3 ms·

Why aren't more companies like Amazon?

38 points by mcnabj 13y ago

josh2600 13y ago
Uhh try going to a VC to raise money with the Jeff Bezos story today: "We're going to lose money for five years and then operate at absurdly low margins for eternity". Look, Amazon may win in the long run, but asking why more companies aren't like amazon is like asking why every company isn't Apple. We can't all be outliers.
- DrinkWater 13y ago
  Or you could simply say: People who invest money are rarely committed to long-term strategies. And Amazons definition of long-term is very unique.
  - seunosewa 13y ago
    Investors don't have a problem with long term strategies. They have a problem with strategies that involve losing money consistently or making no profits for many years, in the hope that you can magically start making obscene profits sometime in the distant future. Most companies that practice this kind of long term strategy end up going bankrupt before the profits materialise, so it makes sense for investors to be wary of them. Warren Buffett is a long term investor, and even he would not touch Amazon's stock with a 10 foot pole.
    - DrinkWater 13y ago
      But Amazon is not "Most companies". Amazon has done a brilliant job so far, and has changed from a bookstore to a cloud-provider, mega store, content generator and ad network (and probably many things more); utilizing the medium "internet" in a way most companies can only dream of. In my opinion, like i said, Amazon has a very unique POV on long-term strategies and it collides with people (or stock markets) expectations on making a lot of money in a short time.
  - fragmede 13y ago
    Jeff Bezos, and by extension Amazon's definition of long-term is exceedingly long; 10,000 years kind of long. http://en.wikipedia.org/wiki/Clock_of_the_Long_Now http://en.wikipedia.org/wiki/Clock_of_the_Long_Now
luser001 13y ago
Answer: evolution. The ones who tried this don't exist any more. Amazon is an outlier. If another company did this, but it's stock price didn't keep rising, corporate "raiders" will replace the board and get money back as dividends. Sorry if my point isn't clear. I'm typing this in a hurry.
- varelse 13y ago
  I'm not sure that Amazon is an outlier, but rather that as you say, other companies fear they would get raided if they tried to reinvest all their profits (what most companies probably ought to do a lot more of IMO) instead of issuing them as dividends and/or taking the money off-shore. Given that Jeff Bezos cut his teeth at D.E. Shaw, I'll bet he went into this with his eyes wide open as opposed to the usual lucky and wet behind the ears ivy-league hipster willing to sign away 90+% of his/her idea's net worth from the get-go just to get a shot to pursue it. Jeff Bezos was the right guy in the right place at the right time. That doesn't mean Amazon can't be taken out, it just means that someone needs to enter the space with a background capable of competing with him rather than creating another pets.com.
AndrewDucker 13y ago
Because there's no money in it? Either you compete with them by lowering your prices to match (in which case you're almost making no profit, and probably a loss), or everyone ignores you and buys from Amazon.
- isaacb 13y ago
  The post doesn't mean why aren't there more ecommerce giants, but rather why don't more big companies aggressively reinvest their income into growth and to enter new markets rather than hoard cash just to satisfy stockholders.
csharpminor 13y ago
I get the concept of a two-minute read, but this article strikes me as lacking any substance whatsoever.
- omonra 13y ago
  There should be a name for articles whose body adds (virtually) nothing to the title itself. That is not to say that the title is not worthwhile - but you can save yourself the trouble of reading as long as you got the title :)
  - goldfeld 13y ago
    "Why aren't more companies like Amazon? EOM"
  - whateverfor 13y ago
    They are already tagged like that here on Hacker News thankfully: see the medium.com?
tptacek 13y ago
Amazon makes so little money relative to the size of their enterprise that Matt Yglesias has described them as a charity run by Wall Street.
- zdw 13y ago
  Relevant source article: http://www.slate.com/blogs/moneybox/2012/12/12/amazon_s_zero_profit_business_strategy_it_s_amazing_but_someday_we_may_all.html http://www.slate.com/blogs/moneybox/2012/12/12/amazon_s_zero...
- Glyptodon 13y ago
  If by 'charity' you mean the only efficient company on Wall Street. If things are properly efficient profit will be near 0. Large profits mean that competition has failed.
  - SamReidHughes 13y ago
    Your comment makes no sense. If their competition is pushing their profits to 0, then the competition's efficient too.
    - rayiner 13y ago
      What he probably means to say that the market is efficient (which the retail sector is). Margins are razor-thin in the retail business because competition pushes profits to zero.
  - akgoel 13y ago
    This sort of econ101 argument that MR=MC in a fully competitive market forgets that such a simple model also must allow for consumer surplus to equal supplier surplus, and that they must necessarily also be zero. In that case, all transactions have zero net benefit for all parties involved, and you might as well not have any transactions.
yoster 13y ago
That comment "Nobody is challenging Amazon in e-commerce. Nobody." is highly inaccurate. Every major company already does deal in e-commerce. Amazon may do it best, but it doesn't mean they are not being challenged. Many companies are doing pretty well in e-commerce. Their expansion into grocery home delivery has been snail paced at best. It is like raving about Google Fiber when it will not be available for most of the country for a very long time.
