Amazon is an inventory turnover business. This is the fundamental point that's usually not understood. I'll explain by analogy. Assume 2 businesses with the f

Amazon is an inventory turnover business. This is the fundamental point that's usually not understood. I'll explain by analogy. Assume 2 businesses with the following assumptions Store A: -sells jewelry -capital cost of store is $100K -inventory is $100K (1 turn per year) -annual revenue is $100K -net income margin is 5% -annual net income $5k Store B: -sells pens -capital cost of store is $100K -inventory is the same $100K (they sell a lot of pens) -annual revenue is $500K (5 turns per year) -net income margin is 2.5% -annual net income is $12.5K if you think Store B, the lower margin, higher turnover business, is the better investment, then you get the Amazon investment thesis.