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Wow. How is that even possible? Growing by a third in one year at that scale is completely mind boggling to me.

by austenallred 9y ago

newobj 9y ago
International, and unclear if subsidiaries like WFM come into play in this?
- adventured 9y ago
  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%.
  - twoodfin 9y ago
    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!
    - kgwgk 9y ago
      There is only one month of Whole Foods in Amazon's quarterly results.
    - runako 9y ago
      WF has < 500 stores, slightly more than the number of Apple stores. People will travel further distances to buy an iPhone than perishables. 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.
- kgwgk 9y ago
  International was actually a drag (29% compared to North America 35% and AWS 42%) Edit: but I guess I should exclude Whole Foods and in that case North America growth is 28%.
gyrccc 9y ago
> Excluding Whole Foods Market and the $124 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 29% compared with third quarter 2016. Still a really impressive 29% without taking WF into account.
tyingq 9y ago
It's not far off from their old trajectory: https://ycharts.com/companies/AMZN/revenues https://ycharts.com/companies/AMZN/revenues The Whole Foods acquisition did add a billion, so that helps.
leggomylibro 9y ago
Anecdotally, I've started using Amazon FBA for things that I used to use eBay for. Say I want a 2.2" ILI9341-driven TFT screen. That's not exactly something that you need everyday, so I could go to AliExpress/Taobao and get N for $3 ea in ~3 weeks, or eBay to get one for $4-5 in a lottery of anywhere from 3 days to 2 months. But now, I can get one from Amazon for $10 tomorrow. It has prime shipping, which means you gotta figure they use the whole 'Fulfilled By Amazon' thing; I think that's like $3 a pop for small items. Heck, I was thinking of trying to make some money off of that kind of arbitrage, but it wouldn't be stable income since it's so dependent on a single 3rd-party company. Also, you'd literally be profiting off of China's sweatshop factories and lack of compunction around IP, which I feel sort of 'eh' about. At least using the things, you can argue there might be an end to justify the mildly shady means. And it's just as likely to work as one from those other sources. If I wanted ethically-sourced reliable hardware I'd pay like $40 to get one with fast shipping from Adafruit. I really appreciate all that they do, but I also can't afford to ignore price for every purchasing decision that I make - and I am definitely not alone there, so there's probably still a lot of benefit to being "the everything store."
- ryandrake 9y ago
  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.
  - sokoloff 9y ago
    Me too. I still buy a fair bit from Amazon, but a lot of my purchasing has moved to Ebay and Aliexpress. It used to be the case that Amazon was very rarely significantly undersold. Starting ~3 years ago, I started to find that Amazon was somewhat frequently undersold by enough that I was willing to wait for Ebay or Ali (or camelcamelcamel to email me an Amazon price drop). I think Amazon's current positioning is more profitable for them and makes me happy as an investor in AMZN, but as a consumer, it makes me Google shop more often than before.
outside1234 9y ago
They have no profit. Color me unimpressed.
- brad0 9y ago
  This is an unconvincing statement. Amazon is known for reinvesting all their revenue back into the company. That’s why their stock price was low for so long.
- muzani 9y ago
  Increasing expenses by reinvesting it is also a good way to lower taxes.
eliben 9y ago
Aren't very high sales for a store expected? They don't manufacture (most) stuff - they buy it for X, sell it for X+Y%, so better economy = more consumer spending = higher sales for stores. The real key for Amazon is how good their profit margins are on these sales.
- jdale27 9y ago
  Is the economy so much better than last year that everyone is buying 34% more stuff than they did last year?
  - jmknoll 9y ago
    I don't think its the economy being that much better; rather, we're seeing the fruits of mass adoption of e-commerce for everything. Especially in the HN crowd, its easy to forget that e-commerce is still <9% of global retail. And while that number won't go to 100%, its expected to double in the next four years. So given that number alone, we should expect a ~20% YoY increase in revenue from Amazon. 34% is still excellent, but makes a little bit more sense when you frame it in terms of overall sector growth.
- austenallred 9y ago
  They were a store last year, too.
psadri 9y ago
Only ~9% of commerce is online [1]. Amazon will continue to grow like crazy for a while. 1 -https://www.census.gov/retail/mrts/www/data/pdf/ec_current.pdf https://www.census.gov/retail/mrts/www/data/pdf/ec_current.p...
- deleted 9y ago
  [deleted]
whipoodle 9y ago
I agree it’s impressive. I’ve been using them as little as possible after a string of delivery mishaps and generally poor service. It’s kind of awful to use these days, in my opinion. But they’re obviously doing something right.
jldugger 9y ago
They did buy a whole grocery store, right?