jtbigwoo 13y ago
There are more companies like Amazon, but they don't exist online. Amazon is Walmart, Costco, CVS, and Target. (You could also compare them to Home Depot, Meijer, Kroger, etc.) There are two traditional paths to success in business--high volume/low margin or low volume/high margin (Timex vs. Rolex). Walmart is the classic high volume/low margin company. They started as a five-and-dime. Over the years they used their growing market power to add more product lines until they became a one-stop shop for everything. Amazon has followed Walmart's playbook almost from the beginning. While other early competitors were passionate about books, Amazon was passionate about warehouses and operations. The same thing happened when Amazon moved into music, electronics, and everything else. They could operate faster and cheaper than the other guys. There are two reasons why there isn't another Amazon in the online world. First, geography meant that Walmart, Target, and Costco didn't directly compete in every place from the very start. They had time to develop and fortify an operational base and then expand. Companies like buy.com had to immediately challenge amazon in order to survive. Second, technology companies don't generally focus on the low margin/high volume path. Online companies are generally populated by folks from the tech industry who look to Microsoft and Apple as their models for operating a company.
omonra 13y ago
I was kind of hoping the article would provide the answer.
simonsarris 13y ago
Nobody is challenging Amazon because their Earnings Per Share are... -0.20. Negative 0.20. Investors lump AMZN with GOOG and the like but GOOG's EPS is 33.59. TGT? 4.26. Walmart is 5.07. No other company with a market cap (100+Bn) as large as AMZN is allowed to get away with that. The only one that comes close is Vodafone, with a tiny positive EPS (0.13). It's important to note that if any other company spent until their EPS was negative, investors would flip. Amazon is playing with razor thin margins while trying to scale up a platform to end all platoforms that we might someday use for everything without thinking about it. On that day/year/eon dollar bills might as well be printed with Jeff Bezos' face on them. Amazon won't be using UPS and Fedex trucks on that day. They'll be using Amazon trucks. You'll know that era when you see it, I think. If you're Walmart or Target its hard to justify it at this point, the stock could take a major dive from such a risk. They're at the "Ask-questions" phase, and the questions are always "What's the profit?" because these are publicly traded companies. Amazon has been playing it risky since the get-go. Bezos is in for a very long gamble, and that frustrates the hell out of some investors, but its lofty enough to still attract investment dollars while in the "build-first" stage. Hopefully they can pull it off for a few more years before the stock market shifts to "Ask-questions." So that's why. Amazon is doing something bold that would cause the mother of all stock dives in any other 100+Bn company. They get a free pass because Bezos is convincing and for Amazon its sort-of-always-been-this-way. Walmart/Target/Etc do not have either of those luxuries - the incredible (or believable) visionary and being a company that's still in burn (build) mode.
- snprbob86 13y ago
  This comment is spot on. However, my next question is: What can we do to make more companies be like Amazon? Not every business needs to operate on razor thin margins, but I'd love to see more big companies playing the long game and continuously innovating. Wall Street invests in returns, not innovation. What can be done to help reset that balance a bit?
  - ippisl 13y ago
    Maybe willing to invest small percentage of one's pension in companies that try this kind of innovations. For example investing in disruptive healthcare companies, with an understanding that it help you when you grow old. Maybe even tie this with some sort of voting power to us, and less to fund managers. And of course encourage changes towards long term investment, maybe using the tax code.
deleted 13y ago
[deleted]
joshdance 13y ago
Amazon is very good at ignoring shareholders. In their first shareholder letter they basically said, "This is going to be a long hard haul." - http://benhorowitz.files.wordpress.com/2010/05/amzn_shareholder-letter-20072.pdf http://benhorowitz.files.wordpress.com/2010/05/amzn_sharehol... - That kind of thinking is rare.
tixocloud 13y ago
Isn't GE doing it to something extent? They're so diversified and so far away from the light bulb business that they originated from. Also, universal banks have diversified product offerings. The article poorly assumes that every company has talent and capital to take on the risk of entering new markets all the time. It's easy to say "we should've done this and that" in hindsight of success but there are numerous failures of companies that tried to enter new markets and failed.
rbur0425 13y ago
Why would any company want to be like Amazon!? They steal and do not protect the sellers. You can file an A-Z claim on anything that didn't have signature required and get your money back. Call their support and they cannot help you in any way. They buy there products from 3rd party sellers at net-60 terms and then return the merchandise that didn't sell back to you at your expense. They steal money from 3rd party merchants, when a buyer makes a claim they take directly from the seller instead of investigating the issue. What company would still be in business if they did all of this?
rbur0425 13y ago
