6 ms·

Actually you could rather say that Amazon is reinvesting its profits to strengthen its position and reap the benefits in the future.

by mkuhn 14y ago

simonh 14y ago
How far into the future? They've been saying that for 17 years.
- muyuu 14y ago
  Except now they have profits and they had losses in the late 90s. They are still expanding to new countries. Last year, for instance, they opened amazon.es and amazon.com.br which are significant markets. I don't see what's the point in comparing revenue to profit ratios in wildly different sectors.
  - darrhiggs 14y ago
    Is amazon.es for latin america? AFAIK .es is España, and although it's ≈45MM, it's hardly a massive market WRT latin america.
    - danieldisu 14y ago
      significant != massive
    - lemma 14y ago
      No, it looks like it's targeted to Spain (which would make sense as far as logistics beacause they already have sites for France, Germany, Italy, and the UK).
    - muyuu 14y ago
      Latin America is not a single market for retail. Spain is the biggest single Spanish-speaking market for consumer products, although Mexico is growing fast.
  - simonh 14y ago
    >I don't see what's the point in comparing revenue to profit ratios in wildly different sectors. That's fair, I don't buy the comparisons of Amazon with Google, Microsoft, etc either. It's also true that P/E ration can be misleading, for example even a healthy company might book a loss, or small profit from time to time for all sorts of reasons. The problem with Amazon is that their current share price is around $250. For that to make sense, you need to believe that their earnings will rise so that this becomes a good deal. To achieve a P/E ratio of say 20 (still too high for a retailer), their earnings would need to go up about 150x. How are Amazon going to become hundreds of times more profitable than they are now?
arrrg 14y ago
So, their plan is to obliterate all other retailers (I guess online and otherwise) and then to jack up prices? From a normative perspective that honestly seems quite evil. I guess then I can be happy it hasn’t happened yet.
- yummyfajitas 14y ago
  So, their plan is to obliterate all other retailers (I guess online and otherwise) and then to jack up prices? Probably not. Historically, this has rarely worked. Once they jack up their prices, it isn't that hard for competitors to sprout up. Amazon will have to follow the walmart model - obliterate all other retailers and keep prices low forever.
  - ippisl 14y ago
    I think wall-mart , did,in some areas, jack up the prices after killing their main street competitors.
- 7952 14y ago
  The trend is actually towards becoming a platform through Amazon Marketplace. This may be bad for the market in general, but can hardly be considered obliteration.
deleted 14y ago
[deleted]

Actually you could rather say that Amazon is reinvesting its profits to strengthen its position and reap the benefits in the future.

by mkuhn 14y ago

Actually you could rather say that Amazon is reinvesting its profits to strengthen its position and reap the benefits in the future.

simonh 14y ago

How far into the future? They've been saying that for 17 years.

muyuu 14y ago
Except now they have profits and they had losses in the late 90s. They are still expanding to new countries. Last year, for instance, they opened amazon.es and amazon.com.br which are significant markets. I don't see what's the point in comparing revenue to profit ratios in wildly different sectors.
- darrhiggs 14y ago
  Is amazon.es for latin america? AFAIK .es is España, and although it's ≈45MM, it's hardly a massive market WRT latin america.
  - danieldisu 14y ago
    significant != massive
  - lemma 14y ago
    No, it looks like it's targeted to Spain (which would make sense as far as logistics beacause they already have sites for France, Germany, Italy, and the UK).
  - muyuu 14y ago
    Latin America is not a single market for retail. Spain is the biggest single Spanish-speaking market for consumer products, although Mexico is growing fast.
- simonh 14y ago
  >I don't see what's the point in comparing revenue to profit ratios in wildly different sectors. That's fair, I don't buy the comparisons of Amazon with Google, Microsoft, etc either. It's also true that P/E ration can be misleading, for example even a healthy company might book a loss, or small profit from time to time for all sorts of reasons. The problem with Amazon is that their current share price is around $250. For that to make sense, you need to believe that their earnings will rise so that this becomes a good deal. To achieve a P/E ratio of say 20 (still too high for a retailer), their earnings would need to go up about 150x. How are Amazon going to become hundreds of times more profitable than they are now?

arrrg 14y ago

So, their plan is to obliterate all other retailers (I guess online and otherwise) and then to jack up prices? From a normative perspective that honestly seems quite evil. I guess then I can be happy it hasn’t happened yet.

yummyfajitas 14y ago
So, their plan is to obliterate all other retailers (I guess online and otherwise) and then to jack up prices? Probably not. Historically, this has rarely worked. Once they jack up their prices, it isn't that hard for competitors to sprout up. Amazon will have to follow the walmart model - obliterate all other retailers and keep prices low forever.
- ippisl 14y ago
  I think wall-mart , did,in some areas, jack up the prices after killing their main street competitors.
7952 14y ago
The trend is actually towards becoming a platform through Amazon Marketplace. This may be bad for the market in general, but can hardly be considered obliteration.

deleted 14y ago

[deleted]