Wow. How is that even possible? Growing by a third in one year at that scale is completely mind boggling to me.

newobj 9y ago

International, and unclear if subsidiaries like WFM come into play in this?

adventured 9y ago
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%.
- twoodfin 9y ago
  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!
  - kgwgk 9y ago
    There is only one month of Whole Foods in Amazon's quarterly results.
  - runako 9y ago
    WF has < 500 stores, slightly more than the number of Apple stores. People will travel further distances to buy an iPhone than perishables. 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.
kgwgk 9y ago
International was actually a drag (29% compared to North America 35% and AWS 42%) Edit: but I guess I should exclude Whole Foods and in that case North America growth is 28%.

gyrccc 9y ago

> Excluding Whole Foods Market and the $124 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 29% compared with third quarter 2016. Still a really impressive 29% without taking WF into account.

tyingq 9y ago

It's not far off from their old trajectory: https://ycharts.com/companies/AMZN/revenues https://ycharts.com/companies/AMZN/revenues The Whole Foods acquisition did add a billion, so that helps.

leggomylibro 9y ago

Anecdotally, I've started using Amazon FBA for things that I used to use eBay for. Say I want a 2.2" ILI9341-driven TFT screen. That's not exactly something that you need everyday, so I could go to AliExpress/Taobao and get N for $3 ea in ~3 weeks, or eBay to get one for $4-5 in a lottery of anywhere from 3 days to 2 months. But now, I can get one from Amazon for $10 tomorrow. It has prime shipping, which means you gotta figure they use the whole 'Fulfilled By Amazon' thing; I think that's like $3 a pop for small items. Heck, I was thinking of trying to make some money off of that kind of arbitrage, but it wouldn't be stable income since it's so dependent on a single 3rd-party company. Also, you'd literally be profiting off of China's sweatshop factories and lack of compunction around IP, which I feel sort of 'eh' about. At least using the things, you can argue there might be an end to justify the mildly shady means. And it's just as likely to work as one from those other sources. If I wanted ethically-sourced reliable hardware I'd pay like $40 to get one with fast shipping from Adafruit. I really appreciate all that they do, but I also can't afford to ignore price for every purchasing decision that I make - and I am definitely not alone there, so there's probably still a lot of benefit to being "the everything store."

ryandrake 9y ago
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.
- sokoloff 9y ago
  Me too. I still buy a fair bit from Amazon, but a lot of my purchasing has moved to Ebay and Aliexpress. It used to be the case that Amazon was very rarely significantly undersold. Starting ~3 years ago, I started to find that Amazon was somewhat frequently undersold by enough that I was willing to wait for Ebay or Ali (or camelcamelcamel to email me an Amazon price drop). I think Amazon's current positioning is more profitable for them and makes me happy as an investor in AMZN, but as a consumer, it makes me Google shop more often than before.

outside1234 9y ago

They have no profit. Color me unimpressed.

brad0 9y ago
This is an unconvincing statement. Amazon is known for reinvesting all their revenue back into the company. That’s why their stock price was low for so long.
muzani 9y ago
Increasing expenses by reinvesting it is also a good way to lower taxes.

eliben 9y ago

Aren't very high sales for a store expected? They don't manufacture (most) stuff - they buy it for X, sell it for X+Y%, so better economy = more consumer spending = higher sales for stores. The real key for Amazon is how good their profit margins are on these sales.

jdale27 9y ago
Is the economy so much better than last year that everyone is buying 34% more stuff than they did last year?
- jmknoll 9y ago
  I don't think its the economy being that much better; rather, we're seeing the fruits of mass adoption of e-commerce for everything. Especially in the HN crowd, its easy to forget that e-commerce is still <9% of global retail. And while that number won't go to 100%, its expected to double in the next four years. So given that number alone, we should expect a ~20% YoY increase in revenue from Amazon. 34% is still excellent, but makes a little bit more sense when you frame it in terms of overall sector growth.
austenallred 9y ago
They were a store last year, too.

psadri 9y ago

Only ~9% of commerce is online [1]. Amazon will continue to grow like crazy for a while. 1 -https://www.census.gov/retail/mrts/www/data/pdf/ec_current.pdf https://www.census.gov/retail/mrts/www/data/pdf/ec_current.p...

deleted 9y ago
[deleted]

whipoodle 9y ago

I agree it’s impressive. I’ve been using them as little as possible after a string of delivery mishaps and generally poor service. It’s kind of awful to use these days, in my opinion. But they’re obviously doing something right.

jldugger 9y ago

They did buy a whole grocery store, right?