Why would any company want to be like Amazon!? They steal and do not protect the sellers. You can file an A-Z claim on anything that didn't have signature required and get your money back. Call their support and they cannot help you in any way. They buy there products from 3rd party sellers at net-60 terms and then return the merchandise that didn't sell back to you at your expense. They steal money from 3rd party merchants, when a buyer makes a claim they take directly from the seller instead of investigating the issue. What company would still be in business if they did all of this?
emn13 13y ago
Why is it apparently considered hip nowadays to style a few simple paragraphs in font-size 5000%? If you're non-blind this is useless at best, and if you zoom by default, it's unusably large. Annoying.
- Semaphor 13y ago
  Unless the article is very long, I prefer to read it like that.
jmduke 13y ago
The companies that remind me most of Amazon are General Electric and Honda. Amazon started with a single complex offering (centralized eCommerce) and from that they famously abstracted and platformized everything about their business: they decentralized their marketplace, they dogfooded their web services to the point that they were able to actually sell their web services, they relentlessly keep decoupling their core. Honda, and General Electric, too started out with pretty simple value propositions. Honda started by selling piston rings to Toyota, and from there started manufacturing car part after car part until they had enough to create the cars themselves. (And it turned out that when you can manufacture a car yourself from start to finish, you can manufacture a lot of other stuff with the same goods, from drills to radios). On the other end of the spectrum, General Electric expanded by maintaining otherwise orthogonal SBUs and becoming one of the first companies in the 20th century to really take advantage of cross-branding, figuring out that if a customer liked their lightbulb they'd be okay with using the same company to buy a handheld radio. (Incidentally, both GE and Honda also profited tremendously from WWII. I hope no tech company happens to profit tremendously from a WWIII, mainly because I hope there is no WWIII.)
- nostrademons 13y ago
  It actually reminds me a lot of Richard Branson's Virgin group. Started in the recording industry, then compulsively reinvested profits to get into airlines, hotels, cell phones, retail, spaceflight, and various other industries. And like Amazon, Virgin tends to hold investors by the balls, bleeding them dry to finance risky new ventures by the force of Branson's personality.
genuine-a 13y ago
Amazon needs to start focusing more on the international market. Mark Meeker's 2013 internet trends showed that while 8 out of the top 10 internet properites are owned by american companies, 81% of the internet traffic going to these sights is international (Slide 6 of Mary Meeker's Internet Trends: http://www.kpcb.com/insights/2013-internet-trends http://www.kpcb.com/insights/2013-internet-trends). Even though Amazon had been around since the 1990's, Alibab's gross merchandise volume surpassed in the 2011-2012 time frame(Slide 69 of Mary Meeker's Internet Trends: http://www.kpcb.com/insights/2013-internet-trends http://www.kpcb.com/insights/2013-internet-trends). The emerging markets such as China and India, as well as the Next 11 countries (Research paper by Jim O'Niel: http://www.goldmansachs.com/our-thinking/archive/archive-pdfs/brics-book/brics-chap-13.pdf http://www.goldmansachs.com/our-thinking/archive/archive-pdf...) is where Amazon needs to be focusing their efforts if they want to stay competitive in the next decade.
- tnuc 13y ago
  They just started in India. https://www.amazon.in/ https://www.amazon.in/
  - genuine-a 13y ago
    tnuc, they definitely did just start there, I remember the HN post yesterday which was covering it! It's going to be interesting to see how they change their buisness model to better fit the Indian and South-east asian culture.
mikecane 13y ago
J.C. Penney. Nuff said.
slg 13y ago
I don't buy the counter examples of Microsoft, Google, and Apple. All three of those have a history of entering new markets with large upfront expenses and turning them into successful businesses. What exactly is the difference between delivering groceries and creating the Xbox, Android, or the iPhone?
- wildwood 13y ago
  The main difference is the margin. IPhones sell, reportedly, at a 58% margin. The profit margin on Windows has, in the past, sometimes exceeded 90%. Amazon is retail. They make 12% margins in a good year. Which is one big reason why Amazon will put significant effort into a new market with a 25% margin, that the others would turn up their noses at.
reeses 13y ago
"They never enter a market they can’t compete in, and they keep entering new markets all the time." Auctions? Search?
notdrunkatall 13y ago
More companies aren't like Amazon because they want to make a profit. Amazon operates at cutthroat margins, as if it were still a startup sacrificing profitability to grab market share. Once most companies own a solid chunk of the market, their concern shifts from outcompeting everyone else on price to outcompeting everyone else in other areas and fattening their margins in the process. Amazon is the outlier because Bezos is still in charge, and he's playing the long, long game.
nostrademons 13y ago
Nobody has yet pointed out that the specific example cited in the article, online grocery delivery, is a reaction to Google entering one of their core businesses with same-day delivery? http://www.google.com/shopping/express/about/ http://www.google.com/shopping/express/about/ It seems to invalidate the premise that nobody is competing with Amazon.

