Amazon earnings fall 58%

[jinduy]

http://biz.yahoo.com/ap/060725/earns_amazon_com.html?.v=3

kinda surprised... i like amazon.

 

[djheater]

Originally posted by: jinduy
http://us.rd.yahoo.com/finance/finhome/topstories/apf/*http://biz.yahoo.com/ap/060725/earns_amazon_com.html?.v=3

kinda surprised... i like amazon.

Me too. I just bought a camera there. I'm ridiculously tired of having to ksip over 'deals' because they're not actually from Amazon but actually from a third party who charges $20 to ship though.

 

[neutralizer]

Wow that's a lot. I thought they were doing very well. Go there often for books and music.

 

[Slew Foot]

Says they were restructuring due to Amazon Prime, whatever that means.

 

[jinduy]

Originally posted by: Slew Foot
Says they were restructuring due to Amazon Prime, whatever that means.

seems to be a program that costs $79 a year... and you get unlimited 2 day shipping i think. could be costly if the customer is a large repeat buyer.

 

[Baked]

That 3rd party vendor thing is driving away business.

 

[Kelvrick]

Originally posted by: jinduy

Originally posted by: Slew Foot
Says they were restructuring due to Amazon Prime, whatever that means.

seems to be a program that costs $79 a year... and you get unlimited 2 day shipping i think. could be costly if the customer is a large repeat buyer.

Or just makes new accounts for the 3 month free trial.

 

[Ika]

Amazon also offers groceries now... not sure how well that works out.

 

[Slew Foot]

Yeah, they offered me a three month free trial of Prime. I ordered laundry detergent and other random things one at a time just because I could. Sorry

 

[SampSon]

I'm looking forward to a thread by Ameesh, looking for employment.

 

[RichardE]

Sales for the quarter were $2.14 billion, a 22 percent increase over the $1.75 billion a year earlier. The company said sales would have grown 23 percent if not for the negative effect of foreign exchange rates.

They are still doing awsome in sales

 

[dullard]

There is nothing surprising there. Amazon is one of those barely profitable large companies. Revenues are massive at $2.14 billion in the latest quarter. But costs are also massive. The profit only ends up at $22 million. Thus only 1% of its revenue is profit.

That scenerio leads to massive profit swings. Suppose we pretend costs were fixed for the quarter. If revenue was instead $2.16 billion, then they have only a small dip in profits. Or if revenue was instead $2.12 billion, they'd almost be losing money. Just a small 1% change in revenue can make or break Amazon's profit line.

There is nothing fundamentally wrong with Amazon. Its sales were up 22% from this time last year. This profit drop is just the nature of the massive sales at a razor thin profit business model.

 

[SarcasticDwarf]

Originally posted by: dullard
There is nothing surprising there. Amazon is one of those barely profitable large companies. Revenues are massive at $2.14 billion in the latest quarter. But costs are also massive. The profit only ends up at $22 million. Thus only 1% of its revenue is profit.

That scenerio leads to massive profit swings. Suppose we pretend costs were fixed for the quarter. If revenue was instead $2.16 billion, then they have only a small dip in profits. Or if revenue was instead $2.12 billion, they'd almost be losing money. Just a small 1% change in revenue can make or break Amazon's profit line.

There is nothing fundamentally wrong with Amazon. Its sales were up 22% from this time last year. This profit drop is just the nature of the massive sales at a razor thin profit business model.

This past quarter drastically changed some aspects of their affiliate program, reducing comissions for affiliates. This might be in an attempt to boost profit (affiliates to provide a significant amount of sales).



The vast majority of sales I see as an Amazon affiliate are sales from third parties selling through Amazon.

 

[jds2006]

I <3 amazon

 

[tfinch2]

Half the sh!t on Amazon doesn't have a price, then when you find something that does, it's from a 3rd party vendor.

 

[Xyclone]

Originally posted by: Baked
That 3rd party vendor thing is driving away business.

QFT

 

[jinduy]

Originally posted by: Xyclone

Originally posted by: Baked
That 3rd party vendor thing is driving away business.

QFT

i actually have benefited from this a bit...

i got me a nice pair of sennheiser headphones for cheaper than what amazon and all the other 3rd party vendors were offering at a nominal shipping fee... but i guess screening to find the cheapest deal is a hassle for most.

 

[MrWizzard]

What?s the big deal Amazon is still doing fine they are still making money.... right. Just not as much as they thought they would.

Although I really take advantage of the Amazon prime thing.... saves me hundreds of dollars. Hope they don't take it away.