4 ms·
This is the modern version of 2010's "Amazon makes no money in retail"
by typs 2y ago
This is the modern version of 2010's "Amazon makes no money in retail"
- orwin 2y agoI see your overall point, i think it is the wrong comp. It compare more to SAP or Atlassian.
- eitally 2y agoI'm curious how you put OpenAI, SAP & Atlassian all in the same category. Do you mind explaining your thinking?
- orwin 2y agoIt's a comparison, not a same category. Leaders in their market, at first because of a small moat and large advance, then the advance shrink but the brand will stay first for at least a decade due to brand recognition. The Amazon comp works less, unless openAI start to suddenly build the sell their own chips.
- zoogeny 2y agoBut isn't it the case that the cash cow for Amazon is actually AWS? That is, without AWS would we consider Amazon to be the success we see it as today?
- machomaster 2y agoYes we would.
- stephenhuey 2y agoKeep in mind that while the store brings in a majority of revenue, it provides less than 20% of operating income. A majority of operating income comes from AWS (which provides less than 20% of revenue). https://www.fool.com/investing/2024/01/10/amazon-e-commerce-company-74-profit-this-instead/ https://www.fool.com/investing/2024/01/10/amazon-e-commerce-...
- machomaster 2y agoForget about AWS and simply compare Amazon with other offline/online/mixed stores. "In 2023, Amazon accounted for 37.6% of all e-commerce sales in America, which was light-years ahead of second-place Walmart at 6.3%." Amazon is highly successful even without AWS.
- deleted 2y ago[deleted]
- sofixa 2y agoAmazon weren't making money because they were expanding rapidly and had a lot of capex. OpenAI don't make money because they're losing money on inference. If you remove their capex - training costs, which you can't because they have to remain competitive, they'd still be losing money.