38 points by mcnabj 13y ago

Uhh try going to a VC to raise money with the Jeff Bezos story today: "We're going to lose money for five years and then operate at absurdly low margins for eternity". Look, Amazon may win in the long run, but asking why more companies aren't like amazon is like asking why every company isn't Apple. We can't all be outliers.

DrinkWater 13y ago
Or you could simply say: People who invest money are rarely committed to long-term strategies. And Amazons definition of long-term is very unique.
- seunosewa 13y ago
  Investors don't have a problem with long term strategies. They have a problem with strategies that involve losing money consistently or making no profits for many years, in the hope that you can magically start making obscene profits sometime in the distant future. Most companies that practice this kind of long term strategy end up going bankrupt before the profits materialise, so it makes sense for investors to be wary of them. Warren Buffett is a long term investor, and even he would not touch Amazon's stock with a 10 foot pole.
  - DrinkWater 13y ago
    But Amazon is not "Most companies". Amazon has done a brilliant job so far, and has changed from a bookstore to a cloud-provider, mega store, content generator and ad network (and probably many things more); utilizing the medium "internet" in a way most companies can only dream of. In my opinion, like i said, Amazon has a very unique POV on long-term strategies and it collides with people (or stock markets) expectations on making a lot of money in a short time.
- fragmede 13y ago
  Jeff Bezos, and by extension Amazon's definition of long-term is exceedingly long; 10,000 years kind of long. http://en.wikipedia.org/wiki/Clock_of_the_Long_Now http://en.wikipedia.org/wiki/Clock_of_the_Long_Now

luser001 13y ago

Answer: evolution. The ones who tried this don't exist any more. Amazon is an outlier. If another company did this, but it's stock price didn't keep rising, corporate "raiders" will replace the board and get money back as dividends. Sorry if my point isn't clear. I'm typing this in a hurry.

