In its quarterly earnings announcement yesterday, Seattle based Amazon.com, the largest US eCommerce company, admitted that it has missed bith revenue and profit estimates for Q3, 2014.
These disappointing third-quarter results see the online
retailer’s shares at 9 percent lower than the 7 to 18 percent revenue growth
that was originally forecasted. This loss has taken more than $15 billion off
of Amazon’s market value (now at $144.7 billion) and seen their stock plummet
13 percent since the poor Q2 results announced in July. Amazon is reporting
losses around $437 million resulting from failed product launches and various
acquisitions and expansions that take the ecommerce company further and further
away from their original charter and core competency.
Amazon continues to invest heavily in hardware devices, expanding it to include a phone and dropping the word "Kindle" from their Tablet line of products, simplifying it to just Fire. However, the hyped Amazon Fire Phone ha…
Amazon began as a “bookstore killer” when they offered
low-price books shipped straight to your door, but it wasn’t long before they
branched out to selling other products. In order to ensure they could offer the
biggest variety of products they developed the “Amazon Marketplace” to allow
small businesses to sell their products through the Amazon infrastructure. This
new feature was essentially the “eBay Killer” and gave small businesses
(selling as individuals on a per-item fee basis or as businesses for a monthly
fee) a way to expand their reach and have a trusted platform to connect them to
new customers. Amazon isn’t intending on stopping there though. In an
interesting move, they have now announced a card reader and app that will give
them a physical presence in storefronts with the “Amazon Local Register”.
Offering low introductory per-transaction rates, the Amazon
card reader competes directly with Square, Paypal, and all of the smaller card
reader and merchant register servic…
Less than an hour ago, Amazon prompted KDP authors (like me) to write an email to Hachette CEO, Michael Pietsch, supporting their point of view in their negotiation with Hachette.
It's interesting on how Amazon is finally realizing that it's bullying tactics towards traditional media corporations that are already facing financial challenges are no longer working, and given the enormous size of Amazon, the public now views Amazon with suspicion and as the bully.
While in its email Amazon makes some valid points about how lower cost will actually increase the size of the business by increasing volume, it fails to mention that lowering prices of popular, top-rated eBooks will also result in increased sales of the Kindle devices, eventually allowing it to sell those devices at profit rather than selling them as a cost. This is called vertical competition, consumers have a annual budget for books in their mind and if eBooks are lot cheaper than books, then the break even point for b…