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Some businesses end up having the blessing of almost infinite expansion. Amazon ended up being one of them as it is in the commerce business. Also, Amazon has

Some businesses end up having the blessing of almost infinite expansion. Amazon ended up being one of them as it is in the commerce business. Also, Amazon has been able to increase its bottom line lately and will likely increase its rate of improvement moving forward.

ggm 3y ago
> Some businesses end up having the blessing of almost infinite expansion. Without getting all Erlich/Simons, this is bad economics. It's a logistical curve. it looks remarkably good until the inflection to asymptote happens. Market saturation happens. If you don't bring the undeveloped world with you there's no growth. If you do bring them with you then some goods sell for 2 dong in Vietnam and $20 in the USA. No cost reduction or rate of improvement will get Amazon above longterm ROI trends forever. I agree it's been a remarkable run.
- thiago_fm 3y ago
  Amazon has built it's empire on 0% interest rates and have done little cost reductions so far. It has plenty of underused logistics space. Nobody actually knows it's real bottom-line numbers once more automation and better usage of resources happens. It might be bigger than any company Today, so ROI is kinda unknown so far, they've invested in mainly growth opportunities so far. Also, Vietnam and other countries in development can be really profitable and a vehicle for growth. Check how $MELI is literally Amazon for latin america, despite Amazon being there. There are still many growth opportunities for Amazon logistics, for example getting bigger into the B2B space etc.
  - hef19898 3y ago
    I'd like to see a source on some of your claims, especially the unused warehouse space bit.
    - thiago_fm 3y ago
      search on Google, couple of news about it The logistics space in general is on the "bust" part of the cycle. Many companies also going bankrupt. Every company overbuilt during COVID, as demand were up +100% The same happened within the shipping industry and container prices
      - hef19898 3y ago
        That is, while somewhat true, such an over-simplyfication that it is wrong again... And container rates have absolotely zero to do with any over capacities Amazon has in their fulfillment network.

ggm 3y ago

> Some businesses end up having the blessing of almost infinite expansion. Without getting all Erlich/Simons, this is bad economics. It's a logistical curve. it looks remarkably good until the inflection to asymptote happens. Market saturation happens. If you don't bring the undeveloped world with you there's no growth. If you do bring them with you then some goods sell for 2 dong in Vietnam and $20 in the USA. No cost reduction or rate of improvement will get Amazon above longterm ROI trends forever. I agree it's been a remarkable run.

thiago_fm 3y ago
Amazon has built it's empire on 0% interest rates and have done little cost reductions so far. It has plenty of underused logistics space. Nobody actually knows it's real bottom-line numbers once more automation and better usage of resources happens. It might be bigger than any company Today, so ROI is kinda unknown so far, they've invested in mainly growth opportunities so far. Also, Vietnam and other countries in development can be really profitable and a vehicle for growth. Check how $MELI is literally Amazon for latin america, despite Amazon being there. There are still many growth opportunities for Amazon logistics, for example getting bigger into the B2B space etc.
- hef19898 3y ago
  I'd like to see a source on some of your claims, especially the unused warehouse space bit.
  - thiago_fm 3y ago
    search on Google, couple of news about it The logistics space in general is on the "bust" part of the cycle. Many companies also going bankrupt. Every company overbuilt during COVID, as demand were up +100% The same happened within the shipping industry and container prices
    - hef19898 3y ago
      That is, while somewhat true, such an over-simplyfication that it is wrong again... And container rates have absolotely zero to do with any over capacities Amazon has in their fulfillment network.