varelse 13y ago
I'm not sure that Amazon is an outlier, but rather that as you say, other companies fear they would get raided if they tried to reinvest all their profits (what most companies probably ought to do a lot more of IMO) instead of issuing them as dividends and/or taking the money off-shore. Given that Jeff Bezos cut his teeth at D.E. Shaw, I'll bet he went into this with his eyes wide open as opposed to the usual lucky and wet behind the ears ivy-league hipster willing to sign away 90+% of his/her idea's net worth from the get-go just to get a shot to pursue it. Jeff Bezos was the right guy in the right place at the right time. That doesn't mean Amazon can't be taken out, it just means that someone needs to enter the space with a background capable of competing with him rather than creating another pets.com.

AndrewDucker 13y ago

Because there's no money in it? Either you compete with them by lowering your prices to match (in which case you're almost making no profit, and probably a loss), or everyone ignores you and buys from Amazon.

isaacb 13y ago
The post doesn't mean why aren't there more ecommerce giants, but rather why don't more big companies aggressively reinvest their income into growth and to enter new markets rather than hoard cash just to satisfy stockholders.

csharpminor 13y ago

I get the concept of a two-minute read, but this article strikes me as lacking any substance whatsoever.

omonra 13y ago
There should be a name for articles whose body adds (virtually) nothing to the title itself. That is not to say that the title is not worthwhile - but you can save yourself the trouble of reading as long as you got the title :)
- goldfeld 13y ago
  "Why aren't more companies like Amazon? EOM"
- whateverfor 13y ago
  They are already tagged like that here on Hacker News thankfully: see the medium.com?

tptacek 13y ago

Amazon makes so little money relative to the size of their enterprise that Matt Yglesias has described them as a charity run by Wall Street.

zdw 13y ago
Relevant source article: http://www.slate.com/blogs/moneybox/2012/12/12/amazon_s_zero_profit_business_strategy_it_s_amazing_but_someday_we_may_all.html http://www.slate.com/blogs/moneybox/2012/12/12/amazon_s_zero...
Glyptodon 13y ago
If by 'charity' you mean the only efficient company on Wall Street. If things are properly efficient profit will be near 0. Large profits mean that competition has failed.
- SamReidHughes 13y ago
  Your comment makes no sense. If their competition is pushing their profits to 0, then the competition's efficient too.
  - rayiner 13y ago
    What he probably means to say that the market is efficient (which the retail sector is). Margins are razor-thin in the retail business because competition pushes profits to zero.
- akgoel 13y ago
  This sort of econ101 argument that MR=MC in a fully competitive market forgets that such a simple model also must allow for consumer surplus to equal supplier surplus, and that they must necessarily also be zero. In that case, all transactions have zero net benefit for all parties involved, and you might as well not have any transactions.

yoster 13y ago

That comment "Nobody is challenging Amazon in e-commerce. Nobody." is highly inaccurate. Every major company already does deal in e-commerce. Amazon may do it best, but it doesn't mean they are not being challenged. Many companies are doing pretty well in e-commerce. Their expansion into grocery home delivery has been snail paced at best. It is like raving about Google Fiber when it will not be available for most of the country for a very long time.

jtbigwoo 13y ago

There are more companies like Amazon, but they don't exist online. Amazon is Walmart, Costco, CVS, and Target. (You could also compare them to Home Depot, Meijer, Kroger, etc.) There are two traditional paths to success in business--high volume/low margin or low volume/high margin (Timex vs. Rolex). Walmart is the classic high volume/low margin company. They started as a five-and-dime. Over the years they used their growing market power to add more product lines until they became a one-stop shop for everything. Amazon has followed Walmart's playbook almost from the beginning. While other early competitors were passionate about books, Amazon was passionate about warehouses and operations. The same thing happened when Amazon moved into music, electronics, and everything else. They could operate faster and cheaper than the other guys. There are two reasons why there isn't another Amazon in the online world. First, geography meant that Walmart, Target, and Costco didn't directly compete in every place from the very start. They had time to develop and fortify an operational base and then expand. Companies like buy.com had to immediately challenge amazon in order to survive. Second, technology companies don't generally focus on the low margin/high volume path. Online companies are generally populated by folks from the tech industry who look to Microsoft and Apple as their models for operating a company.

