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Also a good point. Low margin doesn't have to mean unsuccessful. But it's taken 20 years for Amazon to get where it is. Uber's valuation seems pretty premature.
by vannevar 10y ago
Also a good point. Low margin doesn't have to mean unsuccessful. But it's taken 20 years for Amazon to get where it is. Uber's valuation seems pretty premature. Amazon lost money for years because it was building infrastructure. Uber is losing money because it is subsidizing its sales. Amazon may have been low margin, but I don't know that they ever took investor money and gave it directly to customers in the form of price subsidies.
- rcach001 10y agoGreat contrast – and you're not really saying that Uber is not building infrastructure but that one is happening faster than the other one: 1) Uber: a) subsidize sales b) build infrastructure 2) Amazon: a) build infrastructure, b) grow sales at a sustainable rate even if it takes 20 years. I think Zappos had the same business model. But we'll see.
- ghaff 10y agoZappos is an Amazon subsidiary even if it does operate quasi-independently (and quirkily from a management perspective). It looks a lot more like Amazon though with generally far less emphasis on building out infrastructure. Ultimately it's sort of a niche because of the nature of selling shoes online.
- andrewprock 10y agoZappos is now an Amazon subsidiary. It grew sustainably for a decade before Amazon acquired it.
- ghaff 10y agoYes. In many ways they grew more in the vein of many traditional mail order catalogs than Amazon.