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Wow those margins are shockingly thin. I guess the logistics of increasingly approaching 1 day shipping are no joke.

meritt 7y ago
> Wow those margins are shockingly thin That's by design. Amazon has found it's far more effective to deploy their excess capital toward company expenditures in the form of acquisitions, real estate, capex, employees, stock buybacks, etc rather than letting it get taxed as corporate operating income. Those dollars do ultimately get taxed, to be clear, but in the form of employment taxes, individual capital gains, individual income taxes, and property taxes.
- pavlov 7y ago
  Isn’t this an argument for raising the corporate income tax? It would motivate more companies to invest like Amazon.
  - tryptophan 7y ago
    No, because not every company can invest like Amazon. edit: Take for example McDonalds. What are they supposed to invest in? Its a mature business at this point, and over-investment in random things would just destroy shareholder value.
    - pavlov 7y ago
      Maybe those companies deserve to be beaten by new ones that know how to invest in growth?
- gordon_freeman 7y ago
  I always wonder why Apple does not utilize its revenue and profits the way Amazon does by funneling it towards CapEx and ever grow more ambitiously with its acquisitions and new products and services. I have seen Apple keep buying back its own stock and giving ever more dividends to its shareholders rather than investing in itself.
  - xxpor 7y ago
    I think it's just because they're out of ideas, or not confident in what they think up. I just get the sense they're not as willing to fail.
    - pmart123 7y ago
      I get the feeling that large acquisitions wouldn’t help Apple given its culture and emphasis on tight integration. Also, it’s R&D budget on an absolute level is pretty large.
  - toohotatopic 7y ago
    More growth ultimately will require another management layer. Maybe that's a risk not worth taking?
- kgwgk 7y ago
  Acquisitions and buybacks are done with after-tax money. (Capex as well, in fact, but depreciation reduces future profits and taxes.)
  - csdreamer7 7y ago
    Buybacks yes. Acquisitions depend on what is being acquired. Goodwill can be depreciated.
    - kgwgk 7y ago
      Goodwill is not amortized in GAAP accounting for public companies (it can be impaired, but that’s bad). But you’re right, I had forgotten that it may be amortized for tax purposes when it comes from a taxable asset sale (not for an stock-based acquisition).

> Wow those margins are shockingly thin That's by design. Amazon has found it's far more effective to deploy their excess capital toward company expenditures in the form of acquisitions, real estate, capex, employees, stock buybacks, etc rather than letting it get taxed as corporate operating income. Those dollars do ultimately get taxed, to be clear, but in the form of employment taxes, individual capital gains, individual income taxes, and property taxes.

pavlov 7y ago
Isn’t this an argument for raising the corporate income tax? It would motivate more companies to invest like Amazon.
- tryptophan 7y ago
  No, because not every company can invest like Amazon. edit: Take for example McDonalds. What are they supposed to invest in? Its a mature business at this point, and over-investment in random things would just destroy shareholder value.
  - pavlov 7y ago
    Maybe those companies deserve to be beaten by new ones that know how to invest in growth?
gordon_freeman 7y ago
I always wonder why Apple does not utilize its revenue and profits the way Amazon does by funneling it towards CapEx and ever grow more ambitiously with its acquisitions and new products and services. I have seen Apple keep buying back its own stock and giving ever more dividends to its shareholders rather than investing in itself.
- xxpor 7y ago
  I think it's just because they're out of ideas, or not confident in what they think up. I just get the sense they're not as willing to fail.
  - pmart123 7y ago
    I get the feeling that large acquisitions wouldn’t help Apple given its culture and emphasis on tight integration. Also, it’s R&D budget on an absolute level is pretty large.
- toohotatopic 7y ago
  More growth ultimately will require another management layer. Maybe that's a risk not worth taking?
kgwgk 7y ago
Acquisitions and buybacks are done with after-tax money. (Capex as well, in fact, but depreciation reduces future profits and taxes.)
- csdreamer7 7y ago
  Buybacks yes. Acquisitions depend on what is being acquired. Goodwill can be depreciated.
  - kgwgk 7y ago
    Goodwill is not amortized in GAAP accounting for public companies (it can be impaired, but that’s bad). But you’re right, I had forgotten that it may be amortized for tax purposes when it comes from a taxable asset sale (not for an stock-based acquisition).