omonra 13y ago

I was kind of hoping the article would provide the answer.

simonsarris 13y ago

Nobody is challenging Amazon because their Earnings Per Share are... -0.20. Negative 0.20. Investors lump AMZN with GOOG and the like but GOOG's EPS is 33.59. TGT? 4.26. Walmart is 5.07. No other company with a market cap (100+Bn) as large as AMZN is allowed to get away with that. The only one that comes close is Vodafone, with a tiny positive EPS (0.13). It's important to note that if any other company spent until their EPS was negative, investors would flip. Amazon is playing with razor thin margins while trying to scale up a platform to end all platoforms that we might someday use for everything without thinking about it. On that day/year/eon dollar bills might as well be printed with Jeff Bezos' face on them. Amazon won't be using UPS and Fedex trucks on that day. They'll be using Amazon trucks. You'll know that era when you see it, I think. If you're Walmart or Target its hard to justify it at this point, the stock could take a major dive from such a risk. They're at the "Ask-questions" phase, and the questions are always "What's the profit?" because these are publicly traded companies. Amazon has been playing it risky since the get-go. Bezos is in for a very long gamble, and that frustrates the hell out of some investors, but its lofty enough to still attract investment dollars while in the "build-first" stage. Hopefully they can pull it off for a few more years before the stock market shifts to "Ask-questions." So that's why. Amazon is doing something bold that would cause the mother of all stock dives in any other 100+Bn company. They get a free pass because Bezos is convincing and for Amazon its sort-of-always-been-this-way. Walmart/Target/Etc do not have either of those luxuries - the incredible (or believable) visionary and being a company that's still in burn (build) mode.

snprbob86 13y ago
This comment is spot on. However, my next question is: What can we do to make more companies be like Amazon? Not every business needs to operate on razor thin margins, but I'd love to see more big companies playing the long game and continuously innovating. Wall Street invests in returns, not innovation. What can be done to help reset that balance a bit?
- ippisl 13y ago
  Maybe willing to invest small percentage of one's pension in companies that try this kind of innovations. For example investing in disruptive healthcare companies, with an understanding that it help you when you grow old. Maybe even tie this with some sort of voting power to us, and less to fund managers. And of course encourage changes towards long term investment, maybe using the tax code.

deleted 13y ago

[deleted]

joshdance 13y ago

Amazon is very good at ignoring shareholders. In their first shareholder letter they basically said, "This is going to be a long hard haul." - http://benhorowitz.files.wordpress.com/2010/05/amzn_shareholder-letter-20072.pdf http://benhorowitz.files.wordpress.com/2010/05/amzn_sharehol... - That kind of thinking is rare.

tixocloud 13y ago

Isn't GE doing it to something extent? They're so diversified and so far away from the light bulb business that they originated from. Also, universal banks have diversified product offerings. The article poorly assumes that every company has talent and capital to take on the risk of entering new markets all the time. It's easy to say "we should've done this and that" in hindsight of success but there are numerous failures of companies that tried to enter new markets and failed.

rbur0425 13y ago

Why would any company want to be like Amazon!? They steal and do not protect the sellers. You can file an A-Z claim on anything that didn't have signature required and get your money back. Call their support and they cannot help you in any way. They buy there products from 3rd party sellers at net-60 terms and then return the merchandise that didn't sell back to you at your expense. They steal money from 3rd party merchants, when a buyer makes a claim they take directly from the seller instead of investigating the issue. What company would still be in business if they did all of this?

rbur0425 13y ago

emn13 13y ago

Why is it apparently considered hip nowadays to style a few simple paragraphs in font-size 5000%? If you're non-blind this is useless at best, and if you zoom by default, it's unusably large. Annoying.

