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A company can be spending more than they make, and still be profitable (a la Amazon) - hence the "plowing money back into the business" comment above. A company
by JasonCEC 13y ago
A company can be spending more than they make, and still be profitable (a la Amazon) - hence the "plowing money back into the business" comment above. A company in its growth stage believes there is significant profits to be made by spending on customer acquisition, and generally is making an informed decision not to pad the coffers and horde money (a la Apple).
- hisabness 13y agothis
- vvvv 13y ago>A company can be spending more than they make, and still be profitable What? Anyway, Amazon has razor-thin margins on some products but they're not loss making.
- JasonCEC 13y agoDiscretionary spending is different than fixed costs and contractual liabilities. I am saying that you should think of costumer acquisition as an upfront expense that leads to future profits - if the business is growing, and has reasonable margins. For example, Amazon has 'razor thin' margins and is operating at a slight loss. Does anyone really argue that they are not 'Profitable'?