the music industry as a whole? Is it possible to make a profit or break even on a niche website based on sales alone, and not on advertising revenue?
Fake profits are causing the stock market to descend. Could someone explain to me the meaningful difference between Enron and Amazon.com?
One company recently reported fake profits of $5 million, while having billions in debt. Enron, well...no profits either, and billions in debt. So why is Amazon.com considered "promising"? Enron had a revenue stream too.... Prediction: Amazon.com's stock will be "revalued" sharply lower as people get lucid about real profits and as the accounting/profit scandals spread.
Amazon's announces "free" shipping
I have been shopping on Amazon for over 3 years. When I buy books, music and DVDs, I buy on average $80 worth of entertainment. Today I received a order of 10 books. I used the "Wait until order is ready" service because I preordered Neil Gaiman's new book. The total for my books was $123.26 with shipping of $13.39 making
the grand total $136.65.
I was shopping Amazon tonight and saw their new free shipping notice. My first though was great! Then when I went to look for some books, I noticed the 20% off prices were no more. Now they are full price or 10%. I searched around and found the total for the books I just purchased using your new pricing. The grand total of my order would now
be $147.91 with free shipping. An increase of $11.26 or 8 percent.
I am a fan of Amazon but not a fan of their thinly veiled attempt to raise prices using the bait-and-switch approach taken from offline stores. Nothing is ever 'free.' I know Amazon wants to be profitable by Q4, but this pricing is too aggressive. The email for feedback is email@example.com. Voice your opinion about this offering. Is it warranted?
Amazon.com keeps adding to the black hole.
Looks like Amazon.com has taken a page from the Government's "running the country" book - they keep throwing money at a black hole instead of restructuring what they already have.