6 ms·
How many $/seconds do you think the homepage being down costs?
by atlbeer 14y ago
How many $/seconds do you think the homepage being down costs?
- dangrossman 14y agoSince Amazon's retail operations are unprofitable, they're actually gaining money.
- dbaupp 14y agoIs this seriously true?? (If so, where do they make their money?)
- cjbprime 14y agohttp://kottke.org/13/01/amazon-is-a-charity-run-by-the-investment-community http://kottke.org/13/01/amazon-is-a-charity-run-by-the-inves...
- Deinos 14y agoVolume, volume, volume!
- wpietri 14y agoThey are optimizing for market share and innovation rather than profits. It's a world domination thing. I think it's awesome. Imagine if Google had run a bunch of low-rent punch-the-monkey display ads early on. It would have killed them. Facebook vs MySpace is another good example of what happens when you focus on long-term value creation versus short-term profit taking.
- al_james 14y agoDoes that mean its a big bate and switch model? Get market share with cheap prices, destroy the competition then ramp up your prices.
- jpadkins 14y agowhich has never worked in history. as soon as you raise prices, you lose market share...
- singleuse 14y agoWith its low profit margin amazon leaves virtually no room for a small size competitor to dislodge them from their share of the market. Say you want a bite of the tablet market dominated by apple, it's easy, make a somewhat decent tablet for cheap and there you have it. If you want a bite of an amazon dominated market, well good luck with that, and while at it hope that amazon is not planning to get into the market you're in. It seems their strategy relies on tiny margins, maybe with a different set or circumstances amazon would change their stance, but I don't think it's currently part of their plans to ramp up prices.
- robryan 14y agoIt depends on the product, a lot of cosmetics they seem to be selling at a decent margin and getting undercut by marketplace sellers. If you are going up against the loss leader kindle though it is going to be a lot harder.
- carolus4 14y agoFrom Amazon's perspective, it's the only way to exist in the long term. If they keep costs and margins low, they don't give their competitors much breathing room to challenge them on price.
- jfoster 14y agoMore likely the other way around. Destroy the competition and keep prices the same, but push costs down.
- ef4 14y agoIt's true that their profit margins can be vanishingly thin, but that doesn't mean they don't make money. For some classes of items, they can sell at cost and still make money, because their operations are allegedly so good that they can turn over the inventory before their own payment to the supplier is due. For example, say Amazon buys a book today and payment is due to the publisher in 30 days. They sell the book tomorrow at cost. Now they get to sit on the full price of the book for the rest of the month. In fact, take that money and buy another book, and sell it right away too. Keep that up, and you have a very big pool of money always sitting in your bank account. Money that can be profitably invested in other activities. Why would a publisher give them 30 days to pay? Because they're Amazon. It's good to be big.
- jeremyjh 14y agoNet 30 is very common, even if you are not Amazon.
- stcredzero 14y agoAnd lots of big companies will take 2X or 3X longer to pay you if they can get away with it.
- rogem002 14y agoThey are not unprofitable, they are just quite slim http://www.dailyfinance.com/2013/01/29/amazon-earnings-strong-sales-low-profits/ http://www.dailyfinance.com/2013/01/29/amazon-earnings-stron... (It's profit margin on a product is 0.5%).
- jonknee 14y agoWithout revenue coming in their fixed costs will assure they are losing money.
- deleted 14y ago[deleted]
- jere 14y agoGood one. Apparently, no one else is capable of laughing.
- 7rurl 14y agoZero, because people who want to buy from Amazon will just try again in a few minutes/hours when it is back up.
- akavi 14y agoIs there a name for the fallacy of ignoring marginal effects at the tail end of a probability distribution? I see it here incredibly frequently. There will almost certainly be some number of people who would have stopped by Amazon right now and made some impulse purchases. At the scale Amazon operates, the increase in inconvenience to push off the marginal purchase as a function of inconvenience is almost certainly miniscule (See frequent reports on how milliseconds of page load time affect the likelihood of purchase)
- kalid 14y agoExactly. People say they lose $X/hour. The next hour when they come up, is the order rate back to $X/hour, or $X + delayed demand / hour? (Surely there's some loss from being down, but it's not a simple loss = current order rate * downtime argument).
- Firehed 14y agoI'd be more concerned about the PPC ads leading to a 500 error.
- niggler 14y ago... or go to costco.com, which is a great site that oftentimes can beat amazon's price.
- Uhhrrr 14y agoNot completely zero - I can easily imagine how someone trying to buy a gift during a fifteen-minute break would go to barnesandnoble.com or whatever.
- druiid 14y ago
- up_and_up 14y agoI will take a stab. Using these numbers: http://www.statista.com/statistics/197099/quarterly-revenue-of-amazoncom/ http://www.statista.com/statistics/197099/quarterly-revenue-... 61.1 Billion dollars (yearly revenue) / 31556926 seconds = 1936.18 dollars/second
- laluser 14y agoThat's assuming that they're revenue is spread out evenly over every day and every minute. Which is not the case. Think Christmas, deals, weekends, time of the day, etc...
- dagw 14y agoIt also assumes that everybody who goes to buy something from Amazon while its down end up buying somewhere else as opposed to simply waiting until later that day
- axusgrad 14y agoThat's less than I expected! Back at the height of their popularity, I remember hearing that AOL could lose a lot of money every second their servers weren't showing ads.
- chaz 14y ago> That's less than I expected! That's still a huge amount of money ... $7mm an hour?
- falcolas 14y agoBack when I worked for them (many years ago) I was told about $100,000 in lost orders per minute.
- potatolicious 14y agoIt's January, so not much is being lost here. We're looking at the slowest shopping season of the year. My unscientific estimate based on previous experience in retail would suggest sales are probably 1/50th peak Thanksgiving/Xmas volume. Still, downtime is money, even if it isn't a world-changing amount of it.
- hzay 14y agoI don't know, there's valentine's day around the corner and I was actually shopping on amazon today.
- matznerd 14y agoI just went to amazon to buy something I wanted overnight shipping on. It is down, so I am probably going to have to get it somewhere else. On a side note, the first thing I did was google, amazon down, and saw it was (http://www.isitdownrightnow.com/amazon.com.html http://www.isitdownrightnow.com/amazon.com.html) then I came here, and I am proud to say, this post was #1.
- smackfu 14y agoDepends on whether people buy by going to the home page and searching, or just searching on Google.