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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.

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.
- smacktoward 13y ago
  Do we really want other companies to be like Amazon? If the Amazon endgame is "own the entire retail sector," I'm not sure that we ("we" meaning "society at large", not just "Amazon shareholders") want any company to be like Amazon... even Amazon. Not to mention that when the endgame is "own the entire retail sector," even if other companies want to be like Amazon, in the end they'd have to kill Amazon to do it. Owning the entire retail sector is incompatible with the existence of lots of thriving alternatives. It's like the Highlander -- there can be only one.
  - lhc- 13y ago
    And, don't forget the rather nasty consequences of Amazon's ability to operate on no margins: it kills all their competitors who have to actually profit to stay alive. When Amazon moves into your market, your company is probably in big trouble. Really, thats good in the very short term (lower prices for consumers), but bad in the long term (because once amazon controls everything, theres no reason to keep their margins so low).
- kmfrk 13y ago
  Taking advantage of a taxation system that hadn't been updated to tax online sales always helps. It always helps to compete on different terms than your competitors and incumbents.
- fady 13y ago
  i think we're forgetting the bad side of amazon. these few article were just brought to my attention recently, which has given me pause on where i shop, etc. i have not stopped using amazon, but i'm def more aware and hope they treat employees better. http://www.mcall.com/news/local/mc-allentown-amazon-complaints-20110917,0,7937001,full.story http://www.mcall.com/news/local/mc-allentown-amazon-complain... http://www.alternet.org/newsandviews/article/668688/is_amazon.com%27s_pennsylvania_warehouse_a_textbook_sweatshop http://www.alternet.org/newsandviews/article/668688/is_amazo... http://blog.seattlepi.com/trevorgriffey/2011/04/03/top-10-reasons-to-avoid-amazon-com/#.Uap2aqcVWss.email http://blog.seattlepi.com/trevorgriffey/2011/04/03/top-10-re... my gf is the one who has been telling me about amazon and their labor practices. she tells me about jeff not giving back to the community (she is from seattle), tax issues, labor issues. i'm not educated on the whole ordeeal but she has def sparked my interest. does anyone have any feedback? is amazon different from any other warehouse job? i used to work at UPS and a document storage company a while back and i don't remember it being terrible on either accounts.
dbg31415 13y ago
Well, to be fair, they have turned a profit far more often than not. They lost money in Q3 2013 (and in 2013 over all). But Q4 2013, and Q1 2014 have since been profitable for them. Also their expenditures seem to be paying off, as they had a 27.1% growth in revenue 2012 to 2013, and predict the same level in 2014. http://investing.businessweek.com/research/stocks/earnings/earnings.asp?ticker=AMZN http://investing.businessweek.com/research/stocks/earnings/e...
rkuykendall-com 13y ago
For Bezos, It's always day one. When I first heard that, it just blew my mind. I think that's the philosophy that keeps Amazon moving upwards. At so many points in Amazon's history you can imagine the story ending, but 5 years later it turns out to have been just the beginning, just the introduction. Successfully starting a bookstore wasn't the end, it was day1 for a music store. The music store wasn't the end, it was day1 for a retail store. Retail was day1 for digital downloads. Downloads were day1 for Kindle. Prime, AWS, India, Android, Same day delivery, groceries... When you tell yourself the story of your business, you probably start with the idea, go through the struggle, and end with your current success. Bezos puts all of that in the first paragraph, and then tries to imagine the rest of the book. "It's always day one."
- tixocloud 13y ago
  Just curious but has there ever been a day one where Amazon had to step backwards or some idea failed? It's hard to believe that everything Amazon touches is gold and I personally feel like we learn more from our failures than our successes. Just wondering if you know any Amazon failures from the past?
  - incision 13y ago
    Off the top of my head, their investment of $175M in LivingSocial [0] comes to mind. Also, though they're generally considered successes now, I recall no shortage of naysayers trying to claim the Kindle, Prime and AWS as failures. 0: http://techcrunch.com/2010/12/02/livingsocial-confirms-175-million-amazon-investment/ http://techcrunch.com/2010/12/02/livingsocial-confirms-175-m...
  - edgrimley 13y ago
    Auctions. They didn't destroy eBay as many thought they would.
  - JOnAgain 13y ago
    There's been a lot. Amazon generally avoids press, but they launch stuff that fails all the time. I'd say only 1/3 things they launch (or get really close to launching internally) is actually successful. Since they avoid press, people don't hear about things that fail. Their success rate has been higher with some AWS services, but if you could see their track record internally (basically things that make it to beta) vs. success 5 years later, it's probably under 30%.
Glyptodon 13y ago
You are pointing out that for the most part investors function as a collective with demands for industry 'normal profits' that essentially make the entire marketplace act as though shareholders are a single collective owner. Amazon just happens to be the only company which the investor collective allows to actually compete, something which otherwise doesn't happen unless a company is at risk of failing.
jonnycowboy 13y ago
When will Amazon buy Fedex or UPS or (gasp) USPS? http://www.forbes.com/sites/michaelkanellos/2012/03/26/will-amazon-become-the-next-fedex/ http://www.forbes.com/sites/michaelkanellos/2012/03/26/will-...

