Posted on 12/04/2014 7:06:08 AM PST by C19fan
I agree with you. But, it seems that many investors keep coming along to buy the stock. Which in turn supports the market price/value of the company.
Why would someone want to invest in Amazon...other then to see Bezos a billionaire? Where is the ROI?
So how does Amazon ever hope to be a profitable company long term? Do they take their cut of every sale, or exactly where is the profit? It sounds like they are just enabling people to sell products and act as a middleman moving cash back and forth.
I do check prices elsewhere and still come out ahead using Amazon prime every month for things that are hard to find locally.
Also, their new same day delivery? If they don’t get it there when they say, it’s free. Twice this has happened.
As a customer, not stockholder, I love Amazon.
And it hasn’t, at least according to the headline.
Sure.
Still, don’t get it.
I use to hear from companies, during the dawn of Internet, “It’s all about market share!”.
Sure enough, they were shortly out of business.
Every business I had was always about the ledger sheet.
“Am I improving Revenues?”
Followed by:
“Am I making margin?”
Just the oddest company and Tesla seems to be be following the Amazon model.
Can’t think of any other company that made it 7 years, before investors decided to dump it and get what they could, if not just stop the bleeding.
Between shipping increases and now charging sales tax (even on shipping), their prices are up over 10% from just 6 months ago.
When dealing with a faceless company on the net, it is all about the delivered price, nothing else.
It’s about the flow of money and the fact that a larger system grows slower over time.
Amazon is the number two retailer in the world with operations in dozens of countries and hundreds of warehouses stocked full of merchandise.
If they were to stop operations today, do you not think they would be sitting on billions of dollars of inventory and assets? Their investors know this. It isn’t a craps shoot, Amazon has real assets, not paper assets.
Their distribution system, their algorithms for personalized advertise within their own website, their dominance of the e-book market, their customer benefits, their website layout and flow, their ease of payment, their generous return policy, and their top rated customer service are all aspects that keep investors happy and interested.
Would you invest in a company that was showing a little profit for each of the last few quarters but didn’t have a clear vision of growth and expansion? Or would you rather invest in a company that grows and expands even through a tough recession and lays out a detailed roadmap of how they will continue to grow and expand for a decade out?
Investors are looking for something that will be around in a decade. For a company that is not only near the front of the pack, but innovates in ways that their competitors have to adjust to.
That’s why investors like Amazon. Because Amazon changed the way retailers work.
Would you rather have 10,000 shares of Sears stock in 10 years or 10,000 shares of Amazon stock in 10 years?
Which would be the better bet for your money?
Well, I hear you.
Eventually, at some point, any business, internet based or not, has to be able to turn a profit. They have to be selling a product, or producing a service, for which they can sell for more than their own costs of doing business. The difference is profit. Otherwise a company will eventually fail. And it will fail regardless of what is going on with trading in company stock.
I haven’t followed Facebook stock, but I remember how Facebook stock prices dropped way below the initial public offering price. I’ve wondered about Facebook, in that, Facebook does not produce a product or sell a product. There is no tangible asset to Facebook as I understand the term. But it does have a market value based on what willing buyers and willing sellers agree on as the market price of the stock.
The way Sears has been going, I think I would go with Amazon in a 10 year bet.
In fact, I might wonder if Sears stores will still be operating in 10 years.
Facebook is an advertising company.
That’s their revenue stream.
They certainly do if you're selling CDs.
Me too. Love it as a customer. Also a Prime member.
No, I hear you but, “The Bottom Line” and “Top Line” are typical objectives.
As you noted Internet Sales Tax is a problem for a lot potential buyers.
1. Internet Sales taxes
2. Sneaky delivery charges. This week, I ordered two pairs of Docker’s slacks and found out after ordering them, that one didn’t qualify for the free shipping after I placed the order. That pair of slacks negated the free shipping for the other pair of slacks and cost over $5 more than the same slacks in a different color.
3. Their house credit card formerly through GE was a complete b$tch to pay. You needed to be a old NSA hacker to discover not to use IE and use Google to access your acct. Then finding the mailing address to pay by your bank bill paying program was even more of a secret. Amazon just ignored hundreds of complaints every month, which drove people away.
4. Amazon’s programers/ITSOB’s apparently hate IE and using IE to shop and buy is a complete hassle at Amazon. Google Chrome is fast and much more reliable.
5. They sell a ton of electronic tablets, phones, computers and other gear. If you don’t buy directly from Amazon, apparently returning devices or trying to return them, often leave the customers on their own to deal with a hostile dealer, often out of state. Go to any product review, and check the bad review. Most of the bad reviews are from customers left out on their own. Amazon just leaves them out on their own. So in spite of good prices, I would not order any tablet, smart phone, computer ore electronic thing from them. One of my families is giving me an Android Tablet for Christmas. I told them to order it from Costco. If a computer or anything goes wrong with Costco, just take it to the nearest warehouse to return it or get a new one with zero hassle.
6. Apparently, a lot of household items on sale are often old discontinued models which come not from Amazon but smaller stores/suppliers. If something goes wrong see #5 above. If I want a good price on an outdated model, I would buy it on EBay with my PayPal acct.. If something is wrong with the product, PayPal refunds me or handles the problem.
Probably the number one reason for their drop in stock prices besides the above is one a lot of Freepers don’t understand, no dividends.
Companies that don’t give good dividends on a regular basis, are not considered to be good investments for a lot of retired people like me. No dividend, I will not invest in, and I’m not by myself. To many of us, a lack of dividends show a poorly run company using hype to build up stock value.
There is a low cost ETF that invests in tech companies with good dividends, TDIV. Check it to see how many Nasdaq hi tech companies are listed.
If you know what you want, and it isn’t electronic. You can probably save money @ Amazon, and avoid going to a brick and mortar store and finding out they don’t have what you want.
I bought a vacuum cleaner recently from Amazon. When it arrived, it was broken. I was charged over $40 to return it.
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I’m pretty sure that’s not true. You may have been charged by a third party seller, but Amazon direct does not charge for returns.
http://www.amazon.com/gp/help/customer/display.html?nodeId=15015721
Seller Return Policy
When you order from a third party seller, your return will be sent back to the seller instead of Amazon.com. While most sellers offer a returns policy equivalent to Amazon.com’s, some seller returns policies may vary. You can view each seller’s return policy in the Online Returns CenterOnline Returns Center (https://www.amazon.com/returns). Shipping and handling charges for returning items shipped by a seller are borne by the buyer. If the order is valued at $100 or more, insure the shipment for the value of the merchandise and ship your return with a signature shipping service. Items valued at over $75 must be returned to the seller with a trackable shipping service. For items below $75, we suggest USPS delivery confirmation service. If a package doesn’t arrive and you don’t use a trackable method to return or if you refuse the shipment as a method of return, we may not be able to cover you under the A-to-Z Guarantee.
Not much of a choice!
Personally, I would prefer to put my money into real estate.
I’m 20 miles from the nearest store. I can buy stuff on Amazon and have it delivered to my door for less than it is in the store - assuming I could find a store with what I wanted in stock. I’m happy. I wouldn’t invest in Amazon, but I like buying old books and other oddball stuff from them. I just got 200 double edge razors placed on my doorstep for $18 - take that, Gillette! Two years of shaving with fresh blades for $10/year.
Amazon is spending wildly on experiments, like drones. Bound to affect their bottom line. I wouldn’t count them out now, or any time.
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