Semaphor 13y ago
Unless the article is very long, I prefer to read it like that.

jmduke 13y ago

The companies that remind me most of Amazon are General Electric and Honda. Amazon started with a single complex offering (centralized eCommerce) and from that they famously abstracted and platformized everything about their business: they decentralized their marketplace, they dogfooded their web services to the point that they were able to actually sell their web services, they relentlessly keep decoupling their core. Honda, and General Electric, too started out with pretty simple value propositions. Honda started by selling piston rings to Toyota, and from there started manufacturing car part after car part until they had enough to create the cars themselves. (And it turned out that when you can manufacture a car yourself from start to finish, you can manufacture a lot of other stuff with the same goods, from drills to radios). On the other end of the spectrum, General Electric expanded by maintaining otherwise orthogonal SBUs and becoming one of the first companies in the 20th century to really take advantage of cross-branding, figuring out that if a customer liked their lightbulb they'd be okay with using the same company to buy a handheld radio. (Incidentally, both GE and Honda also profited tremendously from WWII. I hope no tech company happens to profit tremendously from a WWIII, mainly because I hope there is no WWIII.)

nostrademons 13y ago
It actually reminds me a lot of Richard Branson's Virgin group. Started in the recording industry, then compulsively reinvested profits to get into airlines, hotels, cell phones, retail, spaceflight, and various other industries. And like Amazon, Virgin tends to hold investors by the balls, bleeding them dry to finance risky new ventures by the force of Branson's personality.

genuine-a 13y ago

Amazon needs to start focusing more on the international market. Mark Meeker's 2013 internet trends showed that while 8 out of the top 10 internet properites are owned by american companies, 81% of the internet traffic going to these sights is international (Slide 6 of Mary Meeker's Internet Trends: http://www.kpcb.com/insights/2013-internet-trends http://www.kpcb.com/insights/2013-internet-trends). Even though Amazon had been around since the 1990's, Alibab's gross merchandise volume surpassed in the 2011-2012 time frame(Slide 69 of Mary Meeker's Internet Trends: http://www.kpcb.com/insights/2013-internet-trends http://www.kpcb.com/insights/2013-internet-trends). The emerging markets such as China and India, as well as the Next 11 countries (Research paper by Jim O'Niel: http://www.goldmansachs.com/our-thinking/archive/archive-pdfs/brics-book/brics-chap-13.pdf http://www.goldmansachs.com/our-thinking/archive/archive-pdf...) is where Amazon needs to be focusing their efforts if they want to stay competitive in the next decade.

tnuc 13y ago
They just started in India. https://www.amazon.in/ https://www.amazon.in/
- genuine-a 13y ago
  tnuc, they definitely did just start there, I remember the HN post yesterday which was covering it! It's going to be interesting to see how they change their buisness model to better fit the Indian and South-east asian culture.

mikecane 13y ago

J.C. Penney. Nuff said.

slg 13y ago

I don't buy the counter examples of Microsoft, Google, and Apple. All three of those have a history of entering new markets with large upfront expenses and turning them into successful businesses. What exactly is the difference between delivering groceries and creating the Xbox, Android, or the iPhone?

wildwood 13y ago
The main difference is the margin. IPhones sell, reportedly, at a 58% margin. The profit margin on Windows has, in the past, sometimes exceeded 90%. Amazon is retail. They make 12% margins in a good year. Which is one big reason why Amazon will put significant effort into a new market with a 25% margin, that the others would turn up their noses at.

reeses 13y ago

"They never enter a market they can’t compete in, and they keep entering new markets all the time." Auctions? Search?

notdrunkatall 13y ago

More companies aren't like Amazon because they want to make a profit. Amazon operates at cutthroat margins, as if it were still a startup sacrificing profitability to grab market share. Once most companies own a solid chunk of the market, their concern shifts from outcompeting everyone else on price to outcompeting everyone else in other areas and fattening their margins in the process. Amazon is the outlier because Bezos is still in charge, and he's playing the long, long game.

nostrademons 13y ago

Nobody has yet pointed out that the specific example cited in the article, online grocery delivery, is a reaction to Google entering one of their core businesses with same-day delivery? http://www.google.com/shopping/express/about/ http://www.google.com/shopping/express/about/ It seems to invalidate the premise that nobody is competing with Amazon.