posted on January 30, 2001 07:12:12 PM new
We've already heard the news, big layoffs, big loss. But I decided to take a look at the actual financials. Check them out for yourself at
Take a look at the balance sheet. Key item that I'm referring to is near the bottom. Total Shareholder Equity. It's negative. Amazon is insolvent, and that's not good. Is it just me or is Amazon going belly up going to have a negative impact on Marketplace/zShops/Auctions on their site?
posted on January 31, 2001 06:11:17 AM new
It's time for them to 'do or die'. Their shareholders' equity went negative last June, they've never made a profit, and if they can't turn it around this year, they will go bankrupt.
posted on January 31, 2001 06:28:39 AM new
Financials are a huge problem at Amazon.
There are 2 alternatives: Drastic changes or being bought out. A third unlikely scenario is to fold.
Drastic changes will be tried first. They have laid off and closed warehouses/offices.
Amazon will now analyze profit centers at the company. Any function not showing an accepted target in growth/profitability will be axed, with an emphisis on profit.
Buy out: Wal-Mart would be a likely buyer, as well as several other B&M retailers. Wal-Mart's discount wholesale supply model is exactly what Amazon needs to cut costs.
I am still baffled how an internet retailer as large as Amazon which does not have B&M cost structures such as real estate, moving and handling unsold inventory to stores country wide, redundant point of sale costs, etc., can not show a profit, and offers little or no discount over B&M retail in pricing.
Internet retailers have a huge advantage in cutting costs as compared to B&M retailing, yet the consumer has seen little of these savings in price discounts. Did anyone at Amazon ask themselves why would anyone purchase at Amazon when the price is the same at a B&M or cheaper when shipping is added ? Convenience will not win the day in the long run.
I haven't bought anything at Amazon in nearly a year - everything is cheaper locally.
I can not see a company with billions in gross sales just folding though.
posted on January 31, 2001 08:09:55 AM new
THe way Amazon treated their auction part of their business is the way I could see them going under! They took a very successful auction site which could have come close to ebay's success or even better and screwed the sellers! Wouldn't listen to successful sellers and finally their last move, booted out their international (Canadian sellers)from their site. They could have done a form of Billpoint for all their sellers , could have auctions finishing order, could have an auction tab and at the very least could have made money off their auctions with very little effort. I think they took on too much ( all those store fronts) without any research or planning. I am not a business person, just a person with a lot of books , who loves books and loves auctions, and I had a more successful year than amazon! Well , I am leaving that site and returning to ebay~ where I make money which means ebay makes money! Suz23 only here!
posted on January 31, 2001 08:16:33 AM new
JMHO - part of Amazon's revamping strategy will be to encourage and expand fixed price selling for small sellers through Marketplace type listings (yes this has been done at the expense of the auctions model in my opinion).
to me this is a positive survival strategy, and as I just posted in the other thread:
"I just read through a report summarizing all the financial information they (Amazon) released yesterday with the quarterly earnings.
IMHO there is no need to panic.
Amazon has sufficient capital on hand to last through approximately the next year, so could survive another year even if they never raise another penny of capital. I would not anticipate their closure under those circumstances seeing as they can last until the next Christmas season which they anticipate will be profitable.
Marketplace is very profitable for them, cutting back on their distribution centers is a good idea for improving profitability and could help us small sellers who stock and sell the goods for Amazon
Belt tightening can be good in the long term for Amazon. If they didn't tighten their belt I would worry more about that. "
Also I personally believe that it is wiser to spread my sales across several sites and never depend on just one site. It makes me too dependent on their sales strategy and customer base, instead of dependent on my own decisions. I use the old concept of not keeping all my eggs in one basket.
posted on February 4, 2001 08:04:55 PM new
Their book business is profitable, their other categories aren't profitable but are high growth fields (but low margins too) Do they get rid of the other categories to remain proftible and sacrifice growth? No, they cut back on the workforce, cut back on distribution centers to keep costs down. If they can't make their profit projections by fourth quater, there is potential for a buyout if the stock price drops lower. As much as they need growth, they need profits too, but giant corporations don't think that way so I'd expect them to keep the whole business intact and suffer because of it.
posted on February 4, 2001 09:35:32 PM new
Don't count on Market Place or auctions to be around much longer or any non-Amazon merchandise be around.
There is nothing that points to these venues as being profitable. Even though they may make a profit, these venues aren't even on the finanacial map at Amazon. Finanacially, they wouldn't even be missed on the balance sheet.
posted on February 6, 2001 09:57:46 PM new
The shame is that Amazon is a damn good site and could be a great competitor to ebay! It's just not working BUT was 2 years ago! Bring back the 10 cent auction !
posted on February 6, 2001 10:24:10 PM new
Empires you got it right. Between the featured listings, no auction tab, and I could even live with the listing cost increase, Amazon handed eBay a monopoly and a free hand to raise rates.
However, unless Amazon's main site prospers, the auction site and Market Palce are on very thin ice.
posted on February 7, 2001 06:14:11 AM new
Amazon does not have to turn a profit with Auctions, zShops, and Marketplace to make them all worthwhile. They all bring and maintain traffic to the site.
However, I think Amazon could make all those formats profitable or more profitable if they choose to do so.
posted on February 7, 2001 07:26:22 AM new
Never Fear! Bidbay is here! The wonderful, successful auction site Bidbay is going to make Amazon an offer to buy them. They have done so well with their own in padding numbers and falsifying their info, they want another one to fail with