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.
smacktoward 13y ago
Do we really want other companies to be like Amazon? If the Amazon endgame is "own the entire retail sector," I'm not sure that we ("we" meaning "society at large", not just "Amazon shareholders") want any company to be like Amazon... even Amazon. Not to mention that when the endgame is "own the entire retail sector," even if other companies want to be like Amazon, in the end they'd have to kill Amazon to do it. Owning the entire retail sector is incompatible with the existence of lots of thriving alternatives. It's like the Highlander -- there can be only one.
- lhc- 13y ago
  And, don't forget the rather nasty consequences of Amazon's ability to operate on no margins: it kills all their competitors who have to actually profit to stay alive. When Amazon moves into your market, your company is probably in big trouble. Really, thats good in the very short term (lower prices for consumers), but bad in the long term (because once amazon controls everything, theres no reason to keep their margins so low).
kmfrk 13y ago
Taking advantage of a taxation system that hadn't been updated to tax online sales always helps. It always helps to compete on different terms than your competitors and incumbents.
fady 13y ago
i think we're forgetting the bad side of amazon. these few article were just brought to my attention recently, which has given me pause on where i shop, etc. i have not stopped using amazon, but i'm def more aware and hope they treat employees better. http://www.mcall.com/news/local/mc-allentown-amazon-complaints-20110917,0,7937001,full.story http://www.mcall.com/news/local/mc-allentown-amazon-complain... http://www.alternet.org/newsandviews/article/668688/is_amazon.com%27s_pennsylvania_warehouse_a_textbook_sweatshop http://www.alternet.org/newsandviews/article/668688/is_amazo... http://blog.seattlepi.com/trevorgriffey/2011/04/03/top-10-reasons-to-avoid-amazon-com/#.Uap2aqcVWss.email http://blog.seattlepi.com/trevorgriffey/2011/04/03/top-10-re... my gf is the one who has been telling me about amazon and their labor practices. she tells me about jeff not giving back to the community (she is from seattle), tax issues, labor issues. i'm not educated on the whole ordeeal but she has def sparked my interest. does anyone have any feedback? is amazon different from any other warehouse job? i used to work at UPS and a document storage company a while back and i don't remember it being terrible on either accounts.

dbg31415 13y ago

Well, to be fair, they have turned a profit far more often than not. They lost money in Q3 2013 (and in 2013 over all). But Q4 2013, and Q1 2014 have since been profitable for them. Also their expenditures seem to be paying off, as they had a 27.1% growth in revenue 2012 to 2013, and predict the same level in 2014. http://investing.businessweek.com/research/stocks/earnings/earnings.asp?ticker=AMZN http://investing.businessweek.com/research/stocks/earnings/e...

rkuykendall-com 13y ago

For Bezos, It's always day one. When I first heard that, it just blew my mind. I think that's the philosophy that keeps Amazon moving upwards. At so many points in Amazon's history you can imagine the story ending, but 5 years later it turns out to have been just the beginning, just the introduction. Successfully starting a bookstore wasn't the end, it was day1 for a music store. The music store wasn't the end, it was day1 for a retail store. Retail was day1 for digital downloads. Downloads were day1 for Kindle. Prime, AWS, India, Android, Same day delivery, groceries... When you tell yourself the story of your business, you probably start with the idea, go through the struggle, and end with your current success. Bezos puts all of that in the first paragraph, and then tries to imagine the rest of the book. "It's always day one."

tixocloud 13y ago
Just curious but has there ever been a day one where Amazon had to step backwards or some idea failed? It's hard to believe that everything Amazon touches is gold and I personally feel like we learn more from our failures than our successes. Just wondering if you know any Amazon failures from the past?
- incision 13y ago
  Off the top of my head, their investment of $175M in LivingSocial [0] comes to mind. Also, though they're generally considered successes now, I recall no shortage of naysayers trying to claim the Kindle, Prime and AWS as failures. 0: http://techcrunch.com/2010/12/02/livingsocial-confirms-175-million-amazon-investment/ http://techcrunch.com/2010/12/02/livingsocial-confirms-175-m...
- edgrimley 13y ago
  Auctions. They didn't destroy eBay as many thought they would.
- JOnAgain 13y ago
  There's been a lot. Amazon generally avoids press, but they launch stuff that fails all the time. I'd say only 1/3 things they launch (or get really close to launching internally) is actually successful. Since they avoid press, people don't hear about things that fail. Their success rate has been higher with some AWS services, but if you could see their track record internally (basically things that make it to beta) vs. success 5 years later, it's probably under 30%.

Glyptodon 13y ago

You are pointing out that for the most part investors function as a collective with demands for industry 'normal profits' that essentially make the entire marketplace act as though shareholders are a single collective owner. Amazon just happens to be the only company which the investor collective allows to actually compete, something which otherwise doesn't happen unless a company is at risk of failing.

jonnycowboy 13y ago

When will Amazon buy Fedex or UPS or (gasp) USPS? http://www.forbes.com/sites/michaelkanellos/2012/03/26/will-amazon-become-the-next-fedex/ http://www.forbes.com/sites/michaelkanellos/2012/03/26/will-...